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06 February 2017

Avoid the perils of obsolescence and excess inventories with Cyclops

Last year, a study conducted for the Germany Environment Agency founded that consumer behaviour was becoming increasingly responsible for the obsolescence of certain electronic products. Using televisions as an example, the paper pointed out that 60% of purchases were made because of a desire to upgrade, rather than a need to replace.

A similar report, undertaken earlier this year, found similar results and surmised that far too many appliances were being replaced despite being in good working order.

This buying behaviour is becoming increasingly prevalent in certain areas, with the smartphone and tablet sector perhaps the best example of how users are continuously on the lookout to purchase newer models.

A result of this behaviour is that production lines now have a small lifespan and a potentially volatile operating window, something that without pro-active management, can causes manufacturers all types of problems. What is in demand and relevant today might be superseded by a competitor tomorrow and suddenly, purchasing models become redundant overnight. The result is that devices and components, whilst still operational, can quickly become obsolete.

However, obsolescence is not just a by-product of consumer demand and OEM innovation: it is also a natural consequence of the rapid developments that we witness in the electronics industry. Thanks to advancements in science and technology, component manufacturers release new parts on a seemingly daily basis.

Although these breakthroughs must be applauded, this can be problematic for OEMs as the parts that they have incorporated into their products get phased out. The consequence of this life cycle is that demand outstrips supply.

Be on the front foot

It is important to tackle these problems head on. Many companies are working hard at protecting their supply chain against obsolescence, be it through the implementation of sophisticated algorithms or by adopting a just-in-time production strategy.

However, for all the strengths of these methodologies, they aren’t bulletproof.

Obsolescence is a problem that effects businesses of all shapes and sizes: Some of it is planned, some of it happens naturally, and some of it occurs when we least expect it. At times, it can be nothing more than a mild headache that causes a mild inconvenience; at others, it is a financially crippling issue that can affect the long-term financial viability of a company.

So, given that obsolescence can occur at both ends of the supply chain, how can you guard against this seemingly unavoidable issue?

Purchase with confidence

If you find that a component within your production schematics has become obsolete, then there are several avenues for you to explore.

The first is to redesign your product entirely. This would remove the reliance on a hard-to-find part but would bring about a substantial financial outlay.

Another option could see you source the part yourself. But given the fears surrounding counterfeit components, would this be a wise move?

A third solution (and by far the most sensible one) would be to work with an independent procurement specialist that can locate and secure stock of the obsolete part, whilst also being able to ensure its legitimacy.

Specialising in locating hard-to-find electronic components, Cyclops Electronics is one the leading independent stocking distributors in the industry. With 177,232 stocked line items, access to a further 14 million lines, and offices in eight different countries, Cyclops has an unparalleled supply network that can help shield your production lines from obsolescence and other related sourcing problems. And thanks to the company’s commitment to anti-counterfeiting and traceability, all parts sourced through the York-based firm come with a quality-assured 1 Year guarantee and are thoroughly inspected to confirm authenticity.

As well as being a leading distributor of components, Cyclops Electronics also offers manufacturers a variety of excess inventory services.

Recouping money from obsolete assets

When an entire production line becomes outdated, those leftover components often get stockpiled in a warehouse and become ever depreciating assets.

Due to the resources that excess stock consume, many companies begrudgingly opt to take a sharp financial hit to eradicate the problem. However, there is a better way to manage your obsolete inventories.

For the past twenty years, Cyclops’ excess specialists have been helping OEMs, CEMs and component manufacturers turn obsolete stock into cash. By being able to market active, passive and electromechanical parts to through the company’s internal supply network, Cyclops has built up relationships with a wide variety of businesses by protecting them against the financial dangers of obsolete stock.

Avoid Obsolescence with the help of Cyclops

At some point in time, the components that you require to manufacture your products will enter obsolescence and will become increasingly difficult to source. And at some point, when you alter your production strategies to incorporate new products or features, your stock will become heavier thanks to the presence of obsolete inventories. Although you cannot stop this from happening, you can minimise the impact that these events will have on your balance sheet.

With some careful planning and the aid of procurement and inventory experts, you should be able to save and, importantly, recoup money during the early stages of obsolescence.


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