Does Your Obsolescence Management Strategy Require a Vault?
One doesn’t have to try hard to recall the earthquake and tsunami disaster that befell the coast of Tohoku on March 11th, 2011.
In addition to the 15,894 confirmed people who lost their lives, 120,000 buildings were destroyed, 278,000 were half-destroyed, 726,000 suffered partial damage, and the total economic damage could be valued as high as $235 billion. Based on the figures compiled by the reconstruction agency set up by the Japanese government, over 50,000 evacuees were still in temporary housing as of February, 2017.
Nearly every manufacturing industry known was affected at least indirectly (banking, finance, automotive, etc.), but the tech industry was hit particularly hard. According to Business Insider, Japan is responsible for approximately one-fifth of the international semiconductor industry. It is also one of the world’s leading suppliers of flash memories, DRAM parts, and computer and telecom chips.
Large-scale manufacturers such as Toshiba, Sony, Canon, ON Semiconductor, Renesas Electronics, and Fujitsu were all forced to close factories and warehouses, and OEMs that relied on their components in product designs (Apple, for example, at the time depended primarily on Toshiba to supply NAND flash for its iPod and iPad) were forced to adapt however they could. This could mean negotiating with other supplies in other parts of the world, or moving to a third-party marketplace where component prices would reflect the sudden supply shortage. In the immediate aftermath of the devastation, The New York Times reported that the average price of an eight-gigabyte chip soared from $7.30 to $10.00; this may not sound like a lot on the surface, but for a large-scale OEM that requires the fulfillment of hundreds of thousands — even millions — of such electronic components to support the life cycle of their product, that 36.99% increase can prove significant, to say the least.
Risk is Predictably Unpredictable
Not every warehouse or factory will be subject to an earthquake or tsunami like the one experienced by Tohoku, but every location on earth has a degree of risk associated with it that could have negative consequences on an OEM’s ability to secure and fulfill inventory. This risk could take the form of a natural disaster, such as a flood, earthquake, or hurricane, but some risks go beyond just simple geography. Every physical structure, for example, has a degree of susceptibility to fire – and some risks, such as political uprisings, wartime catastrophes, or “acts of God” should always be considered possibilities, even if they can never be fully accounted for.
Somewhere in this sea of uncertainty, OEMs must find a way to maintain business continuity – an assurance that the critical components they require will be available when they need them. Of course, this means implementing a sound obsolescence management strategy should an OCM transition a component toward end-of-life – but in some cases where the loss of such components could mean the loss of millions of dollars in projected revenue, common solutions may not be sufficient. Business continuity can be expected, even probable, by relying on the warehousing capabilities of authorized distributors, supply chain partners, and, of course, your own company’s infrastructure. But, as easy as it is to believe otherwise, probable business continuity is not and never will be guaranteed business continuity.
Is the Partstat Vault Right for You?
True guaranteed business continuity, the kind that leaves no doubt that an OEM will have everything needed to complete a product’s life cycle, is almost mythical. But while Atlantis has yet to be found, and evidence of Bigfoot is still highly questionable at best, this particular myth has been proven to exist – and Partstat is the only supply chain partner that offers it.
Business continuity can be achieved, we have found, with the aid of our one-of-a-kind vault offered as part of our Critical Inventory Storage Solution. Crafted from state-of-the-art spun ceramic panels and rated as “best in class” for component and raw material storage, this weather-proof, natural disaster-proof, fire-proof structure is more than equipped to ensure an industry-leading ten years of business continuity.
Here are just a few of the features our vault offers:
• Fire Rated Class 350 Certification. Our vault has been tested to withstand temperatures well above 2,000 degrees Fahrenheit for over five hours.
• Superior to Concrete Construction. In the case of a fire, a concrete vault will fill with steam as a result of the breakdown of the cement bond. As a result, the atmosphere inside the vault would reach 212 degrees Fahrenheit and 100 percent humidity.
• Zone IV Seismic Rated. With a unique structural steel design, our vault offers three times the strength of a normal building.
• Clean Agent Fire Suppression System. Moisture, as any manufacturer knows well, is the enemy of component integrity. Extinguishing fires with automated sprinkler systems would effectively put out a fire, but at the cost of destroying irreplaceable last time buy inventory. Instead, when our vault detects a fire, it will automatically trigger a chemical suppression system that protects electronic components.
• Magnetic Field Protection. The vault walls and ceiling are enhanced with magnetic shielding to protect against magnetic interference, which can include anything from a common power surge to a lightning strike.
• ECD Dry Cabinets. Die and wafer banking requires careful monitoring of the storage area’s humidity levels. Contained within our vault, our ECD SmartDRY™ Cabinets are capable of storing ASICs, die, wafers, and raw materials at a relative humidity as low as 0.5 percent. Comparable nitrogen-based dry cabinets are only capable of achieving 6-10 percent relative humidity.
• 1,100 lb. Vault Door.
For some types of last time buy inventory, such as inventory that’s readily available in the open market or is only needed for a short-term lifecycle, there is nothing wrong with standard ambient storage. But after 26 years serving customers across the globe, we have seen time and again how the slightest disruption can affect an OEM’s long-term revenue goals. For some companies, such a measure may be too extreme for their needs – but for others who strive to take any means necessary to avoid the challenges a Tokuku-level disaster can bestow on a manufacturer, Partstat is here.
How important is guaranteed business continuity to your company?