Obsolescence Management: New Platform or New Employees?
There is arguably no greater sign of healthy company growth than news that a company is hiring new employees — and recently, despite a significant electronic component shortage that has strained many an OEM supply chain, one has not had to look hard to see this in the manufacturing industry. According to the U.S. Bureau of Labor Statistics, for example, the job market for electrical and electronics engineers is expected to grow by approximately 7 percent between 2016 and 2026. According to professional services network Deolitte, 2018 saw a net employment gain of approximately 400,000 new job openings alongside a projected 3.7 percent GDP increase in the manufacturing industry moving into 2019. In fact, growth has been so significant that the manufacturing industry is currently seeing one of the tightest labor markets in history, with more openings available than skilled labor.
In the broader picture, many might consider a tight labor market to be a good problem to have because its very existence indicates nearly full employment. From the manufacturer side, however, this also means entering into a competition with rival companies to draw what talent there is to be had through increased wages, worker benefits, higher standard of living, etc. This market reality creates two unique dilemmas:
1. If fulfilling all available job openings is unlikely in a limited talent pool, which opening should be prioritized first?
2. Once the talent is hired, how should their time and skillset be maximized for the benefit of the company?
Both of these questions are directly tied to how a company views its obsolescence management strategy. Now more than ever, small and large-scale OEMs alike are incorporating innovative new approaches to insulate their supply chains from unexpected disruptions related to obsolescence and allocation. How these OEMs accomplish this, however, is as diverse as the manufacturing industry itself.
In some cases, this means dedicating an increasing number of resources toward inventory management. Done in-house, this can be a taxing and expensive process; not only does this require a team to not only acquire and analyze incredible large and complex lines of data to obtain an accurate understanding of the market for each component or semiconductor on their bill of material, but time to directly contact each individual supplier to confirm product lifecycles. It is impossible to view such a situation without considering what must be sacrificed to maintain it; for every resource dedicated to supply chain continuity, this represents a resource that could have been dedicated to innovation, to moving forward and bettering the company’s standing in the market. Instead of prioritizing getting ahead, OEMs in this situation must do everything in their power just to get by.
Innovation in the supply chain industry itself, however, has offered OEMs an alternative: an all-in-one BOM Monitoring Solution that does everything a dedicated inventory management team can do and more, instantly. Immediately upon upload, your bill of material will instantly be analyzed with the help of 50 Billion points of Big Data from over 5,000 component manufactures, giving you an unprecedented view of the market state for individual components. PCNs, last time buy dates, obsolescence projections, the tools to accurately predict allocation, access to intuitive real-time trending charts for lead times, average price, and inventory levels — all of this critical information that once required significant resources to obtain is available with a few mouse clicks. Even the tedious process of lifecycle confirmation is handled through a live team of BOM Specialists.
Between these two strategies, one obviously holds more advantages than the other — but arguably the greatest benefit of adopting a BOM Monitoring Solution is the effect on OEM resources. Highly skilled employees — especially ones recently acquired in a labor market where prospective hires have the leverage — will be able to be used to their full potential.
The choice between new employees or a new platform to cover obsolescence management is slightly misleading, because it is hardly a choice at all; one requires sacrificing one initiative for another, while the other allows an OEM to accomplish both initiatives without compromising either. BOM Monitoring is not just a solution to obsolescence, it’s a solution for one of the most significant supply chain issues that held OEMs back. Should an OEM invest in a new platform or new employees to handle obsolescence management? With BOM Monitoring, why not have both?