Component Management – Begin Before the End


6 Steps of Successfully Planning for and Avoiding the Costs of Obsolescence


Obsolescence is inevitable. Time marches on, technology grows older, but obsolescence is not the end. Obsolete product can still be available, obsolete product can still be planned for; obsolete product can save businesses money. The challenge requires planning and preparation, but facing the issue is for the better. Rochester Electronics presents 6 steps for managing component obsolescence.


Best methods for both planning for and minimizing obsolescence costs:


1. Obsolescence management begins at the design and product definition

phases.


Component selection in development is a deciding factor in potential premature product redesigns and requalification. We have all heard stories of products being launched with obsolete components.


This is a particularly relevant issue for customers with lengthy development and qualification cycles. New cars, aircraft, or industrial controllers will typically spend up to 5 years in the design and qualification stages. Add 5 to 7 years of production and 7 to 10 years of after-sale support, it isn’t uncommon to require upwards of 20 years of component supply.


Choosing the right component technology and supplier can have dramatic impacts on long-term availability. The lowest-cost sources may not be the best choice for long-term supply. It is difficult to obtain absolute guarantees of stock availability over the long-term, as there may be unforeseen natural disasters, market instabilities, and product acquisitions, which cannot be predicted years in advance. Therefore, a reliable supplier needs to demonstrate a proven transition process through end-of-life (EOL) and into long-term authorized supply, and long-term production. It is imperative to ask any supplier what their commitments are to long-term availability.

Key questions to consider:


  • What is the component lifecycle status across the application’s lifetime?


  • Are the key components of the design (software-packed microcontrollers, FPGAs, or ASICs) comprehensively documented?


  • Can the true design files (VHDL, Spice-Models, Test-Vectors) be retained and archived at the design phase to offer a chance of rebuilding if the unexpected happens?


  • Does the design contain proprietary intellectual property? If so, the ability to “port” such designs when the components are made obsolete, will be compromised, or subject to relicensing and royalties.


2. Understanding the total costs of obsolescence


It is important to understand and model the costs and risks associated with obsolescence. Component obsolescence is never just a purchasing problem to be addressed as an afterthought.


Key questions to consider:


  • Does the project plan need to include anticipated product refresh or re-design during its life? If yes, how will it be funded?


  • How will the business account for the capital locked down in long-term component sourcing?


  • What will the component obsolescence impact be on after-sales service commitments?


  • What effect would a shortened product lifecycle have on your customers and end-users?


3. Planning for obsolescence and resource management


If your equipment has long qualifications, productions, or in-service lives you will face component obsolescence. Manufacturers who are surprised by component obsolescence and treat it as an inexpensive inconvenience to be overcome will pay the price in disruptions, costs, and risks.


Best-in-class organizations devote skilled multi-disciplined workers to obsolescence management. Preventative planning by purchasers, component engineers, designers, and program managers can reduce or eliminate cost and risk. As they say, “The devil is in the details” and cost analysis must be done on a line-by-line basis. The unexpected obsolescence of a 1-cent transistor could potentially stop a program in its tracks, just as easily as the obsolescence of the main microcontroller could.


4. Identify important Product Discontinuation Notices (PDNs) that may affect your business and monitor them.


Proactively monitoring component lifecycles is crucial to anticipating problems before they occur. Excellent commercial tools are available which track a component’s lifecycle, lead-times, and specification changes. Such tools provide alerts that can be triggered when PDNs are issued. Keep in mind that these tools use current market trackers to estimate remaining component life.


There are generic management databases allowing users to load BOM structures into the database matching and highlighting any PDN affecting the specified products. Each manufacturer has their own unique PDN format. It can prove very time-consuming to assess and log all affected part numbers manually. Some PDNs may contain over 500-part numbers.


It is increasingly difficult for manufacturers to know which PDNs affect their products. Increased system integrations and the use of embedded processing, means that sub-tier suppliers control these BOMs. Poorly managed component obsolescence in either of these areas can still trigger an unnecessary redesign for the owner of the overall system, along with all the associated costs.


Key questions:


  • Will your sub-tier suppliers share their BOMs?


  • Do your sub-tier suppliers have adequate obsolescence management processes in place


While many of the best Component Electronics Manufacturers (CEMs) offer proactive component lifecycle management as a service, others are completely reactive. It is important to know if a CEM has an adequate obsolescence management process in place. PDN notifications are typically only aimed at the direct purchasers of the component of the last 2 years. Intermittent or irregular production, or low-level after-sales service support, may not trigger the PDN notification.


5. Last Time Buy (LTB) – What to forecast?


Forecasting is not an exact science and, unfortunately, it is likely that forecasts will be inaccurate. It is difficult to anticipate product needs years in advance or possible market disruptions. If production forecasting is difficult, accurately predicting after-sales needs can be challenging. Underestimating needs has a risk of prematurely terminating a product and losing sales. Overestimating needs ties up unnecessary capital in stock, while paying excessive storage costs. Additionally, if a redesign in the future is planned to limit the cost of the LTB, then the design, requalification, and the opportunity costs of using precious engineering resources all need to be factored in.


