Obsolescence is inherent

Fusion Worldwide explains how an intelligence-led, proactive approach to obsolescence management helps manufacturers shield themselves from supply chain challenges.

Obsolescence is an inherent side effect of various supply chain challenges, with end-of-life and last-time-buy notices common across the electronic component space. Most recently, the pandemic put a magnifying glass on underlying acute and systemic root causes of component obsolescence. It also accelerated shortage effects. In these situations, manufacturers are in varying states of preparedness to defend against and work through the effects of obsolescence on their supply chain processes and their product lifecycles. Common causes that trigger component transitions include:

Reduced demand: Original contract manufacturers discontinue production of parts that have lower demand and cut into profit margins.

Mergers and acquisitions: An increased rate of mergers and acquisitions has led to more EoL notices following product line consolidation and technological upgrades.

Innovation: Component lifecycles are compressed as consumer demand for faster and better innovation increases.

Geopolitical events: Drawn-out trade conflicts, government sanctions and recurring economic shutdowns can unintentionally force product obsolescence.

Extreme weather: Extreme weather is circumstantial per region and has a domino effect across manufacturer operations and logistics. Severe droughts, major earthquakes and flooding can lead to factory shutdowns, longer lead times, limited supply output and shipping delays.

Supply chain strain: Logistics pain points, such as material, workforce and chipmaking equipment shortages impact production timelines.

Regulation: Governments pass and enforce regulations that prematurely halt the planned production of parts containing certain substances, which leads to unanticipated EoL notices.

As inevitable as end-of-life and last-time-buy announcements are, obsolescence effects don’t have to leave manufacturers vulnerable to volatile markets. As an independent distributor, Fusion Worldwide takes a consultative approach to partnering with manufacturers on component obsolescence transition plans. Fusion combines its industry expertise and proprietary service stack to collaborate with manufacturers to create smooth product lifecycle transitions, by leveraging:

Strategic Partnerships: Fusion Worldwide built its business on establishing strong partnerships with customers and suppliers. Fusion learns and assesses a customer’s business/needs and works to customize component supply plans on an individual basis. Without such supplier relationships, a customer’s component gap is at risk of widening.

Market intelligence: With a network of experts and market analysts across its 21 regional offices, Fusion Worldwide constantly monitors for obsolescence intel and component availability.

Real-time communication: Manufacturers who partner with Fusion can expect relevant and up-to-date market and component intel in real-time. With this information and communication approach, manufacturers can depend on Fusion Worldwide to expedite transition sourcing action plans for affected product lines.

Alternative parts: When a part becomes obsolete, Fusion will leverage its global relationships, resources and proprietary technologies to determine alternative and substitute part options to match a customer’s specified build.

Logistics hubs: Each customer’s business need is unique, which means every solution should be as well. Fusion provides inventory management support for last-time-buy and product lifecycle extension purposes.