Story of an American Electronics Manufacturer Pt. 3: The 1990s
(Editor’s note: This is part 3 of a six-part series on the history of Matric Group, from a $20...
Original equipment manufacturers (OEMs) who rely on EMS companies for critical electronic parts face obsolescence risks frequently - in some cases every day. Failure to keep up can doom the life cycle of your product.
Limited availability, dubious component quality, and conflict mineral laws are common causes of you and your manufacturer’s headaches when it comes to sourcing parts.
That’s why we use the best obsolescence management software in the industry — SiliconExpert. SiliconExpert functions as a database of over 250 million components from thousands of suppliers, including:
“But I already get life cycle forecast data points straight from my component suppliers,” you might be saying. This is an inferior strategy vs. using forecasts based on algorithmic & historical data points from independent electronic component databases.
Instead, SiliconExpert’s database (and other good obsolescence management software) allows you to search for parts and access vital information like obsolescence forecasts, environmental compliance, and inventory data. In short, it’s a one-stop shop for vital component information.
A lot of obsolescence goes back to what the customer will allow or accept. Some OEMs want to see full traceability for 20 years. Others simply don’t care what you put on their circuit boards.
Matric has one customer that, whenever it learns a part is going obsolete, will give itself a full 1-2 year window. More specifically, they tell us to run out and get 1-2 years’ worth of that component before the competition snatches them up. By the time the inventory is used up, the demand has settled down and they never run out — and there’s no dip in their ability to sell products.
You’ve got to manage your bill of materials, too. Delaying the minimum investment will hurt you — it’s a matter of paying a little now so you don’t pay a lot more later.
Unfortunately, not everyone else is so proactive — or careful.
It’s critical to look not just weeks ahead, but months and even years ahead for potential component issues. You’ve got to especially stay on top of order submissions for medical, aerospace, and some other component types that have strict requirements.
Failure to have a specific part could result in a complete redesign. Regulatory agencies don’t exactly turn on a dime, either, so your lead time and cash flow issues could compound.
Obsolete products for any industry can make the product price go up. If supply is low and you don’t get it in time, you’ll have to pay extra. In the end, you either have to swallow that extra cost or dump it onto the end customer — either way, not good.
So when you get that last-time buy or obsolescence notice, don’t underestimate the consequences.
You don’t want to mess around with black or “gray” market goods. (We use “gray” because these sellers maybe a little more reputable than a true black market vendor, but you’re still running significant risk in buying from them.) At some point, you’ll end up with counterfeit parts or an incorrect date code.
Without proper obsolescence management, you may not receive your product on time — or at all — because the components you need aren’t readily available or are only available on the gray/black market.
We at Matric want to communicate with the customer before it reaches this point of no return.
Losing a key component at the wrong time can be downright terrifying to OEM teams trying to get a product out.
You want an electronics contract manufacturer that’s providing feedback where there are issues with sourcing. You want open communication with engineering so the vendor can proactively iron things out.
If you can’t find a certain part, Matric will help you find an alternative that is as cost-effective as possible without impacting product performance. (An electronics contract manufacturer with decades of experience should always offer this insight with every design you hand it.) When we offer an alternative, we help you understand what happened and why (i.e. a last-time buy notice.)
Continuous dialog, and when you do reach that point, looks for alternatives that can be substituted, and if there aren’t any, work with Matric and your internal engineering team to come up with solutions.
Dealing with obsolete parts can be downright scary. Component shortages, counterfeit parts, surprise life cycle changes … there’s a lot to consider.
Don’t carry the burden yourself. Work with an electronics contract manufacturer who’s been through it all before and knows which tools and strategies to leverage for reliable design and cost-efficiency.
Let’s work together!
Tell us on the form below and we can directly advise you on your strategy.