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Is your process up to the obsolescence challenge?

24 May 2013  | Bob Chesla, Nora Gibbs, Lisa Cairns

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Having an alternate supply chain and a qualified go-to Independent Distributor (ID) already in place to handle and avert disruptions is critical should an EOL PCN be missed. Waiting until the crisis is at hand is already far too late as many supply chain disruptions are the result of natural disasters which, quite obviously, strike without any warning and can devastate entire companies or even market sectors.

One such example is the recent flooding in Thailand in 2011, which dramatically affected many component manufacturers and the entire HDD market. Thankfully, having a solid relationship with a fully-audited, long-standing ID can make the difference in what is an industry-wide major supply chain disaster.

Vetting an ID is an important step as appropriate departments need to have time to research, audit, and conduct on-site visits. There are excellent, professional IDs but there are also many companies to be wary of who might offer a quick and simple solution only to land counterfeit or substandard parts on your dock. (See below for more regarding anti-counterfeiting support from IDs during EOL stages.)

There are cases when a PCN is received very late in the process or the OCM does not allow enough time to react. Preferably, a minimum of one-year advance notice should be given from an OCM that a component is going EOL. This gives the engineering team time to develop and implement an exit strategy. An ID again is valuable in this case because a bridge buy can be performed to keep production going until an alternate solution can be implemented such as approving an alternate supplier, alternative component(s), or performing a redesign.

Alternately, often a LTB is placed with a supplier when they announce EOL. The LTB quantity is based on marketing forecasts for all the products the component is used in multiplied by the estimated years those products will be produced and be supported in the field and in repair. Business conditions can change and a LTB can run out much sooner than expected. This is where the ID plays an important role again because the OCM has obsoleted the part (could be many years passed) and the only option is to redesign or locate parts through an ID. Redesign may not be desirable due to costs, time, recertification issues, and/or limited duration within which the product will be offered in the future.

Working closely with an approved, alternate supplier, namely a qualified and certified ID, is important not only for your procurement department but for engineers as well. The reasons are rather simple in origin but have far-reaching and critical ramifications if engineers are not kept in the loop in component sourcing.

Because LTB and EOL parts are inherently more difficult to source, they are often also a targeted market for counterfeiting. As a result, it is all the more important that the engineering team be part of the sourcing solution to ensure that industry approved anti-counterfeit detection methods are employed, that rigorous functional screening be conducted and that results are reviewed prior to shipment from the ID.

Additionally, today's leading IDs can offer long-term stocking programs for either EOL parts or for those parts you want to ensure future stock availability due to potentially significant redesign issues in the event of an EOL. These programs ensure availability and pricing for components to meet production and warranty needs.

These are all part and parcel of today's global, leading, professional IDs. Ensuring that your procurement department understands that price may not be the final determiner in sourcing LTB or EOL components can obviously be a cost-savings and safety question that you can help to address.


About the authors
Robert (Bob) W. Chesla is a Senior Project Engineer and has been with Rockwell Automation for 39 years. He has earned a BEET degree, is a Certified PMP, a Certified ISO 9000 Quality Lead Assessor and a Certified Lean Six Sigma Green Belt. Bob's current Rockwell responsibilities include supplier and component approvals, technology roadmaps, life cycle management, strategic sourcing initiatives, lab failure analysis, project management and anti-counterfeit methods. He has been successful in leading teams in global project management across multiple continents. He has trained auditors and led audits to ISO-9000 requirements and has spent multiple years in Design Engineering, Quality, and Engineering Services.

Nora Gibbs is an experienced, long term, results oriented Account Executive working with the top customers of the largest independent distributor in the world. After an assignment in Singapore for two years, and visiting factories all over Asia, she has made it a goal to help combat counterfeit parts on a global level in any way she can. Now stationed in Silicon Valley, she is taking what she learned in Asia and applying to the daily workings of Smith & Associates.

Lisa Ann Cairns joined the Smith network of businesses in 2001 as a Technology Strategist and became the Chief Strategy Officer for a Smith subsidiary the following year. Since 2007, Lisa has been involved with strategic marketing projects for the Smith network and is the Senior Market Analyst & Senior Contributor for Smith's MarketWatch. Lisa received her Ph.D. (1998) and A.M. (1992) from The University of Chicago, during which time she was awarded a National Science Foundation Doctoral Dissertation Research Improvement Grant. She holds a B.A. from Hofstra University, 1988, where she was Hofstra's first woman undergraduate to receive a Fulbright Scholarship.

To download the PDF version of this article, click here.


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