The term obsolescence management strategy, while simple in theory (how OEMs adapt their supply chain when faced with critical electronic components approaching end-of-life), has a nearly infinite number of variations in the supply chain marketplace.
In one regard, this is understandable given how each industry — and each manufacturer within that industry — prioritizes different needs. A healthcare OEM concerned about fulfilling long-term service agreements for their ultrasound machines will have needs different than that of an OEM introducing an ASIC miner into the budding cryptocurrency industry, and supply chain partners across the world have carved out respectable niches providing one service or another.
When one sits down and counts the number of obsolescence management services available for OEMs to choose from, the results are staggering. BOM monitoring services allow OEMs to price lengthy bill of material and track critical component availability. Storage and fulfillment services allow OEMs an alternative to keeping stockpiled inventory on site at the expense of limited warehouse space. And, of course, there are plenty of services that offer to help OEMs arrange lot bids to sell off excess inventory for pennies on the dollar. If a manufacturer decides to incorporate these services into their supply chain, it’s not uncommon to have four, five, or even six supply chain partners working independently to help the customer fulfill one singular goal.
As any OEM is well aware, there is such a thing as too many cooks in the kitchen; the more variables that are incorporated into a supply chain, the greater risk the OEM takes on. If one partner does not come through or meet the expectations they initially set forth, the financial consequences can be severe for all parties involved.
Today’s OEMs realize that a successful obsolescence management strategy requires a commitment that affects all stages of a product’s life cycle, from design to production to end-of-life. Yet, despite this knowledge, there has been an industry-wide disconnect between the needs of OEMs and the limited services a single supply chain partner provides. A service that operates exclusively at a single place in the supply chain can be beneficial to a point, but it does little to mitigate all of the problems component obsolescence can cause. In other words, there are dozens of supply chain partners that offer elements of a successful obsolescence management strategy, but no one offers anything resembling the complete obsolescence management strategy OEMs truly need and desire.
After 26 years in the supply chain industry, EDX has filled that void.
Instead of adopting a business model that offers a simple service, we have chosen to treat component obsolescence like our OEM customers do — as an issue that affects all phases of a product’s life cycle
Our philosophy can be explained simply in this chart:
The four solutions we offer, two directly through EDX and two through our company affiliate Parstat, each directly correspond to a specific point in the life cycle of an OEM product, with each leading into the other to create a seamless, one-stop-shop experience for any manufacturer wishing to overcome not just one challenge related to obsolescence, but every challenge obsolescence could possibly bring to a supply chain.
These solutions individually all provide tremendous value, but their true potential is unlocked when used together. After Partstat’s BOM Monitoring Solution notifies you of a PCN issued on a transistor, for example, your assigned supply chain strategist can then immediately spearhead a last time buy where EDX will purchase all the required inventory on your behalf using our own capital. This leads into our ability to securely warehouse this inventory in our climate-controlled facilities in accordance to whatever specifications are necessary, as well as fulfill it anywhere in the world on a schedule personalized for the customer. Finally, should a portion of this inventory go unused at the end of the product’s life cycle,vPartstat will utilize its access to Big Data to give your excess the visibility needed on the open market to achieve maximum returns.
From beginning to end, EDX and Partstat are there, fulfilling the promise that other supply chain partners cannot. A single service, regardless of how good it is, does not constitute the entirety of what a successful obsolescence management strategy should do, just as a doctor would never claim that chemotherapy alone will cure your cancer. Obsolescence management is not a service, but a way of thinking — a big picture that can only come together if many pieces work together in sync. And, so far, we are the only supply chain partner that has managed to fit these pieces onto a single canvas for our customers.
In fact, you could go as far to say that EDX not only offers customers the premier obsolescence management solution — but the only true obsolescence management solution in existence. That’s something we are incredibly proud of, and we would love the opportunity to share it with you.
• BOM Monitoring Solutions, provided by our affiliate Partstat, use over 9 billion rows of current and historical data from over 2,000 suppliers provided by Partstat to monitor obsolescence, predict allocation, and, with the help of an assigned supply chain strategist, confirm component life cycles.
• Last Time Buy Solutions allow OEMs to secure up to 10 years of LTB Inventory without the loss of precious working capital, while saving them an average of 42 percent in annual carrying costs.
• Critical Inventory Storage Solutions guarantee long-term business continuity and secure warehousing for even the most sensitive electronic components — including raw die and wafer banking.
• Excess Inventory Solutions through Partstat function as full turn-key marketing strategies designed to maximize inventory returns, minimize the loss of working capital, and improve customer supply chain inefficiencies.