Supply Chain Trends
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Keeping Up with EOL-Component Needs

Dealing with obsolete, end-of-life (EOL) components is a challenge that many designers and engineers will have to face at some point. Perhaps you might decide to use end-of-life components in a design from the outset to keep costs low and avoid the expense of incorporating more easily sourced franchise components. Or, maybe the production of the desired component might stop unexpectedly, right in the middle of the end-product’s lifecycle.

The pace of innovation means that many end-products are now facing ever-shortening lifecycles. At the same time, engineers are under increasing pressure to keep costs down, minimize the time it takes to “design-in” new components and, ultimately, get their products to market as quickly as possible. Using end-of-life components is becoming a much more attractive, and realistic, option.

However, sourcing EOL components is not without risk. If proper processes aren’t followed it can drive up costs and introduce the risk of counterfeits. Companies can mitigate the risk by using a sourcing partner who knows how to work in this environment. Engineers need to carefully consider how best to source end-of-life components and from whom.

Naturally, one of the most important traits to look for in a distribution partner is their open-market sourcing ability and experience in doing so. A key part of this offering should include an intensive testing program to ensure the authenticity of all parts entering the supply chain, along with guarantees of authenticity and component lifespan (where possible).

All this being said, in the long-term, the open-market sourcing model alone is not enough to meet the demands of today’s engineers. As soon as end-products begin to run beyond their expected lifecycle and/or designers decide to use franchise components to maintain their market share, the support they require from their distribution partner will change. A distributor that can offer diverse open-market capabilities alongside the reliability of franchise lines will be in a much better position to help designers make a seamless transition from end-of-life to franchise components.

From a financial perspective, there are some clear benefits for both the distributor and designer. Often, “tier one” distributors give the most attention to those customers that place the “high-volume, high-profit” orders, leaving new or smaller customers the challenge of gaining priority status— by no means an easy task.

As in any industry, loyalty pays, and generally designers will benefit from discounted prices and better treatment by sticking with one distributor. Beyond this, a good relationship could also result in introductions to a distributor’s own partner network where there may be opportunities for support with “designing-out” obsolete components and replacing them with new parts.

The speed at which end-products are now developed and superseded is intensifying the challenges that designers must overcome, and obsolescence of components remains one of designers’ top concerns. As a result, designers should find a distribution partner that can offer the support, adaptability, and expertise to help them keep afloat in this highly competitive marketplace. 

Brian Ellison is president of America II Electronics, an electronic components distributor that sells both franchised and open-market products to OEM and EMS customers around the world. 

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