Component obsolescence. Two words pack a mighty punch in the electronics industry. Electronics, like every marketable product, have a shelf life. While not as fast as say, dairy or vegetables at a supermarket, electronics right down to the individual components have a beginning, middle, and end.
The trouble always comes at the end.
Component obsolescence is, as referenced by SourceToday, a supply chain threat. This isn’t an inherent problem in certain sectors of industry. It is estimated that obsolescence issues total $750 million annually. Component obsolescence is an issue that persists across hundreds of business sectors. The why is simple. Most industries depend on electronic components nowadays.
For certain industries, healthcare and defense, certain products that need electronic components require long shelf lives. Normally, these products are supposed to operate for years, much longer than a normal electronic component’s lifespan. For certain industries such as healthcare, aerospace, and military, simply finding another electronic component to do the job of the now obsolete component, is not possible. These industries have stringent requirements that products must pass before going to market.
Obsolescence is Different for Every Industry
In healthcare, for example, every electronic component that is part of a product must go through rigorous testing by the FDA before being placed on the market. This makes substitution often too troublesome and costly to consider. Many medical devices are expected to have lifespans upwards of 20 years. A sharp contrast to consumer electronics, which barely last a fraction of a year in the face of decades.
Consumer electronics and smart appliances are only meant to last a few years if only months. The typical lifespan of consumer electronics is around 18 months. Most smartphones and computers last merely a year before a newer, sleeker model is released. When a component becomes obsolete substitution is a greater possibility in comparison to stricter sectors of business. Though it is often not done.
The catch with consumer electronics is the overwhelming market demand against a small supply of components. Consumer electronics are becoming a staple in most people’s lives and with market trends, will only continue to be. Redesigning parts might not take as much time or cost as healthcare, but it’s an added expense many try hard to avoid.
What does that mean? It means most sectors, from healthcare to consumer electronics, are fighting for the limited supply of the final production line sent to market. Consumer electronics have massive demands to meet, while healthcare needs enough components to last for the duration of a product’s lifespan.
Typically, a final massive purchase is what is done. While being a normal response to a component’s end-of-life final stage, it is still classified as a risk. A fact that was emphasized by the global semiconductor shortage. Market demands for consumer electronics skyrocketed. At the same time, the need for ventilators and other life-saving medical devices jumped. The shortage of components, which were still going into obsolescence, depleted faster than expected.
There will be more shortages, and the ravenous demand for chips only continues to grow. With these odds are substituting parts in rushed redesigns and massive purchases that, more often than not, must be stored in proper facilities off-site the only way to manage obsolescence?
No, they are not.
You Can’t Always Anticipate Crises, but You Can Be Proactive
The pandemic sparked a global shortage of items from coffee to semiconductors, the latter of which is still occurring. While semiconductor manufacturers have struggled to stabilize the global supply chain as fast as they can, many companies faced production stalls from the lack of components. Consumer electronics and automakers spent months vying for the same components that were made scarce by the shortage. Last-minute buys were impossible to make.
Companies in every sector have to be proactive and strategic the moment a product enters its design phase. What does this mean? Forecasting is analyzing when a part will be expected to enter obsolescence, what components are more at risk, and planning how to manage it.
Management doesn’t have to be preparing for a large last-time purchase either. One should categorize parts by importance, obsolescence, and, finally, redesigning around those parts. The difference between a planned future redesign and an unplanned one is immense. It means more time to create a functional, cost-effective product and put obsolescence at the forefront rather than the back burner.
Being strategic and proactive in the face of obsolescence also results in the creation of a planned system. Obsolescence usually involves approval through the management chain, one that can take a long time to garner complete approval. By forecasting and proactively managing obsolescence, an approval system can be put in place to remove time devoted to gathering management approval for redesigns or last-time buys.
This system is aided immensely with the help of a distributor skilled in obtaining end-of-life components.
Finding the Perfect Distributor to Manage Obsolescence
You can forecast, manage, and plan ahead, but having a distributor that doesn’t have the proper tools to combat component obsolescence can be the proverbial nail in your coffin. During shortages, especially the global semiconductor shortage, distributors were the ones making sure that many industries didn’t face massive production stalls.
Certain distributors, such as independent or authorized x independent distributors, are able to better manage obsolescence than solely authorized distributors. While independent distributors are great for helping businesses get their hands on hard-to-find components, authorized x independent distributors are able to be there every step of the way.
As an authorized x independent distributor, Area51 Electronics can work with a company to either help them store or manage last-time buy inventory during obsolescence with their authorized lines. Area51 Electronics can also help find obsolete components that are no longer available on the market through the company’s value-added solutions and inventory options.
At Area51 Electronics, our collaborative advantage with our partners, including original equipment manufacturers (OEMs) and suppliers, will make sure your needs get met. No matter the obstacles, whether shortage or obsolescence, we will get you through it.