Technological advancement is developing at such a high rate that components can quickly become obsolete. This can be an incredibly frustrating occurrence as, when a component becomes obsolete, OEMs have to work that much harder to source them, find replacements or even redesign their product to accommodate the new component.
In this article, we outline some tips that you can use for managing component obsolescence.
Have a second source for all components
Flexibility is a valuable trait in supply chain management and having different options for purchasing your components will be extremely beneficial if a component becomes obsolete. For this reason, you should have at least one alternative source for all the components you currently use, and for any new components you start using.
You should make sure you use suppliers who have trusted global connections and can obtain hard to source components. These suppliers may also be able to source near alternative components once a component can no longer be obtained.
Locate surplus stock
Some companies will hold excess stock of components to use in the event of shortages or simply to create a quick turnaround on orders. However, this comes with risk and storage costs, and the company may be willing to sell their stock in order to improve their cash flow in periods of low trade. If the product becomes obsolete and there is a readily available alternative, they may be forced to sell the components at a lower price.
When a product becomes obsolete, the manufacturer will usually warn buyers before production stops, and may offer a high-volume last time buy, but this comes with the risk of being stuck with obsolete stock once all orders have been filled.
Use industry-standard components
Another way to manage component obsolescence is to use industry-standard components where possible. Using niche or specialised components are more difficult to obtain and are also more likely to have a shorter production life. You can be much more confident that the components used in many products across the market will continue to be used and available.
Demand forecasting is the process of anticipating when there will be the highest demand for your products by using sales and market data so that you can purchase your components ahead of time and have them in stock for when you need them most. This is a useful practice to employ in order to deal with component shortages and obsolescence, as you will have all the stock you need well before the component reaches its end-of-life.
Use near alternatives
If a component you use in your design becomes obsolete, you can potentially find near alternative components that will perform the same function without much of a redesign. When you first begin using a component for a product, you should assess whether it can be substituted for another, rather than waiting for it to become obsolete and then panicking. If there are no near alternative options, a redesign of the product or PCB will be required.
Component obsolescence is often unexpected and can cause significant problems for manufacturers. Whilst certain niche components are more likely to become obsolete at a quicker rate, it is difficult to accurately predict when any component will stop being produced. Therefore, the prospect of obsolescence should be addressed at the beginning of any production and measures put in place to deal with it if and when it occurs.
Jeff Brind is the Chief Information Officer at Easby Electronics, a privately-owned supplier of electronic components with global market pricing, sourcing and supply.