Introduction to obsolescence management
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Managing obsolescence is increasingly becoming a key business process requiring organizational buy in and cross-functional support which can often include the end user or customer.
What is Obsolescence?
Obsolescence frequently occurs because either:
- Raw materials become unavailable
- New products come out which are superior in some or more aspects and replace pre-existing parts.
Whilst obsolescence is preceded by declines in popularity it can also be facilitated by new technology and manufacturing practices that create new products or redesign old ones. Obsolescence can occur at various stages within a bill of material – for example a PCB component may become obsolete (and replaced) in a radio – this does not render the radio obsolete merely the component part.
Robust management and processes are critical especially with consumer demand for sustainability and products with increased life cycles. But how should companies manage obsolescence? Typically organizations will appoint an obsolescence management team.
The role of team is to develop and deploy processes which facilitate the prediction of materials and equipment obsolescence and develop mitigation plans that minimize cost increases and schedule challenges.
- Obsolescence Management boils down to three core activities
Reduce likelihood of future occurrences
Awareness of possible issues
Mitigation of issues
This will often involve the development of a database that contains parts and can be used to track obsolescence issues. Additions to the database are typically triggered by the issuing of obsolescence notices from suppliers – the database can then be used to track notices against parts and ensure that corresponding action is taking place.
There are inherent problems in relying on suppliers and manufacturers to send notices in a timely fashion coupled with issues in identifying users to send notices too in the first place (many organizations will offer obsolescence notices as a subscription service). The obsolescence management team must make sure the data gets sent to the right person within the organization as notices can easily be misdirected.
Obsolescence management centers around a control database. Most companies have commodity managers or system experts who are knowledgeable about (and often have responsibility for the management of) material commodities such as electronics. Utilizing the obsolescence database and the knowledge of the commodity expert individual component parts can be tracked issues can be captured codified then prioritized in terms of criticality.
Many businesses conduct regular reviews of their parts master / parts list to review possible obsolescence issues. This regular health check encourages confidence prior to manufacture and where issues emerge, the design team can review the options available based on feedback from the Obsolescence management team.
Summary
Obsolescence management is a key activity and one that requires resources and tools. Whilst often overlooked it can be of such criticality that a failure to identify obsolescence issues can bring manufacturing processes to a standstill or see costs skyrocket.