Facing Component Obsolescence Management in a Dynamic Market

Facing Component Obsolescence Management in a Dynamic Market

Updated: Feb 12, 2019

The current electronic component shortage may be temporary, but many electronic component sourcing professionals find obsolescence management to be an ongoing issue within the supply chain.

Traditionally, electronic manufactured products within the highly reliable verticals; such as military, aerospace and medical, have had more focus on obsolescence management due to the product lifecycle lasting much longer. However, as component manufacturers pursue innovative designs with shorter life cycles more regularly, the obsolescence issue begins to impact virtually all segments of the electronics industry. According to a report from IHS Market, 15 end-of-life (EOL) and 38 product change notifications (PCN) are issued per day by component manufacturers. Additionally, changes in government regulations and the economy will also spike the EOL notices. In 2013, the number of EOL notice reached historical highs of 5,804 due to changes in REACH legislation in the European Union and in 2013 alone, over 350,000 components were obsoleted.

The merger and acquisition (M&A) in the component supplier-base since late 2015 has also contributed to the increase in component EOL. When 2 broad-line companies merge, there are usually many overlapping products. For involved companies, it makes sense to look at the product portfolio and begin by consolidating similar items. For instance, Celestica has already seen a 15% increases in the number of EOL notices from their suppliers in the past 18 months. the M&A deals are also impacting the product lifecycle. Modern technologies are being implemented as companies merge and products are being replaced faster than ever before, resulting in a drastic increase in obsolete products. In 1970, the lifecycle of a semiconductor was expected to be 30 years. Today, the semiconductor lifespan is only 10 years, a 60% reduction since 1970. A shorter lifecycle signifies products are being obsoleted at a faster pace. This may not be big news for consumer products, but for products with longer lifecycles; such as the automotive, industrial, medical, defense and aerospace, finding just one component for normal production could be a significant challenge.

In today’s dynamic market, mitigating obsolescence requires a proactive and comprehensive approach. Some solutions include:

  • Last time buys (LTB): Buying or storing enough parts to meet the system’s forecasted lifetime requirements until redesign is possible

  • Aftermarket sources: find a third party that continues to provide the electronic components after the manufacturer has obsoleted it

  • Finding alternate parts

With 40 years of experience and extensive data history in electronic components, Advanced MP Technology has assisted customers facing obsolescence issues with customized programs. Utilizing its highly trained staff and verified resources, Advanced MP Technology has the ability to quickly check BOMs and individual requirements to determine product lifecycle status arrange LTBs and suggest alternatives or replacements for obsolete parts.  Encompassing a proactive and comprehensive component obsolescence process is the key to managing product lifecycle requirements and EOL concerns.