Categorization of Obsolescence Management

15 Jun 2012
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temple-of-categorizationReactive Obsolescence Management
Reactive obsolescence management is the method of acting upon the end of life of a component, after the EOL (End Of Life) notice is released. Reactive management is concerned with determining an appropriate and immediate solution to the problem of obsolete components. Reactive obsolescence management tries the following solutions to mitigate the risk of obsolescence:

  • Negotiating with the manufacturer
  • Usage of existing stock
  • Reclamation or cannibalization of parts
  • Finding alternate (fit, form and function) replacement from the same or a different manufacturer
  • Finding nearest equivalent substitute part, to reduce the redesign cost
  • Uprating a part over its originally specified limitations
  • Sourcing through aftermarket supply
  • Creating a custom component similar to the obsolete one and having a contract signed with a qualified manufacturer for a certain supply period
  • Redesign a sub-section or an entire product
  • Costly ‘last time buys’ (LTB) or ‘Die Banking’. Buying the components in bulk and store them in inventory for future needs

Proactive Obsolescence Management
Proactive management is implemented for critical components that have a high risk of going obsolete, lack sufficient available stock or will be problematic to manage if or when they become obsolete. Proactive mitigation may include partnering agreements with suppliers to ensure subcomponent longevity or considering obsolescence at the systems concept phase to mark key components for proactive management.

Benefits of using proactive obsolescence management:

  • Early warning of component discontinuance (End Of Life) allows maximum time to react and avoids to choose costly resolutions
  • Corrective action options at the component level can be taken while low cost opportunities still exist. It enables system availability to be maintained with the maximum cost avoidance
  • Evaluation of End Of Life notices and Part Change Notifications (PCNs)

Strategic Obsolescence Management
This is certainly a long term strategy which considers technology forecasting, logistic management inputs, long term business case development, design refresh planning and so on. For example, design refreshment plans determine the set of refreshes needed to maximize future cost avoidance. Nevertheless, most organizations are unable to foresee their own obsolescence cases and continue in the same way doing things ignoring that stagnation can be the major cause of failure.

Benefits of using strategic obsolescence management:

  • Obsolescence management is essential to anticipate and mitigate the risk of costly redesign cycles
  • Rapid assessment from where and how component obsolescence impacts the system supportability
  • Minimizing risk of obsolescence by identifying second sources and alternate parts in advance
  • Better guidelines on how systems are to be modified during design refreshes and obsolescence mitigation
  • Better management of stock, inventory and spares.

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Obsolescence Management Categories
[Bartels, Ermel, Sandborn and Pecht; “Strategies to the Prediction, Mitigation and Management of Product Obsolescence”]

 

Planning and implementing a reactive, proactive and strategic obsolescence management system to manage obsolescence is fundamental as it provides evidence for necessary financing and will help to specify future costs in this area.

Last modified on Wednesday, 04 July 2012 10:26
Bjoern Bartels

Bjoern Bartels is a senior consultant and obsolescence management competence lead at ABSC and Managing Director of AMSYS. He has a masters degree in international business and a German diploma in industrial engineering and business management. He has been working with comprehensive obsolescence management practices and methods for several years. He successfully developed, implemented and managed reactive, proactive and strategic obsolescence management systems within companies. In addition, he is the head author of the publication "Strategies to the Prediction, Mitigation and Management of Product Obsolescence", a joint work with the CALCE Engineering Institute of the University of Maryland. 

We create customized and innovative obsolescence management concepts and provides competent, reliable and sustainable optimization of processes, projects and infrastructure. We support businesses as long-term partner for the definition and implementation of customer specific complete obsolescence management solutions and round off their range of services with specific seminars and events.

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