While there are very few options beyond placing a traditional LTB order, working with a supplier with an established EOL transition path offers the hope of risk-free ongoing authorized stock and production. If demand rises, redesigns are delayed, or in-service commitments are extended, then aftermarket partners will be able to support business needs. These suppliers provide an extra layer of security to the forecasting process.


6. Purchase from 100% Authorized Sources


There is a common misconception that once the original manufacturer stops producing a component, that unauthorized, or grey market sources are the only option. The risk-free option of an authorized after-market supplier should always be the first choice.


The risks of counterfeit and poor-quality components from unauthorized sources represent a significant risk to production yields and Mean Time Between Failure Rates (MTBR) in the field. Inferior or substandard testing by unauthorized 3rd parties provides a false veneer of confidence that authenticity can be tested. This mimicry of testing is a visual, an x-ray, or a poor partial copy of the original manufacturer’s test processes. Full tri-temp testing is rarely offered, and the risk of commercial-grade components being re-marked as industrial, automotive, or military parts is always possible.


Unauthorized component risks include:


  • Poor handling: resulting in ESD damage and the destruction of the device. Externally there will be no indication that a failure has occurred.


  • Poor storage: excessive heat, cold, or moisture during any part of its storage life. This can lead to external lead corrosion and failed solderability or moisture ingress into the plastic device and a catastrophic failure of the device, as it is subject to reflow temperatures.


  • Fake documentation that mimics the original specification or lies about performed tests.


  • Recovered, re-marked, or repackaged components masquerading as another product.


There are also documented quality problems related to foreign chemicals. Cleaning chemicals used to recover, wash, and re-mark used components, slowly migrate into the products, shorting and corroding bond wires, and pads. Superficial testing is not guaranteed to find these faults. Recovered components may not only pass these tests, but also survive for a period in service. However, their inevitable failures will destroy MTBR figures, and result in reduced reliability and damaged reputations.


Original Components Manufacturers (OCMs) do not provide guarantees for products purchased through unauthorized channels. Many explicitly prohibit the sale of components to unauthorized sources.


Authorized sources, such as Rochester Electronics, offer risk-free sourcing and are the only truly safe option for keeping customers’ production lines operational during shortages, allocation, and obsolescence.


Fully authorized distributors, like Rochester Electronics, are compliant with the SAE Aerospace Standard, AS6496. Simply stated, they are authorized by the OCM to provide traceable and guaranteed products with no quality or reliability testing required because the parts are sourced from the OCM. Rochester is 100% authorized by over 70 leading semiconductor manufacturers.


Providers who are not fully authorized may market themselves as AS6171/4-compliant. This indicates that they do follow standardized inspections and test procedures but may have minimum training and certification requirements to detect suspicious or counterfeit components. If AS6171 testing is being done, that means the product is not being tested to the OCM test program. OCM test programs test significantly beyond datasheet parameters and are meant to filter product for no escapes even when there are millions of units sold. AS6171 testing is not equivalent to OCM testing. While better than no compliance at all, if AS6171/* testing is offered in isolation, this potentially indicates that the parts were not sourced directly from the OCM but have only passed AS6171 testing. This merely minimizes but does not eliminate risk.


Over 10 billion of Rochester’s in-stock devices are classed as EOL by the original manufacturer, from which the product is directly supplied. Rochester is well-positioned to offer a continuous source of supply for applications, where the product lifecycle extends the active availability of a device. Rochester’s factory-direct offerings negate the need for expensive redesign, requalification, recertification, and avoids the risk of sourcing hard-to-find products on the open market. Components are 100% authorized, traceable, and guaranteed direct from the OCMs. As a result, Rochester can offer the original component warranties and guarantees.


As a licensed semiconductor manufacturer, Rochester offers on-going solutions using information and technology transferred directly to Rochester from the OCM. Rochester utilizes the original manufacturer’s die and fab processes, matching the original designs, assembly solutions, and test protocols. All the resulting product is 100% certified, licensed, guaranteed, and sold with full approval under the original manufacturer’s part number.


Rochester’s licensed manufacturing solutions are current date code, guaranteed to the original datasheet performance, and our team is ready to assist those customers navigating through strict regulatory requirements. Rochester has manufactured over 20,000 device types. With over 12 billion die in stock, Rochester has the capability to manufacture over 70,000 device types.


To best support the customer’s ongoing need to extend the life of semiconductor products, Rochester continues to invest in design solutions, ensuring your system software does not need to change, while simultaneously creating drop-in hardware solutions that minimize new qualification expenses. Rochester specializes in the authorized porting of products from original fab processes but offers form, fit, and functional replacements as well. Regardless of the design solution from Rochester, no errata are introduced, and no system software changes are needed.


Expect and plan for the unexpected. It is now more vital than ever before to have partners who can support businesses during unforeseen or unplanned component discontinuations, completely risk-free whenever they occur.


When facing critical component EOL and obsolescence for long-life applications, think Rochester Electronics; the experts in providing dependable and trusted “long-term” semiconductor lifecycle solutions.