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When End-of-Life Really Isn’t the End

Whether your supplier calls it end-of-life (EOL) or product obsolescence, it means that same thing: The part you are using will no longer be manufactured by your vendor. Usually this means your supplier is moving on to a newer, better device. The problem is, you don't want that better device — your product is working just fine as it is.

A company that faces this EOL dilemma can always redesign its product around that new part, but that's not easy, particularly if a semiconductor is discontinued. On a typical circuit board, the parts chosen for a design were selected because they work well with a specific semiconductor. So a chip EOL doesn't just affect one part — it affects them all.

You can always try to find a second source for the discontinued device — that is, unless it's a custom or proprietary part. If it is… In the immortal words of Donnie Brasco , “fuhgettabahdit.” Your next option is to buy the unallocated inventory of the discontinued part or find someone that already has made an EOL buy.

{complink 3297|Maxim Integrated Products Inc.}, like many semiconductor makers, knows how EOL affects its customers. In particular, companies in the military/aerospace markets have a hard time with EOL, because the parts used in those industries have to go through an onerous qualification process. Product lifecycles for military/aerospace devices can be as long as 30 years — a typical commercial part's lifespan is 10 to 12 years. So Maxim has launched an obsolescence mitigation program for its military/aerospace customers.

Here's how the Maxim program works, according to the company's Website:

  1. Customer defines the remaining length of the program in years and the number of parts needed for the projected remaining life of program.
  2. Mil/Aero group calculates the number of wafers needed to support this requirement.
  3. Customer places order for first-year demand.
    • First-year demand is defined as the total life demand divided by the number of program years
    • Maxim builds the first-year demand
    • Maxim sets aside the remaining required wafers plus sufficient extra wafers to allow for possible program extension or increase in annual demand (note: parts are set aside after the first order)
  4. Set-aside wafers are held for a single customer only (no one else, even from the same firm, may have access).
  5. Minimum order quantity (MOQ) for any given buy is 500 pieces; the customer is not required to buy any parts after the initial purchase
  6. Customer may place an order for any quantity in years two through n (not held to the first year's quantity).
    • If the customer's program is canceled by their end customer, Maxim closes out storage and scraps the wafers at no extra charge to the customer

This procedure adopts many of the practices recommended by EBN contributor Joseph Bronson from e2v Aerospace & Defense. (See: How to End Military/Aero Supply Problems.) In particular, Bronson stresses the benefits of working directly with a components supplier versus an EOL buy. One of the advantages of a managed obsolescence program is the applicable devices will have current date-codes — EOL buys can have products sitting on warehouse shelves for years.

Maxim isn't limiting its program to military/aerospace parts. Users of certain commercial parts can participate as well.

10 comments on “When End-of-Life Really Isn’t the End

  1. Daniel
    August 9, 2011

    Barbara, it’s a common phenomenon in supply chain. Within 2-3 years of life cycle, most of the components are get modified to new look and shape with better features, which may not required by most of the end product/Assembling companies. In such cases, component manufacturing companies are forcing the end user either to modify the PCB or design circuit for accommodating the new component. This can make a drastic shift in entire life cycle of the end product too.

  2. Jay_Bond
    August 9, 2011

    This sounds like a great idea that many other suppliers to the government should look at adopting. Think about all the money that is wasted by the government when it comes to running into EOL's. The government is expecting to keep their equipment running twice as long as the typical manufacturing companies. When they run into EOL's, they now have to spend all this extra money on redesigns and possible new purchases. This extra money comes from their budget, which comes from our pockets. It would be nice to see others adopt this practice to help with government spending.

  3. Eldredge
    August 9, 2011

    You brought up one of the primary reasons that the military life cycle for components is so much longer than commercial components – the qualification testing. Given the severe environmental conditions that military electronics must face, not to mention the fact that often lives depend on the equipment functioning propewrly,the associated qualification testing is extensive, demanding, and provides a higher risk of failure than most commercial applications. Once a set of components has been proven to work, who would want to go back through that kind of testing again, and risk, along with the cost of additional testing, the possibility that the new components & equipment won't pass?

  4. patasy
    August 9, 2011

    Our company have been spending lots of time and money due to EOL. Not just on redesign but also re-applying all the safety certificates (UL, TUV etc) as we export our products to many countries. I know many OEM have contract manufacturers (CM) to build their complete products. Can we have these CM continue making these EOL products for some customers so we need not have to reapply for new certifications? Or is there other solutions other then the Maxim program or a huge LTB ? We manufacturer high end products (that are still in the marker for >25 years) and do not keep high inventory.

