Each year hundreds of thousands of electronic components, semiconductors and peripheral products transition to obsolescence.
Component Manufacturers have to make a difficult decision between obsoleting a low volume component and supporting their OEM customers.
In fact there’s a lifecycle mismatch between these types of commodities and OEM products. This mismatch may force OEMs to secure multiple years of Last Time Buy inventory to support both their production and long term service commitments.
Purchasing Last Time Buy inventory can cause OEMs to exceed inventory budgets and tie up their working capital.
Beyond the drain on working capital, there are the annual Inventory Carrying Costs that range between 15% to 25%.
Even after OEMs purchase this Last Time Buy inventory they still need to mitigate other risks including properly storing and handling these critical components over multiple years.
OEM and EMS companies can quickly exceed their inventory budgets and spend working capital to secure multiple years of Last Time Buy inventory to support production and service commitments.
Our Last Time Buy Solutions have proven to simplify this complex issue with a seamless process that benefits all parties involved.
EDX is the only supply chain partner that will purchase, own, warehouse and provide global custom fulfillment of Last Time Buy inventory for up to a ten year schedule.
Last time buys resulting from component obsolescence are one of the primary reasons OEMs find themselves requiring the purchase, warehousing, and long-term fulfillment of inventory, but they are not the only reason. The many benefits of our solution — including the preservation of working capital, savings on annual carrying costs, and industry-leading 10-year delivery schedules — can be applied to other common situations, as well. Below are just a few examples that illustrate how our OEM customers have taken advantage of this unique solution:
To stay ahead of price inflation, many OEMs opt to lock in today’s cost by making a bulk purchase of critical inventory upfront. Utilizing our solution for bulk purchases has also been proven to equip customers with the leverage required to negotiate significant discounts.
In some industries known for extended product life cycles, it is common for OEMs to offer customers regular onsite upgrade, repair, and maintenance services. To do so however, requires OEMs to purchase minimum bulk quantities of Field Repair Units for services that may not be rendered for several years. Our solution offers customers the means to budget the costs associated with these units, as well as a storage infrastructure capable of fulfilling them as needed.
ASICs, in addition to the IP protection they offer, are the least expensive way to store inventory. Many OEMs, however, lack the proper infrastructure to properly bank moisture-sensitive ASICs in die and wafer form. Located in our vault, which features industry-leading fire and ESD protection, EDX’s desiccant EDC SmartDry ™ cabinets intelligently maintain a relative humidity of 0.5%, making them ideal for long-term die and wafer banking.
Sometimes situations arise that prompt EMS providers to fulfill OEM orders in advance. If the OEM is not prepared to take these orders, the EMS provider will hold the inventory in their own facilities for an annual fee as high as 20% of the inventory’s value. EDX can purchase this inventory directly from the EMS provider while providing secure, climate-controlled storage that has proven to save OEMs 42% on annual inventory carrying costs.
Inventory Carrying Costs range between 15% and 25% annually. These costs include Capital costs, Service costs (insurance, handling, taxes) and Storage costs (warehousing, labor, administration)