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Overcoming the obsolescence challenge

26 Jun 2013  | Bob Chesla, Nora Gibbs, Lisa Cairns

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Part 1 tackled some of the design and related challenges faced by engineers when a Product Change Notice (PCN) is issued and components are flagged as a Last Time Buy (LTB) or have moved into an EOL stage.

There are cases when an end-product manufacturer does not receive the EOL PCN notice from the OCM, the LTB date has expired and new purchase orders cannot be accepted by the OCM. There can be many reasons why an EOL PCN was not received, such as not being on a distribution list from the OCM, or the OCM relying on a franchised distributor to manage the EOL PCNs. But in the end, when an EOL LTB date is missed, an ID is indispensable for obtaining components to keep production going and to meet the real business (cost and timing) and quality needs.

Sometimes even the best marketing forecasts and LTB managed purchases result in component sourcing problems and the resulting situation is as if you had not received a PCN. These events can occur not necessarily because of the part being scheduled for EOL or a faulty forecast. Unforeseen market events such as natural disasters or economic shifts can also result in unanticipated rises in demand for mature end-products. Suddenly, you are faced with higher component demands to support the product life cycle.

End product manufacturers need to be proactive with their suppliers to ensure they have risk management programs in place. Companies such as Rockwell Automation have Supplier Management Teams that perform risk assessments on their supply base to verify they have business continuity plans in place such as qualified back-up facilities, back-up plans, inventory management programs, and sub-supplier risk programs. These multi-variable risk assessments are performed regularly and provide the relevant departments, including engineering, with scores to alert of risk situations before a serious disruption occurs. Based on these risk assessments, long-term holding options may be assigned to buffer stock and avoid or reduce the impact of LTB and EOL events, allowing for continuous and seamless support for customers.

Granted it is impossible to successfully forecast for these dramatic and highly disruptive events, whether positive or negative in their origin. Yet these disruptions do occur, are relatively common, and must be managed. Again, at this point the solution may rest with turning to a leading, vetted, ID with deep and global expertise in navigating the commodity market to weed out counterfeit parts, which suddenly become prolific during crisis events, and to provide various inventory management and purchasing opportunities that offer both proper component matching and cost-savings.


BOM analyses inform component life cycles
One routine process that aids in managing component lifecycle stages is a Bill of Material (BOM) analysis, also known as a Scrub Process. A BOM analysis is a review of the components that go into making a product. These can be targeted or cover all components for a particular product.

Ideally, these reviews should be conducted for all new designs, redesigns, and be regularly conducted on released product currently in production to look for high-risk components. A high-risk component can be one that is entering a saturation or decline stage in its life cycle, had a LTB placed, is going EOL, is already obsolete, has poor quality or reliability, is a non-preferred technology, is from an at-risk supplier, has manufacturing issues, has environmental issues, is a non-preferred package, or has certification issues.

Once a BOM Analysis is performed, any high-risk parts or suppliers should be addressed to assure the ability to continue to build a quality product for the expected life of the product and to meet its repair cycle. At this point, it is possible to determine the risks and benefits for proceeding with an existing design or build and to determine how to prepare for when the inevitable PCN and/or LTB does arrive.

Proactive end-product manufacturers as well as IDs have proprietary tools to analyse the various risk indicators and then calculate a risk level or number for targeted and/or all components on a BOM that go into a product. In the event that your company does not have a BOM analysis tool available, some leading suppliers may have the ability to provide BOM analyses for in process designs, existing designs, or for end-products. However, these tools are not as common place as one might imagine due to complexity and proprietary issues.

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