  5. Barbara Jorgensen
    August 9, 2011

    Patasy=–thanks for your first-hand observations. I've always imagined the qualification process is the most difficult one to resolve in the EOL equation.  I remember doing an article on the auto industry and how much it took to become a qualified vendor in that market. Mil/aero must be as or more difficult. The question of a “pass-through” qualification is a good one–I don't have the answer but it would make a good blog topic

  6. KPorter
    August 9, 2011

    Hi Patasy,

     

    Depending on the nature of your company's needs, or client's needs, there are other solutions. Maxim has their program, of course.  There are also small design houses that can help build around specific components that have been EOLed.

    Today many manufactures find themselves in a tough place between spending the resources keeping them competitive and  on the cutting-edge, and maintaining customer loyalty.. because not everyone needs (or wants) an upgrade.  This is especially important in long-term legacy systems like Mil/Aero, Medical Equipment, and Transportation.

    I don't know what industry you work with, so I don't have specific places to point you. In our sector we work with our partners, to help build a bridge between innovation, and their client's need for on-going support, longer than the original manufacturer is prepared to support. Because we work directly with the manufacturer when possible, it eliminates concerns about counterfeiting and re-certification.  When a design solution is necessary (because the equipment is so far in the grave, that we might not have access to the OEM) we help design a solution, and make sure it gets tested and certified for clients use.

    Maxim has a great solution for the clients who are prepared for Last-Time-Buy solutions, but LTBs often require an advance amount of funds, and an through idea on how long a system will need to be supported, including the other parts that may be EOLed and effect the pre-purchased lot.

  7. patasy
    August 9, 2011

    Hi KPorter,

    Our company manufacture high end loud speakers in California. Recently NMB Fans obsolete all the series we are using for our amplifiers (which need safety certifications) affecting many of our Speaker models.  I wrote to ask NMB asking if they will continue to make 2 fans for us (one size fan but 2 different speed) with EAU of 20K.  But they declined. I did a similar request to Alps and another OEM even that product has already EOL for a year, they re-opened the tool and made a last  batch for us. Can a CM continue making the same NMB fans legally?

  8. KPorter
    August 9, 2011

    Patasy,

    Good question.  Off the cuff, I'd say no, because my guess is that NMB would claim that they have patents, or IP on their brand fans.  If your company had someone design and test fans that were specific to your company, you could have a contract manufacturer tool your own line of fans — but that would still leave you with what ever test and certification processes you'd need to do on a new line.

    In our case, we've been around for almost 25 years, so we have over 3000 parts and systems we can support – most of which have long become “obsolete”. Our agreements tend to be very specific about what we can manufacture, and still fall within certification and non-counterfeiting standards.  For example, we just took on support and manufacture of the National Instruments VXIpc-872, but ONLY the VXIpc-872. We couldn't touch any of the other VXI lines.

    Of course, I'm talking embedded computer boards (in our case), there is a lot more IP and complexity than with tooling fans, so you might have an easier time finding a CM solution.

    If it is already too late for this specific line of fans. I'd assume that NMB would have something in their line would recommend “upgrading” to. To prevent future EOL issues, I'd recommend contacting a company like us. That way you could identify the life-cycle of your other critical parts and come up with either LTB solutions, or other preventative re-design support that still keeps things legal and doesn't require ongoing (expensive) re-certifications

    I hope this helps.

     

  9. Nemos
    August 10, 2011

    The lack in spare parts on the E.O.L products is a common problem that facing almost all the service departments.  This kind of problem affects the consumers who have a product a lot of years, and they don't want the new one's, either they have a reliable product in their hands and paid a high cost for it (like most of the military products).

     I believe that one solution may be to specify the EOL time of the product. For instance higher EOL time means also higher price for the product and with this way the customer is the person who will do the final decision about how many years his product will “live.”

  10. suha
    August 16, 2011

    Seeing this topic posted in the EBN newsletter caught my eyes, and I quicly click on the link to see if the industry have found a good solution for it.In the past I did a lot of search in the net to see if any company or standards or even papers available to tackle the component EOL issues and how are we going to sustain a product that may last for maybe 10 to 15 years down the road, and most obselence tackling programs are targetted for the military and aerospace industries. I'm glad that Maxim have the proposed process, which may also support other industries. My questions is, are the other component manufacturers will start following this step? Is there an industry forum held to tackle the EOL issues? EOL of passive components with no available part-sub or cross referance parts with same form-fit is as painful. Active components, mechanical parts to name a few, getting obselete in the market is resulting in extra headcounts allocated just to handle the sustaining activities which is occuring frequently. These activities are adding extra unneccessary cost as the engineers need to do validations, system verifications, bill of materials, DOE's in order to ensure that the new part is as equivalent to the older one. In some cases a PCB design change is even required. I understand that we are not able to halt the industry with old parts forever, but I suggest that an eco-system should be created to tackle this issue.

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