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5 Ways to Address Component Obsolescence

Frustrated at the rate of obsolescence in today’s innovative world? Here are five ways to deal with it and come out ahead.

In a world where innovation is happening faster than we can adapt to it, electronics obsolescence can create monumental headaches for buyers. When key systems components become obsolete—as they are prone to do in this era of rapid technological advancement—companies using the items have to scramble to find replacements or rework their own product designs to accommodate the shifts.

An unexpected “end-of-life” (EOL) announcement from an original equipment manufacturer (OEM), for example, can send a manufacturer into a literal tailspin. This, in turn, puts pressure on electronics buyers who strive to ensure that the right parts are in the right place and at the right time. In fact, component obsolescence is considered a supply chain threat by roughly three-quarters of companies, according to a recent Electronic Design and Source Today survey (up 7% over 2017).   

“An electronic component becomes obsolete when it is no longer available from the original manufacturer to the original specification,” Microrel points out in Electronic Components Obsolescence Management. “This is why obsolescence management is now an essential part of the product support activities in sectors such as defense, aerospace, nuclear, and railway; where systems need to be supported for several decades.”

5 Ways to Ease the Pain

The good news is that there are ways to manage electronics obsolescence and to keep it from adversely impacting your company’s operations. Here are five strategies buyers can start using today:

  1. Understand the backstory behind obsolescence. If it sometimes just feels like the OEMs are out to get you, it may help to understand the primary factors that drive component obsolescence. The first is technological evolution, which can render older technologies less practical and competitive. According to Control Design, Moore’s Law predicts that the number of transistors, and thus processing power, within computer chips will double every two years, and this has been proven true every year since Intel was founded in 1968. “The exponential rate of technological growth creates technical obsolescence in the industrial sector at an increasing velocity, reducing many of the competitive lifecycles for components,” MRO Electric and Supply’s Will Jacobsen points out in How to reduce the risk of component obsolescence. “These increasingly shorter lifecycles mean that components are becoming obsolete faster than ever before.”
  2. Recognize that there’s no “one-size-fits-all” approach to this. A single obsolescence strategy only works if all the products being managed have identical technology needs, operating environments, in-service and support requirements, and contractual management demands, Microrel points out. “Therefore, once a company begins the process of defining an obsolescence strategy, it quickly becomes apparent that there is no simple, formulaic path to risk assessment.”
  3. Find a middleman who can source hard-to-find parts for you. Finding a reliable distributor who can source obsolete components can help to mitigate obsolescence risks. “Usually these distributors can offer like-for-like replacements and repairs for parts no longer carried or supported by the manufacturer,” Jacobsen writes. “Having an alternate supply chain and qualified independent distributor already in place to solve and avert disruptions is crucial to reducing much of the risk associated with obsolescence.”
  4. Keep parts information in a centralized, accessible place. We all know that organizational silos are counterproductive, yet too many departments still keep critical information “close to the vest.” When a part is obsolete or no longer recommended for new design, or when alternative options are available, that information should be stored in a unified library. “This drives alternate part selection during design or during production build process,” Altium points out in Obsolescence Management of Electronic Components Throughout Product Lifetime. “Each team member can see the information before using an obsolete, or not-recommended-for-new-design, part.”
  5. Leverage good demand forecasting. Getting out in front of possible obsolescence isn’t always easy, but with good forecasting buyers can determine their organization’s needs in advance and get a jump on situations where they might otherwise run into obsolescence-related challenges. Demand forecasting, for example, involves anticipating the demand for the product and services in the future and under a set of uncontrollable and competitive forces. It examines the amount of product your customers are likely to want during a specific amount of time. Having this information not only allows organizations to have the right volume in stock, but it also helps them plan in advance for potential component obsolescence.

An ongoing challenge for electronics buyers, obsolescence of components and equipment isn’t going away anytime soon. To minimize its impact, Jacobsen advises buyers to work to reduce the inherent risks produced by obsolete components, by realizing its causations, understanding the impacts, and constructing reliable solutions.

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