Changing Our Approach to Product Lifecycles

What you’ll learn:

• The difference between urgency and importance—and how less-important tasks can take priority when they become more urgent. 
• How obsolescence can and should be viewed as a natural part of the product lifecycle, and how this shift in its approach is advantageous. 
• The importance of collaboration when approaching the inevitability of electronics obsolescence.

Before properly exploring the impact of legacy equipment manufacturing (LEM), we must first change our perspective on electronics obsolescence, product lifecycles, and supply-chain risk management.

Obsolescence is a slow-moving apocalypse. The changes are small: a product last-time-buy notice here…a supplier no-bid there… incrementally building until its impact is so enormous that the changes can no longer be ignored. By this time, the problem is long past its “breaking point” (Fig. 1).

Like dominoes falling over onto each other, sending ripples across the supply chain, obsolescence becomes so entrenched in the product’s lifecycle that sustaining it becomes a monumental and expensive task.

Traditionally, obsolescence is treated as something that can be dealt with only after it poses a material problem, such as the inability to obtain parts. That’s why it’s so important to change our approach to electronic obsolescence and our perspective on its effects.

Obsolescence isn’t something that can or should be put off until it can no longer be ignored. Rather, obsolescence is something that can be dealt with now.

Urgency vs. Importance: Reevaluating Our Priorities

Urgency and importance are often used interchangeably. However, these two concepts have significantly different meanings (Fig. 2).

A task can be important without being urgent, and vice versa.

For example, let’s say there are two different projects: a minor proposal due on a supervisor’s desk in an hour and an overview of the company’s goals for the next quarter due in a few weeks. Clearly, the second task is the most important. However, due to its immediate deadline, the proposal is the most urgent task and takes priority over anything else. 

Less-important tasks often take priority over more important ones because they’re considered urgent.

Why is electronics obsolescence a slow apocalypse? Because it isn’t a meteor strike that abruptly hits a city or an unexpected volcanic eruption. It’s a slow degradation of the product’s supply chain over a long period.  And because such obsolescence moves so slowly, it often goes unattended until it can no longer be ignored.

For example, when a freshwater well that has served as a water source for a small community dries up, it doesn’t usually happen all at once. It happens slowly.

The traditional mindset around obsolescence needs to change. As an industry, electronics OEMs and their customers routinely push the inevitability of obsolescence aside in favor of more urgent tasks. By the time an obsolete product becomes the most urgent issue, there are often fewer options available than would’ve been the case had the problem been addressed earlier.

Embedded OEMs are left scrambling to find ways to support their long-time customers while those customers wrestle with funding unforeseen obsolescence-related expenses. Examples include last-time buys, expensive technology upgrades, and even going without parts altogether.

As such, obsolescence routinely drains resources in terms of money, labor, and time. More difficult to measure is the opportunity cost of distraction. Embedded OEMs who manage old product designs are less able to focus on what actually brings them profit: innovating and bringing new products to market. Indeed, what’s the opportunity cost of tying up Sales, Product Marketing, and Engineering teams? Most companies don’t know.

Management teams across the organization also spend a disproportionate amount of time dealing with obsolescence issues, which are collectively low in value when compared to more strategic products. The true ROI of these distractions is typically low or negative.

Viewing Obsolescence as a Natural Part of the Product Lifecycle

Instead of putting off obsolescence mitigation activities until the issue becomes urgent, what if we view it as a natural part of the product lifecycle, which can be anticipated, planned for, and addressed as early as the product’s development (Fig. 3)?

Like any slow apocalypse, the earlier that teams address an issue, the better the result. If it’s a failing well, routinely measuring its water level can inform how much time is left before there’s no more water. Knowing how much time is left is helpful when exploring remedies—whether it’s finding other sources of water or conservation—usually both.

Electronics obsolescence works the same way. The earlier that companies address these issues and implement safeguards, the easier it will be to deal with the product’s discontinuation.

Viewing part obsolescence as an inevitability rather than a “risk” reveals new alternatives. Often, these alternatives are more easily worked on in cross-functional teams than by a sole engineer or logistician.

The Importance of Collaboration when Managing Product Lifecycles

Collaboration matters. Product obsolescence is a supply-chain problem, but companies routinely internalize the resolution of part discontinuation issues by instinctively bringing activities in-house.

Instead, what if companies took a different approach—treating an external supply-chain problem with an external supply-chain solution? Legacy equipment manufacturers (LEMs) can be that external supply-chain solution.

Apart from being experts in their general technical focus areas, LEMs are expert collaborators. How? Simply put, they rely on their application OEM customers to understand end-to-end lifecycle requirements. And they rely on embedded OEMs, the products’ original designers, for the technical know-how needed to sustain a product indefinitely.

Legacy equipment manufacturing is most successful when there’s collaboration amongst all involved parties to understand their needs and provide support for these legacy products. In partnership with the embedded OEMs, application OEM customers can continue to produce and service products for end-users.

LEMs get everyone together to find a way to mitigate the impact of the well going dry and to find new and innovative ways to meet the needs of all stakeholders.

Obsolescence is inevitable, but its impact doesn’t have to be. By collaborating early with the right people, it’s possible to ensure an ongoing source of clean water…and older designs of “legacy” electronics.