The Road to Digitalizing Obsolescence Management

Digitalization will not solve all the problems in companies’ processes but could pave the way to address huge challenges like the unceasing issue of obsolescence management. Sourceability’s Datalynq is a huge step towards digitalizing risk management and obsolescence planning for designers and purchasers.

Recent technical, commercial, and political challenges across the globe and markets continue to create massive uncertainties. The big chip shortage for example – whatever the mix of root causes may have been – made those involved in the supply chain almost forget that some of the “scarce” components may not come back altogether.

However, obsolescence has moved back to the forefront for the entire industry and may even grow in its urgency. For example, at the Annual Conference of the International Institute of Obsolescence Management (IIOM), one topic of relevance was substance bans in the EU and their influence on an accelerated obsolescence trend, something with enough disruptive power to impact the entire components market.

Let us step back a bit to try to grasp the problem in its entirety. According to data providers like IHS or Silicon Expert, the electronics world sees roughly one billion different parts – from resistors to multicore processors. Data sets are not comprised of physical components and duplications are ubiquitous, so let’s calculate using 150 to 200 million different parts from hundreds of manufacturers which is still a crazy number.

The industry rules regarding product life cycles and long-term availability of replacement parts vary and can go up to 20 years in areas like medical or military. This goes way beyond the commercial viability for normal manufacturers and provides a great business model for specialists like Rochester Electronics or Flip Electronics, who cover the life cycle management for several hundreds of thousands of components.  

Many other products become obsolete with little or no warning – based on some basic rules or standards – and are gone after a short period of last time buys. So, a natural question would be: how many of the150 to 200 million parts mentioned above are leaving the show every year? One single percent would already put many engineers and procurement specialists into the misery of trying to manage the aftermath.

How does the entire industry handle this? How transparent is the information flow?  Which state of maturity have customers achieved to manage obsolescence effectively?  

Are they on the reactive side with a focus on PCNs, hectic redesigns, and expensive long-term solutions? Or do they already entertain life-cycle analyses and risk assessments based on third-party tools and services? Or do they have a complete strategy with self-planned obsolescence and proactive phase-out management with a deep understanding of manufacturer roadmaps? What prevents them from becoming more proactive in obsolescence management?

Despite the professionalization that took place over the last few decades, strategic life cycle management is still difficult and full of loopholes. If, as many say, obsolescence management starts in design, which tools will design engineers have available to live up to that enormous responsibility? Normal EDA tools have little to no indicators on supply chain risk or obsolescence. Nor do typical online offerings of classical distributors.

That is why Sourceability, a global components distributor, put its strongest focus on digitalizing the electronics supply chain, by providing digital tools that can help customers to make processes more efficient and transparent, particularly around availability risks, whether they are caused by market dynamics or life-cycle issues. The vision was to enable better risk assessment right from the design phase. The result of this vision was Datalynq.

Datalynq is a market intelligence tool that provides component-level data like availability, transaction history, and alternative sources. It then weighs and combines this data to generate predictive analytics on the future market behavior of the component and the viability of a particular design. It supports the strategic aspects of obsolescence management like long-reaching market information as well as the practical case-by-case management process in a SaaS-model or via API.  

In addition to risk and cost assessment, Datalynq supports DMSMS SD-26 rules and allows the health monitoring of entire bill of materials (BOMs) and the generation of compliance reports. Not surprisingly, EDA giant Cadence and Sourceability announced a partnership agreement that will enable millions of design engineers to access Datalynq features for millions of parts directly through the Cadence EDA-suite.

The recent chip shortage has certainly raised awareness of the need for seamless information flow in the supply chain. The positive news is that there are many more digital enablers on the way to help save the industry a lot of nerves, and money. Datalynq may just be the starting point to better digitalizing obsolescence management.

Author of article
Georg Steinberger
Georg Steinberger is a semiconductor industry and market expert with years of experience studying shifts and trends that impact the global electronic component supply chain.
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