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The Secret to a Successful Obsolescence Management Strategy

OEMs across the globe in nearly every imaginable industry, in some capacity, feel the impact of Obsolescence on their supply chain. The reasons for the discontinuation of critical electronic components are varied, but regardless of the many forms obsolescence takes, there remains one true constant: It is an issue that no amount of oversight or procedural methodology can ever fully control. Not even solutions such as long-term fulfillment contracts can eliminate the problem entirely, and as a result, obsolescence management strategies have evolved to not prevent obsolescence itself, but to prepare OEMs to adapt the moment the issue arises.

But while most OEMs today do have such a procedure in place, no two obsolescence management strategies are quite the same — and more often than not, they fail just as often as they succeed.

Why is this? How can strategies designed from the ground up to mitigate such a specific supply chain issue vary so drastically in their ability to work as intended?

The difference lies in a fundamental difference between two different types of obsolescence management strategies: proactive and reactive.

A reactive Obsolescence Management Strategy, as the name implies, allows an OEM to alter their approach to accumulating the critical components necessary to complete the life cycle of their products. This can include quickly finding alternative component suppliers, alternative components that can be seamlessly substituted in designs at the point of assembly, or, should a product change notification (PCN) be issued in sufficient time, negotiating a last time buy.

Each of these solutions come with various unknowns which have drastic consequences on their ability to succeed. PCNs, for example, are not released in accordance with any set industry standard. While most OCMs do try their best to inform their customers of their intentions to discontinue a component, statistics indicate mixed results at best to do so. In 2016, almost 50 percent of electronic components were transitioned into obsolescence without a PCN. Of the end-of-life components that were accompanied by a PCN, over 40 percent had an immediate last time buy date. Four percent of these were given a last time buy window of a year or more, and only five percent were given a nine to 12-month window. For many OEMs, 12 months is the minimum amount of time required to pivot their supply chain.

Instead of helplessly waiting for your OCM partner to notify you of impending obsolescence, a proactive obsolescence management strategy revolves around monitoring the component’s life cycle from the moment it is included in a bill of material until it is no longer needed. Implementing the proper infrastructure to monitor for obsolescence can often prove costly in more ways than one. Not only does the investment into the necessary Big Data from industry analysts represent a significant financial investment, but interpreting meaning from Big Data findings can be a time-consuming endeavor. Even worse, if the OEM’s conclusions prove inaccurate, the consequences could include overestimating inventory needs, which can result in additional warehousing and fulfillment costs.

It is these issues that EDX’s proactive BOM Monitoring Solution is designed to eliminate, thus making a proactive obsolescence management strategy not only widely available to the manufacturing industry, but cost-effective.

As a valued EDX Customer, our solution will:

1. Monitor Obsolescence

Through our Big Data platform Partstat, our intelligent automated systems review your Bill of Material every 15 minutes, scanning the global marketplace against over 9 billion rows of current and historical data to keep you in front of obsolescence however and whenever it occurs.

2. Predict Allocation

An electronic component does not have to be obsolete to cause a disruption in your supply chain. EDX offers the only solution on the market that features predictive algorithms that monitor for obsolescence and allocation, ensuring that your company will be prepared regardless of what may happen throughout your component’s life cycle.

3. Confirm Lifecycles

Despite the wealth of technology at our disposal, we have never devalued the human element that still plays a crucial role in any successful supply chain. At the click of a button, all the analysis, interpretation, and OCM communication required to confirm component life cycles is done for you in a personalized Life Cycle Report, written by one of EDX’s experienced BOM Specialists.

With so many features bundled into a single solution, we feel comfortable in saying that our BOM Monitoring Solution is the only bill of material monitoring service fully prepared to serve the needs of today’s unpredictable supply chain. Obsolescence can’t be prevented, but it can be overcome — and EDX is standing by to show you how.

This post first appeared on Xilinx EOL Notices, please read the originial post: here

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The Secret to a Successful Obsolescence Management Strategy


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