17th December 2021
With the pace of technology innovation moving more swiftly than ever, electronic components can quickly become outdated and thus surplus to requirements for the next generation of products. However, that doesn’t mean that they aren’t required to repair or replace existing products or cannot be used in other ways. Many industries, including manufacturing, require a constant supply of parts that may be considered obsolete in the wider market and can therefore be very difficult to reliably source. These parts may be absolutely critical to product functionality. A shortage or delay in sourcing them can bring production to a halt, slow down new product development, and cost the business a significant amount of lost revenue.
Often, the first time a buyer might hear about an electronic part becoming obsolete is when they receive a communication from the manufacturer.
If a component manufacturer issues an End of Life (EOL) notice on a specific part, it can cause instant pressure on the supply chain, as demand can take a big increase just as the part becomes less and less available, making it a serious and self-perpetuating problem.
Receiving a Last Time Buy (LTB) offer or notification in relation to a vital component can be a challenging experience for a buyer, as they need to estimate the quantity of the component that they’ll need for the future to ensure their final order is of sufficient volume to last the course until they can make alternative plans.
For the buyers in need of obsolete parts that have become scarce or are expected to in the near future, there are many different options available to them to help proactively manage obsolescence and protect their supply chain.
Making lifetime buy agreements
A lifetime buying agreement is a strategy that can be used by some buyers where they predict the life-cycle of the product that uses the specific component and make an agreement with the supplier based on that to forecast the quantity needed. However, the entire supply must be ordered when the agreement is made, which can be a significant cost for the buyer to outlay. There is also the risk that the forecast originally made could turn out to be incorrect and supply may run out.
Making the most of LTBs
As mentioned previously, LTBs are the last opportunity for buyers to order a significant quantity of a component from the company that makes it once they have been notified that it’s becoming obsolete and will be discontinued. Getting an order in as soon as possible after being notified can help ensure that the buyer secures the number of components they want before they become much harder to source. However, sometimes LTBs are issued to potential buyers with little warning and short deadlines, so being able to react quickly in this type of situation is essential if you want to make the most of LTBs.
Sourcing the Open Market
Going to the open market to try and source obsolete parts comes with a level of risk. There can be counterfeit components being sold or defective parts that can catch some buyers unaware, so purchasing only from certified and reputable distributors is essential.
At EP4, we have more than two decades of experience in sourcing current and obsolete technology OEM products globally and are IS09001 certified. We have high levels of locally-based stock, including many obsolete parts, which can fulfil a large percentage of orders, and a trusted worldwide supply chain to help source those especially rare components and get them to where they are needed as quickly as possible. We can source so many hard-to-find and obsolete parts and components because we are procurement specialists with access to a huge global market and the key relationships built over time to provide a first-class service in record time. When available, we can buy obsolete stock from companies that no longer require these electronic components and make them available to those that do to help lower supply chain costs and increase efficiency.
For more information on what we do or if you are looking for a specific obsolete electronic component, get in touch with our team.