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Supply Chain: Obsolescence Management & The Impact on Reliability
Keywords: obsolesence , risk , reliability
The secondary market is often the supply chain of last recourse when electronic component product go obsolete or are under production constraints. While it is possible to get high-quality, genuine parts, it is also possible to get nonconforming, reworked, or counterfeit components. What is most frustrating is that it is increasingly difficult to differentiate genuine parts from their counterfeit equivalents. Historically, the secondary market provided a mechanism for finding parts in short supply or at reduced cost. Today, however, high-reliability system manufacturers are less willing to risk contamination of their supply chain with potentially substandard parts in order to save a few dollars in cost. The proliferation of counterfeit components has led to a contraction of the secondary market and an increase in the cost of parts in the marketplace. In some ways, counterfeit components that don't function are the least critical issue. While they represent a source of financial loss to the system manufacturer, their failure is at least identifiable during the system manufacturing process. Components that are substandard or reworked are actually much more difficult to manage. These parts may have been reclaimed from other systems. And, in some cases, they may include "scrapped" components that failed a manufacturer's testing or quality control programs. This group of components represents a significant risk because they while may function at the time of manufacture, they could fail in the field. In high-reliability systems, not only is the cost of a field failure significantly higher than the cost for commercial systems failure, but the failure may put lives at risk- the cost of which is incalculable. This paper will cover strategies that can be used to protect companies and products against the obsolescence risk. Topics include review of relevant industry standards, use of Managed Supply Programs (MSP) and Contract Pooled Options, plus long term storage recommendations and practices. A case study will also be presented.
Denise Lingenfelter, VP Business Developmet
Channel One International
Tampa, FL

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