3 Steps to Intelligent Life-Cycle Management
Most professionals are aware of what a product life-cycle is, how it works and why it matters. In short, a product gets introduced into the marketplace where it (typically) starts on a bell curve reaching maturity and then phasing out of relevance. For some industries like clothing this phase out may bleed into some new adoption later on, but in industries such as electronics and aerospace these products become obsolete and relatively unusable. Here are three steps to help you remain confident in your management of ever-shrinking product life-cycles:
Step 1: Stay Vigilant
The first and most important step is to stay vigilant, be aware of changes in the industry and don’t let complacency set in. Once that part goes obsolete you are out of luck and will be looking to the open market to make your purchases. The downside of the open market is very real in the electronic component industry where counterfeits and faulty parts are all too common. Last year 20% of electronic Product Change Notifications (PCNs) had an End of Life (EOL) date that was effective immediately, so being aware of when a change occurs and being prepared to act is invaluable.
Step 2: Have a Game Plan
The second step is to have a plan, be prepared to act and make sure that it is sound. When a product your company depends upon for production or service goes obsolete you have three choices: redesign your product or service, initiate a large Last Time Buy, or stop offering that product or service altogether. Some services and products may be very easy to alter, but for many technology companies with complex interdependent systems this is not the case. No business wants to put a cork in a revenue stream, so option three rarely comes into play; but initiating a Last Time Buy can have the effect of turning a pain into gain. Done properly, LTB negotiations can lead to lower product prices, better inventory management and a closer bond between buyer and supplier.
Step 3: Have a Backup Plan
The third step is to have a backup plan, build yourself an escape route and allow yourself some room to breath if you find yourself in a product obsolescence bind. Since products can leave the market at almost any time it is imperative that you (or your company) is ready for the occurence. Hopefully if Step 1 was followed you caught the EOL early and have time to maneuver, but even the most vigilant team will be caught off guard by an immediately effective obsolescence. With 41% of electronic components being obsoleted without a PCN in 2015 the need for a personalized backup plan to address these very costly events becomes practically inescapable.