Several major OEM companies are building communications equipment, or industrial systems that that have long product lifecycles, and therefore need to be supported for 10 years or more. Also, since some of these intelligent products or systems take years to build, some of the components become obsolete before the product even reaches the market.
These types of situations require not only the monitoring of EOL notices and PCNs, but these teams are having to make forecasted Last Time Buys for up to 10 years of inventory so they can continue supporting or servicing the products. Forecasting the exact quantity of inventory is near impossible which also leaves OEM and EMS companies with lots of excess obsolete materials at the end.
When you break this down, there are three major challenges here: staying ahead of obsolescence, spending working capital on making Last Time Buys, and ending up with lots of excess materials that take up space and leads to increased carrying costs. Companies like EDX exist to fill these gaps for OEM and EMS companies by managing the entire lifecycle of inventory to support production and service demands. EDX’s solutions help customers stay ahead of obsolescence while preserving working capital and reducing inventory carrying costs. EDX also provides custom fulfillment, best in business continuity planning and closes the loop with a proven exit strategy that maximizes ROI for excess and obsolete inventory.
Although we have seen the amount of EOL notices level off since the end of 2016, the number of notices will likely rise in the coming years as suppliers devote more capacity to high-demand, more profitable, newer parts. Are you and your team ready to take this on?
We would love to hear from you. What specifically has been your issue with obsolescence or last time buys?