What is Obsolescence Management and Why Do You Need it?

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For everything we buy and use, there is a life span attached. Everything  starts ageing, and, as time goes on, some components may no longer be available for purchase as replacements.

In this blog post, you’ll learn about what obsolescence management is and why you need it.

What is Obsolescence?

Obsolescence concerning electronic components happens when a Printed Circuit Board (PCB), or other electronic devices that contain components, pass the point of repair or replacement. This can potentially render the whole electronic device useless.

What is Obsolescence Management?

Obsolescence management is a set of activities done to mitigate the risks that are involved in a product’s lifecycle. These activities are done to manage the risks involved with electronic components becoming unavailable, which can affect the production or maintenance of the product or device.

It can also be referred to an account that contains all information about the life span of components with a plan to replace the obsolete parts of the product before it becomes a crisis and the challenges it takes also include diminishing materials, the use of counterfeits and getting the perfect component for a system.

An example of risk can be the halting or delaying mobile phone production due to the obsolescence of an important component on the board. If there is no planning for the continuous production of product parts, companies can risk losing millions of dollars if production stops or gets delayed.

And this is where obsolescence management comes in, it provides manufacturing companies with the correct information they need to analyze their products’ life span and maintain accurate data to support the strategies built around product sustainability.

What Causes Obsolescence?

Manufacturers of electronic parts are continuously tasked with creating and improving their components for production. Here are a few things that can make parts obsolete

  • Scarcity of raw materials
  • Regulations on the use of parts
  • Disruptions like natural disasters or pandemics
  • The expensive cost of components used in production
  • Time and technological advancement

The Need For Obsolescence Management

The standard rule of IEC (International Electrotechnical Commission) states that:

The objective of obsolescence management is to ensure that obsolescence is managed as a crucial part of all design, development, production and in-service help in order to minimise cost and damaging impact throughout the product life cycle.

Because of the continuous use of different types of electronics, there is a need  to help companies and manufacturers deal with obsolescence, this is why obsolescence management is important.

Why Do You Need Obsolescence Management for Your Electronic Components?

As earlier stated, having advanced knowledge of when a component will become obsolete is the main goal of obsolescence management, and it can save manufacturers a significant amount of money and time.

Equipment is built to have a long life which means electronic components used for the making should not get scarce or even totally obsolete before the end of production.

If this happens it will negatively impact the supply chain, manufacturers and even users.

Obsolescence management can help:

  • Engineers and designers explore alternative quality options
  • Manufacturers to secure inventory based on demand projections
  • Ensure equipment maintainers work on parts inventory which will lead to more efficiency
  • Make sure the regulations made by government officials are followed to minimize the impact of obsolete parts

How Obsolescence Impacts Production Cost

Production cost is one of the important things to be taken into consideration by manufacturers, although there could be cases of emergency decisions, customers and stakeholders may not be comfortable with the changes in the long run.

Some popular options for managing, in this case, include lifetime buy and last-time buy.

Lifetime Buy

This  is quite common in electronic components obsolescence management, it is referred to as the quantity of parts purchased for the remaining life of a product.

It also bears the added cost of procurement from sources for: 

  • Multiple parts
  • Cost of inventory like storage space for electronic parts
  • Disposal of parts if necessary

Last Time Buys (LTBs)

This is common also among several industries, it is the last order that must be placed with a component supplier within an agreed date when the production of a component is to be terminated.

Companies will need to ensure that they secure enough stock to last through production. It immobilizes working capital and requires accurate forecasts for components.

Obsolescence Management Best Practice

Component obsolescence now occurs at a rapid pace as technology keeps advancing and having the right obsolescence management tools and practices are ways to mitigate the cost that may come with a part becoming obsolete.

The obsolescence reports that will be given will help to establish more projections about production, provide obsolescence forecasts and help with system maintenance.

Here are practices that are good for managing parts obsolescence:

Parts Identification

Identify parts that are at risk of becoming obsolete and ensure that while they are used in production, they’re alternatives that can perform efficiently as the obsolete parts

Production History

Using production and order history for parts can help manufacturing companies decide if you go with purchasing a component or not

Customer Communication

Companies should keep communicating with customers to inform them of parts becoming obsolete and help them to ensure the life span of their products stays long

Planning Strategies

There should be strategies in place for the replacement of parts, and re-design to improve the functionality, cost and market trends concerning the components and technical feasibility

Requirements and Forecast

There are different requirements that companies must comply with while producing parts. Maintaining these requirements and forecasting the impact of obsolete parts in production should be well handled

Conclusion

Now that you know the importance of obsolescence management to be on the safer side you should take note of parts that are becoming obsolete and work with professionals in obsolescence support to ensure you get quality electronic parts.

You can also check our services to see how we can help you ensure your production isn’t delayed or deferred due to component problems

Emily Lawrence

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