Proactive obsolescence management: Plan now or pay later

Skyrocketing costs of today’s industrial equipment coupled with the accelerated pace of technological change are creating expectations from customers that products will be supported far beyond the typical component lifecycle. Component obsolescence is inevitable and cannot be avoided.

By Myron Pugh April 28, 2015

The impact on today’s capital equipment manufacturers is dramatically different than it was three to five years ago. Rapid advances in technology, along with requirements for interoperability and connectivity, are driving a greater degree of cost and complexity into the development and support of industrial equipment. Due to the "systems" nature of industrial equipment, replacing one part is no longer an option. The entire system must be considered and evaluated to determine a cost-effective approach for supporting and sustaining products over their lifecycle.

Addressing obsolescence is too often done in a reactive or catch-up mode, rather than as a planned process. Of course, obsolescence is expected with custom electronics. However, existing reactionary methods of obsolescence management are inadequate to ensure cost-effective support for highly complex devices and systems. A new approach is required to maximize the value of devices and systems throughout their lifecycles.

Obsolescence management plan: To have or not to have?

This is a big question for many technology companies, and not one easily asked, let alone answered because of its impact on two interconnected things—development teams and future revenue. For many companies in this industry, the natural reaction is to pull a few engineers from new development initiatives and assign them to obsolescence projects. However, is this the best use of the time and talents of these highly skilled resources? Probably not.

As the focus of engineering staff shifts from new development efforts to obsolescence projects, new development programs are jeopardized. Schedule slippage, market windows, and executive management put future revenue at risk. Some additional risks faced by companies without a proactive plan for managing obsolescence include the following. 

Misapplied skill sets

Most obsolescence projects do not require highly skilled engineers. Assigning those engineers to tasks deemed unchallenging can often affect job satisfaction.

Efficiency suffers

An engineer multitasking between design and sustaining engineering projects is not focused 100% on either project. Each switch requires ramping back up to speed on the respective project. Also, design engineers are generally not familiar with the most recent techniques and tools for addressing obsolescence issues, thereby impairing efficiency on those projects as well. 

Missed shipments

The worst consequence of not having an obsolescence plan is missing product shipments. When you factor in the long lead times often required when redesigning boards—even allowing one component to go obsolete—can interrupt shipments and impact revenue. 

Field support challenges

The more revisions to a product in the field, the more challenging maintenance will be for field service. Planning for obsolescence can consolidate changes, and reduce the burden on field service to keep up with component change notifications. 

Purchasing decisions made under pressure

Any decision made under pressure rarely ends well. Last-minute buys are seldom accurate. Buy too little and the company could be short on inventory; buy too much and there is boatload of excess inventory. In addition, there are carrying costs to address that hurt the company’s bottom line and can create cash flow issues.

Obsolescence management places pressure on internal development teams, where the focus should be on developing new products. With this much at stake, capital equipment manufacturers need to consider a proactive systematic approach that will mitigate these risks. It’s time to approach obsolescence management differently. 

Systematic approach

To address the potential challenges of obsolescence management, Foliage applies a rigorous phased approach to look at immediate remediation needs, while allowing for the re-evaluation of the system for possible long-term ramifications and potential system upgrades.

The first task of any obsolescence program is to clearly identify the goals of the project beyond the need to replace obsolete components. Other goals may include feature and/or performance enhancement, Reduction of Hazardous Substances (RoHS) compliance, and possible cost reduction. Once the overall goals of the project are defined, using a phased approach provides the best results and minimizes the risk of unintended consequences from a redesign. 

Phase 1: Current assembly status

The project component criteria are established, inputs reviewed, and the current components on the bill of materials (BOM) are checked for compliance. Any components that do not meet all component criteria will then be split into the component categories according to risk and criticality. This phase is also dedicated to select an obsolescence management tool to help the team manage the effort. 

