When Almost 500,000 Parts Reach EOL Annually, You Need an Obsolescence Strategy 

When a critical part winds up on a component manufacturer’s end-of-life (EOL) notification list, it sets off a scramble to locate quantities in the market already, identify and test alternatives, or kick off a redesign. None is ideal. The time, expense, and headache of sourcing components at that point also come with other risks — grey market parts of questionable provenance, production delays, and the inability to repair equipment, to name just a few.

Complex systems with long lifecycles, such as industrial controls, mil/aero equipment, and high-end medical devices, are particularly vulnerable to EOL issues, as the parts that comprise them may need to be replaced long before the equipment is ready for disposition. So are single-source components that aren’t easily matched by other vendors in terms of specs, performance, and functionality. The biggest drivers of obsolescence cited in a 2024 survey by Z2Data are low or declining demand, technological innovation outpacing component lifecycles, and supply chain disruptions. Risk factors that increase the likelihood of EOL also include reliance on older fabrication nodes or military- or automotive-grade components with longer but fixed lifecycles.

The Z2Data survey found manufacturing and supply chain professionals struggling with:

• Ensuring compatibility and performance with replacements 
• Forecasting obsolescence trends accurately
• Identifying alternative components
• Securing budget for obsolescence management
• Lack of EOL notification

As to the latter, while component manufacturers generally strive to give their customers several months’ runway before parts are fully retired — one year to place orders and another year to take delivery is typical — that’s not always the case. Approximately 30 percent of the 473,910 parts that reached EOL in 2023 had no product change notifications (PCNs) issued by their manufacturers.

Even with well-planned EOL notices, the time horizon may shorten dramatically for reasons beyond the supplier’s control. Their own vendor may discontinue a component critical to their manufacturing process. The flow of raw materials may be interrupted. A large order may come in that directs capacity away from smaller requisitions. A machine on the production line may break. Supply chain disruptions may wreak havoc.

As they say, the best offense is a good defense.

Preparing for EOL: Anticipation and Mitigation  

There are two ways to think critically about EOL: strategies that anticipate it before notifications arrive and measures that mitigate its impact once they do. Let’s take a closer look at a trio of strategies that can be deployed at the earliest stages of product development, as EOL looms, and once critical components have been discontinued.

• DfX at the earliest stages of design – Design for excellence (DfX) principles come into play as engineers evaluate cost, manufacturability, reliability, sustainability, and other factors, including obsolescence. Planning for and managing the obsolescence of individual components — design for obsolescence (DfO) — contributes to device longevity and serviceability. Obsolescence risk screening tools can identify high-risk components by assessing part lifecycle status, especially for components with known EOL patterns such as custom ASICs, memory, passive, and one-off configurations. Selecting parts that tend to be available longer-term, avoiding sole-source parts in favor of those offered by multiple vendors, and using modular or programmable components can reduce the need for redesign and ensure equipment can be supported long-term.
• Securing product before it reaches EOL – Well-managed buffer inventory programs enable OEMs to maintain a strategic reserve of components to ensure uninterrupted demand when supply is questionable or demand escalates. Stocking extra quantities of microcontrollers, memory chips, power ICs, and other critical semiconductors helps absorb fluctuations without halting production, supporting long-lifecycle products and providing lead-time insurance against unpredictable component cycles. But it can get pricey, too, tying up capital, piling on storage costs, and instigating write-offs when technology or designs shift. A solid program balances supply assurance, cost control, and operational flexibility.  
• Extended manufacturing once components become obsolete – The lifecycles of electronic components often do not align with those of end products. Extended manufacturing programs can help OEMs maintain product continuity, avoid redesigns and requalification hurdles, and address unique sourcing difficulties within their supply chains. Authorized distributors can play a key role here, securing finished goods, as well as wafers, die, and intellectual property from component manufacturers to ensure long-term product availability. Delivering genuine 1:1 drop-in replacements guarantees a reliable, cost-effective supply of components that are identical in form, fit, and function to the original devices.  

How Flip Electronics Helps Procurement Pros Make Obsolescence Obsolete

By collaborating closely with authorized partners and leveraging extended manufacturing capabilities, Flip Electronics helps procurement teams strategically build inventory to safeguard against obsolescence challenges. Supply chain and bill of materials (BOM) analyses help minimize or eliminate component shortages. Continuously monitoring fluctuations in supply and demand allows us to adjust our inventory profile to meet current needs and provide optimal solutions for the future. This proactive approach ensures a stable and reliable supply of high-quality parts for new products and legacy programs. Get in touch to learn more about strategic solutions for sourcing, procurement, and efficient supply chain management.

To read the article on Procurement Pro (Pg. 20), click here: https://magazines.electronicspecifier.com/view/989573134/20/