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With the rapid pace of technological innovation, obsolescence is a risk for virtually all types of electronic components. Manufacturers must contend with the difficulties of sourcing these obsolete parts or updating their designs. Luckily, with obsolescence management planning, many of these difficulties can be avoided.
What Is Component Obsolescence?
Component obsolescence is when a component becomes difficult to source due to becoming outdated. Obsolete electronic components pose several challenges for manufacturers and consumers alike. Not only are obsolete components scarce and costly to replace, but they can result in unusable or substandard products. Obsolescence management is a method of proactively mitigating these risks. By developing plans before a component reaches the end of its lifecycle, manufacturers can prevent costly production stoppages.
The Drawbacks of Having Obsolete Electronic Components
Since obsolete electronic components are no longer manufactured, finding replacement parts is often a complicated, costly, and time-consuming process. Partnering with an obsolete component supplier is one possible solution, but modern electronics are designed with improved efficiency in mind. Continuing to use outdated parts can significantly reduce product performance and lifespan.
Installing outdated electronic parts into an assembly ultimately reduces product quality, reliability, and even profitability. Due to supply limitations, obsolete components are usually not only costly but also counterfeit. Replacement parts should be thoroughly checked and tested for safety before being implemented in manufacturing processes.
The Benefits of a Proper Obsolescence Management Plan
Creating an obsolescence management plan can prevent future challenges and keep production running smoothly. Benefits of such a plan include:
- Cost reduction: By proactively managing obsolescence, you can reduce the costs associated with inventory management, production, and shipping.
- Enhanced product quality: Identifying issues relating to obsolete components early on allows companies to improve product design before a problem occurs and reduce the risk of faulty products.
- Better customer satisfaction: Planning for obsolescence allows manufacturers to continuously produce quality products that meet customer expectations. Staying ahead of these challenges also makes your company more innovative and competitive.
- Strengthened supplier relationships: Working closely with suppliers to manage obsolescence helps to build stronger relationships, better communication, and more efficient supply chain management.
- Increased revenue: Discontinuing obsolete components and introducing new products ensures your company is always ahead of the curve. You can take advantage of new market opportunities and see greater profitability over time.
Ways to Mitigate Obsolescence Risk Going Forward
There are many simple strategies you can adopt to avoid the challenges of obsolete electronic components. By taking a few proactive steps, you can build greater resilience into your supply chain and safeguard your company’s future. Some key tactics include:
- Cataloging your electronic components: Begin by creating an inventory of the components you’re currently using, their deployment details, and any dependencies. This will make it easier to predict when a component is coming to the end of its lifespan and the effects that will cause.
- Analyzing the current state of each part: Determine the lifecycle stage of each component and note any security vulnerabilities associated with the aging technology.
- Performing an application criticality assessment: Since each electronic component holds a different value or risk for your business, it’s important to assess each part’s criticality to your business operations. Evaluate how important each component is to business continuity and compliance requirements.
- Evaluating the risk and impact of obsolescence: Each component that is near or at the end of its lifespan should be evaluated to determine the impact of its obsolescence on your business.
- Strategizing transformation for your high-risk assets: Create a modernization roadmap for high-risk components. Make plans to upgrade to newer versions or transition to an alternative part.
- Continuously monitoring the process: Establish a process for monitoring your components throughout their lifecycles to verify the effectiveness of your strategies.
- Collaborating across departments: Engage IT stakeholders, business units, compliance teams, and any other key area of your business to reach a united understanding of your business needs and technical requirements.
- Documenting your obsolescence management plan: Maintain detailed documentation of your risk management plan and communicate your strategies organization-wide.
- Using enterprise architecture tools: Consider implementing specialized tools to automate monitoring and risk assessment processes.
Quality Obsolescence Management Solutions by Pace Electronics
Obsolete electronic components can have far-reaching effects throughout your business. However, by implementing an obsolescence management plan, you can build greater reliability into your products and improve profitability. Partnering with an experienced contract manufacturer and electronic component sourcing expert is the perfect place to start. To begin minimizing your obsolescence risk, contact Pace Electronics today.
