Electronics and related parts are increasingly becoming obsolete within manufacturing, according to a new white paper on the subject, with more coordination and planning needed across the value chain to improve response to it.
The paper from the Association for Packaging and Processing Technologies (PMMI) found that technology-related matters are driving the uptick in obsolescence. Whether planned (such as a cell phone that’s made to be replaced in two years) or otherwise, obsolescence is considered a key contributor to the more than 62 million metric tons of e-scrap generated each year globally. So getting it more under control can help mitigate the growing volume of e-scrap that’s hitting the waste stream.
Among the paper’s findings:
- Among OEMs and CMs, 49% report more obsolescence events since 2021, with 80% of those citing new technology as the main cause.
- 52% of end users have seen a five-year obsolescence increase, with new technology (59%) and digital incompatibility (37%) the main factors.
- Among both groups, finding suitable alternative components (47%) is the biggest challenge in overcoming obsolescence.
Despite these numbers, the paper found many companies lack central organization in dealing with obsolescence. The authors found 58% of end users and 67% of manufacturers don’t have a dedicated person or department for obsolescence, while 26% of end users and 36% of manufacturers split responsibility between departments.
“Dedicated obsolescence responsibility could streamline notification timelines and provide a consistent point of contact for obsolescence knowledge,” the authors wrote.
That could also make the replacement process go more smoothly. Only 11% of end users and 17% of manufacturers reported a formal, consistent process to identify and address obsolescence. With notification lead times across the board of three years or less, making the process more seamless would help those across the supply chain prepare for changes and maintain backstock availability to minimize disruptions, the authors said.
All of this matters, the authors said, because of the increased pace of equipment replacement in various industries. Semiconductors, for example, now need to be swapped out within no more than five years, as opposed to the decades-long lifespans of older semiconductors in the 1970s. That pace of development requires organizations across the supply chain to remain nimble in adapting to new components, a process with which increased focus on obsolescence could help.
This semi-planned obsolescence forces end users to continually look for solutions that can be costly. Two-third of them find an alternative part that can be swapped in, the authors wrote, while 58% invest in new machinery to account for obsolescence; an equal percentage of users opt for preventive maintenance to prolong items’ lifespans.
Manufacturers, meanwhile, have to rework their own systems to account for more advances in electronic and digital technologies while helping their customers do the same. So more planning would help them ensure they have a procedure in place and the people to execute that plan.
As for end users, about three-quarters of them would be interested in an up-front package to address future obsolescence, the authors found, but two-thirds of manufacturers don’t offer any. Disparate strategies and the uncertain nature of obsolescence makes it tough to create such a package, some manufacturers said, but offering some sort of pre-set service agreement or overhaul kit would help ease the burden once obsolescence happens, the authors said.
Increased communication across the board is key to mitigating the issue, the authors added. Manufacturers should offer more lead time to allow the supply chain to prepare, and offering more planning to customers could give a competitive advantage.
“Stronger coordination across the supply chain can support more effective planning, reduce disruption and improve response to future obsolescence events,” the authors wrote.
The report was created in conjunction with DDR/REACH, a research and business development company, which conducted 190 surveys and 14 interviews to gather data.