Phase 2: Proposed alternates and redesign concept

Alternate parts are researched according to component criteria established in the first phase. The project lead typically reviews the work on a daily basis as it progresses during this phase. Problem components are the focus, and those that prove difficult will receive attention from senior members of the engineering team. Once all categories of parts are reviewed and approved, the final consolidated BOM along with the RoHS certifications are created using the obsolescence management tool. Additionally, the output of this phase is used to assess any needed design updates to the boards.

Once the second phase is complete, a clear obsolescence management plan is emerging, and it is time to address the most critical obsolete components on the boards not requiring redesign. However, if the review has determined that any of the boards will require redesign, then the team will proceed with phases 3 through 6.

Phase 3: Hardware design reviews

If a redesign is required, hardware documentation is updated, if necessary, and a review of the hardware documentation in the context of the released version of the product requirements is performed. From updated design documents, schematic and board layout changes are made.

Phase 4: Acquire prototypes, bench test, and debug

Based on outputs of the reviews, decisions will be made to fabricate prototypes and produce an agreed-upon number of prototypes. When this phase is complete, design documents will be updated, if necessary, and the designs are readied for further development of software or complex hardware code. 

Phase 5: PLD / FPGA design review

If programmable logic device (PLD), A field-programmable gate array (FPGA), or firmware modifications are required, this phase is dedicated to that work.

Phase 6: Prototype design protocols

Once the board bring-up and any firmware modification of the functional prototypes is complete, the team reviews the existing test and verification protocols and delivers updates where needed to ensure full test coverage and traceability for the new designs. 

The benefits of planning for obsolescence

A phased approach to obsolescence management is not only crucial, but also a distinguishing characteristic of successful and proactive obsolescence management programs. Taking a proactive approach to obsolescence allows for minimization of obsolescence costs, while maximizing the gain each time a design is revisited.

Here are three additional benefits: 

Add additional capabilities

Products are often released without total functionality. Capabilities are usually added according to a planned product roadmap. If obsolescence needs are understood, then the two requirements can be coordinated to save time and money. 

Include future enhancements

With enough warning, obsolescence of a key part and the need to replace it, can lead to product enhancements to be implemented that were not in the original design. 

Improve product performance

In many cases, higher performance parts can be form, fit, and function compatible with the existing design, but without system changes (such as firmware, FPGA code). The benefits of these parts may not be realized. With a planned approach, the decision to do a design change can be made based on return on investment-not whether it will impact immediate production schedules.

Confront obsolescence now

Sustaining systems and devices is viewed as a challenge by many companies in various industries, but it shouldn’t be. Obsolescence affects system support, product safety, performance, reliability, and the bottom line. There’s too much at stake not to have a plan in place for proactively managing obsolescence throughout a system’s lifecycle. One that addresses system architecture, communication interfaces, software framework, redesign, sourcing strategy, tools, and so on, reduces total cost of ownership and improves the bottom line.

Capital equipment manufacturers can realize significant benefits with a proactive systematic approach that reduces lifecycle-sustainment costs, and acknowledges and addresses inevitable obsolescence problems throughout extended product lifecycles.

They gain the ability to identify system parts that may become obsolete (potentially a subsystem, module, or software) and minimize the impact, and in some cases, use it as an opportunity to upgrade the system with higher performance parts.

Obsolescence is inevitable, and the only way to manage it cost effectively is to put a plan in place. Think of it as a preventive maintenance program for products. Implementing a systematic obsolescence management plan now, while clear heads prevail, will ensure not needing to deal with the more expensive consequences later.

– Myron Pugh is the vice president and engineering director of Foliage. He has more than 30 years of experience. His business experience encompasses contract R&D and product companies, and his areas of focus include cross-functional team development and leadership in product development and operations. He holds bachelor’s and master’s degrees in electrical engineering from the University of Washington and Stanford University, respectively. Edited by Eric R. Eissler, editor-in-chief, Oil & Gas Engineering,

Key concepts

  • Make a plan to tackle obsolescence early.
  • Take a the six-phase systematic approach.
  • Confronting obsolescence early will lead to better product design and extend life.

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