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Pre-empting and overcoming obsolescence

New Electronics talks to Debbie Rowland, Sales Manager at Charcroft, an independent, specialist distributor based in the UK, about how obsolescence management has and is changing and how organisations can better prepare and plan for obsolescence.

While there are companies making obsolescence management their core business, distributors like Charcroft, which specialises in the distribution of passive, interconnect, electro-mechanical, power and high reliability semiconductor products, can still play a central role in pre-empting or overcoming the problem.

How is the preparation and planning for obsolescence changing?

Historically, the challenge was to find original parts either by using 'brokers' or surplus OEM stock. Now, with the increased risk from counterfeit components and greater awareness of the value of 100% traceability, the safest and fastest option is often to identify an alternative device. This is particularly true for passive components where a modern alternative can often offer improved functionality or performance in the same footprint.

There are now companies who are making obsolescence management their core business, but engineers and buyers should not overlook the role that distribution can play in pre-empting or overcoming obsolescence by identifying potential replacements.

What are the key challenges in effective management of obsolescence when technology is changing so rapidly?

Passive components don't undergo the rapid technology developments which affect semiconductors. Instead, a passive is more likely to be made obsolete when the original manufacturer is acquired by another company or the device is replaced by a part with a slightly higher specification, such as a higher temperature range or more robust case. Understanding the exact cause of the obsolescence will affect the solution and outcome.

In the case of obsolescence through acquisition, the original part is often still manufactured, but under a different part number and manufacturer name. When a part is made obsolete by a new device with a slightly higher spec, it is just a matter of identifying the alternative. If neither of these approaches produces an alternative, Charcroft would cross-refer the original part to a different manufacturer's part number.

What impact is through life management having on contractual arrangements – in terms of risk mitigation, performance assessment and payment milestones?

There is certainly a greater awareness of the need for traceability with more customers asking for Certificates of Conformity or Conformance (CofCs) with each shipment. Whilst Charcroft has retained copies of every delivery note and CofC received since 1985, it has heard from customers who have had difficulty in getting CofCs from distributors whose systems are not set up for this. Scheduled deliveries seem to be the most affected as customers can get the CofC with the first shipment, but not with subsequent deliveries.

What do design engineers need to take into consideration in order to stay ahead of the obsolescence cycle?

Over-specifying parts can restrict the options available when the device is made obsolete. For example, it may possible to substitute a capacitor with a tighter tolerance of 5% or 10% if the original documentation does not specify that the part must have a tolerance of 20%, rather than a minimum tolerance of 20%. Specifying passives by a CECC or BS number also provides more flexibility than specifying a certain part number and manufacturer.

What makes for an effective obsolescence strategy?

OEMs should be able to rely on their distributor for advice and support through services such as parts list auditing for potential obsolescence risks, identifying alternatives and second sources early in the design cycle and a proactive procedure for advising customers of Parts Change Notices (PCNs) and last time buys. Specialist distributors in particular are likely to have their finger on the pulse of both their franchises and the needs of their customers, so this relationship is key.

How is obsolescence monitored? What is seen as best practice?

Obsolescence management is not something that can be easily bolted onto a service which is inherently focused on fast-paced consumer technologies and customers. It requires a culture of long-termism and planning for the next two or three decades rather than the next two or three years.

Some companies have made obsolescence their core business activity, but the irony is that they are relatively new companies with little if any historical resources.

How can smaller, specialist distributors best manage obsolescence when faced with stretching contractual requirements?

We believe that specialist distributors are better-placed to handle obsolescence than broadliners. As a specialist with customers in long life-time sectors, our systems and service have been developed with this at their core. Our resources include a library of legacy datasheets going back to 1975 and every CofC received since 1985. This makes it easy for us to access and search historical records to find the electrical parameters of an obsolete passive or to look-up the internal part number used by some defence OEMs and cross-refer it to the manufacturer part number.

Our IT system, for example is a fully bespoke system created by our in-house IT team. That allows us the flexibility to add new features and services just as we did when a single customer requested a copy of the CofC with every shipment. We are able to update our IT system and make this available to all customers at no additional cost. Rolling out this change to a team of around 50 employees is significantly easier and faster than changing a global IT system and training 2000 employees worldwide.

When managing obsolescence what impact do changes in the regulatory environment have and how should companies and distributors protect themselves against counterfeit product?

Traceability is the key and buying only through franchised distributors. Many non-franchised distributors are trying to invent new distribution models to disguise the risk which is inherent in sourcing from non-franchised or non-authorised sources. The only answer is to buy from fully franchised distributors who can offer full traceability and copies of the manufacturer's paperwork at no extra cost. For Charcroft, this is not a special service, it is our standard operating procedure.

What are the key challenges for the supply chain in the future?

There are a number of issues going forward including:

  • Tightening traceability as OEMs and CEMs seek to protect themselves from counterfeit parts
  • Ensuring that no extra cost is driven into the supply chain through panic-based reactions to obsolescence. For example, panic buying of obsolete components – as customers seek to acquire a life-time supply of the parts from any source worldwide – can drive the price up and mean the part becomes obsolete faster than anticipated.
  • Managing the response to Parts Change Notices (PCNs) so that affected customers are informed and the real implications of the change. Whilst some PCNs will result in obsolescence others can just give notice of a slight change, such as a slightly tighter tolerance or the change in the material used for tape and reel packaging.
  • As demand for obsolescence services grows, checking the services that may already be offered at no additional cost by specialist distributors
  • Retaining the specialist knowledge gleaned over decades and keeping this available for customers
  • Training, training, training – this never stops. Anyone can answer a phone and anyone can quote a price, but how many distributors can offer comprehensive knowledge of both new products and legacy parts?

Neil Tyler

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