Managing aggressive EoL

Rebound Electronics’ CEO, Simon Thake, offers purchasing professionals advice on mitigating risks when faced with aggressive component end-of-life issues

Q. What advice would you offer purchasing professionals faced with obsolescence, extended lead times and rising product costs?  

One solution to obsolescence is to work with an experienced and proactive distributor. They will help source hard-to-find components or, if they are no longer available, find a viable replacement. It’s vital to ensure a distribution partner can offer multiple options to ensure your supply chain isn’t held to ransom.

Rebound Electronics has invested heavily in a deep spread of supply worldwide to support clients with new sources and availability without compromising quality. In 2019 we created  a new Asia focussed authorised line card focusing specifically on lesser known Chinese and Taiwanese brands. Our line card offers a broad technology mix covering a wide range of applications. It is designed to offer our clients more cost effective alternatives to tier one brands which are now under lead time pressure. It also offers a viable alternative on customers’ AVL with the advent of aggressive obsolescence from major manufacturers.

Q. How has demand for replacement components changed over the last 12-months?

We have seen a dramatic increase in lead time and supply restrictions since mid-2020, with the Covid-19 pandemic clearly compounding issues that were already in play. We are now in a true allocation phase with manufacturers across a broad range of product groups regularly de-committing on scheduled deliveries. This has led to severely depleted stocks within the traditional distribution network. 

Tier one blue chip semiconductor manufacturers are facing unprecedented production challenges caused by many factors including: raw material shortages; geopolitics such as the US/ China trade war; lack of manpower due to Covid-19; extreme weather; and even factory fires. 

As demand for product grows as life returns to normal, we expect further supply chain strain, continued allocation and withdrawals by manufacturers and broadline distributors. Working with an independent distributor with a truly global network is key to exploring market options.

Q. When a component is going obsolete what are the notification and last-time-buy time frames?

Obsolescence is one of the most substantial variables in clients’ supply chains. Aggressive obsolescence will continue in the fast-moving semiconductor market. As such, real-time BoM/AVL analysis and data management are as integral as partnering with an experienced and proactive distributor.

To shield clients from some of the impacts, we have partnered exclusively with IHSMarkit as a third party data partner allowing us to amalgamate our own extensive trading data with their real-time priority data feeds to ensure we have access to and pass on critical market information to clients who partner with us. We have also enhanced our own cloud-based trading software to incorporate features such as PCN and EoL notice feeds, along with many other useful features designed to stay one step ahead.

It’s vital to partner with a distributor who can work with you on data analytics including risk mitigation and product life cycle. As you become aware that a component is reaching its end of life, collaborate with your supplier to research availability and pricing.

Work with a quality focused supplier who can walk you through counterfeit mitigation measures and testing options to ensure you are buying genuine reliable product. Consider testing and third party storage if products will be shelved for extended periods.