Monitoring Data to Safeguard Against Obsolescence
Written by: Pablo Lagunilla
Obsolescence is a never-ending challenge in the industry, so managing and forecasting properly to meet demand is more vital than ever. When companies analyze and monitor the status of their critical components, the information can alert them when risk levels become too severe. However, the data is only as good as what is shared in the market.
Quite often I see last-time-buy notifications missed or never sent to an Original Equipment Manufacturer (OEM). Then, suddenly companies must take substantial measures, which can include a redesign or a large purchase. Therefore, a proactive risk analysis is essential in safeguarding companies against obsolete parts. In addition to analysis, the most effective technique in my experience is continuously sharing an update on all BOM items involved which could potentially go obsolete. By monitoring component lifecycles and checking daily components updates, your supply chain partners will be in close alignment between all key stakeholders, including EMS and ODM and can provide agility to any necessary changes in your strategy.
Even when diligently monitoring your parts and putting the best models in place, components can still immediately go obsolete with no stock available. Innovation and technology are booming, mergers and acquisitions are taking place, and new fab plants are only supporting the latest wafer technology—all resulting in the number of last-time-buys increasing. For example, there is a growing challenge between faster innovation cycles of semiconductor technology and long product lifetimes (and the need for spare parts within the lifetime). In addition to this, there is a challenge of the proliferation of electronics, paired with a higher demand, which competes with the slow growth of real production capacity. This causes the component manufacturers to focus their time and energy on more profitable components, in turn discontinuing older technology, and shifting to high-volume high-profit products.
As the market changes in these ways, no industry is safe from an immediate last-time-buy that will impact OEM products. Traditionally, the automotive industry has rarely dealt with obsolescence, while verticals like aerospace or medical have nearly always been challenged with obsolete parts that are vital to their end products. This is because both fields have such a high mix and low volume. Not only this but such products must be certified and registered with external bodies. Considering this, redesigns are much more expensive and time-consuming, and by choice are ideally avoided as much as possible.
Shifts like these create a need in the market for awareness of obsolescence, including closely monitoring market trends and your bill of materials (BOM) for component lifecycle management. To do this, customers are working together with Converge to monitor and stay aware of parts going obsolete regularly. Similarly, I am often seeing customers tap into our relationship with Arrow to work on a contractual basis with both Arrow and Converge to track obsolescence throughout the entire market. Working with Converge provides support for OEMs to provide a bridge-buy solution until a redesign is given, or to cover the gap in purchased stock when forecasts are not 100% reliable. Not only this, but customized storage and financing solutions are available.
As obsolescence continues to grow, it is more vital than ever to take every opportunity to learn how to address obsolete parts in your supply chain. Join our Future of Obsolescence Management (FOM) community today to sign up for upcoming events and webinars where you can hear real-world situations and share your knowledge with a community dealing with the same challenges and threats.
About the Author
Since joining Converge in October 2021, Pablo has ideated and applied a new obsolescence strategy, as well as an inventory management agreement, to provide the most high-quality supply chain services for customers globally. With over fifteen years in the electronics industry, he has extensive experience in a variety of verticals and has now joined Converge as Global Account Manager and Business Development Manager for the EMEA region.