Launch Your Next Mission - Part 6: Obsolescence

Introduction

If you haven’t already done so then I highly recommend you read the previous article on counterfeit parts before you read this one as it will help with the understanding of this article.
 
This is the final part of the 6 series articles to support your AS9100 and AS9120 understanding and implementation of the requirements and is probably the shortest and easiest to implement.
 
Over 70% of the electronic parts are obsolete before the first system is installed!

What is obsolescence?

Quite simply obsolescence means something becoming obsolete and not in existence any more. This can cause particular problems if you want to replace or service something very old which is no longer available through normal means.
 
Every product in existence will have a life cycle, the product lifecycle will be different for each product depending on the initial application plans and technology advancement, even software has a life cycle. You will notice that your mobile phones become obsolete and are not supported by the manufacturers any more, this will vary from manufacturer to manufacture but will typically be around 7 years.

Microsoft and Google will discontinue support for old versions of their software and some think this is just to drive new purchases. Well this might be some of the reasoning but it’s also to allow for continual advancement with new technologies.
 
There are many different reasons for products becoming obsolete and some are outside of the manufacturers control, a good example recently is the REACH legislation banning certain substances. If you used those substances within your products then you need to seek alternatives that will achieve the same product characteristics and the banned substance. This is easier said than done.

Lead in solder was banned a number of years ago but it was quickly identified that the properties of lead free and leaded solder act very differently and you get what’s called the tinning effect when using lead free solder.

In simple terms the lead free solder was causing short circuits when used in certain environments and the legislation was quickly changed to allow leaded solder to be used in high risk environments and products such as aerospace and medical.
 
You can also think wider than this as sectors as a whole go through a lifecycle, the automotive sector is a prime example as combustion engine powered vehicles are now hitting their peak and will start to decline as the electric vehicles being manufactured are introduced into the world.

I don’t know of any auto manufacturer who is not investing in EV and governments are driving the pace and introducing legislation to ban petrol and diesel vehicles in the near future.

But interestingly automobiles as a whole are hitting their peak even when you combine the different technologies, it is estimated that in 2029 vehicles sales globally will start their decent. In 2050 it is estimated that 70-80% of the global population will live in cities, if this is the case then most people will not require a vehicle at all, they will either use public transport or will hire a car for short periods when travelling longer distances.

Although obsolescence can be a problem it can also drive improvements. Whatever way you look at the situation organizations need to manage obsolescence even if you are not designing the products.

Why is obsolescence a problem?

The short answer is that obsolescence can drive counterfeit parts into the supply chain which is something we need to avoid as outlined in my previous article. Obsolescence is defined as the loss or impending loss of original manufacturers of items or suppliers of items or raw materials.

The military community refers to this problem as: Diminishing Manufacturing Sources and Material Shortages (DMSMS).
 
Below is a product lifecycle model and as products are phased out and start to become obsolete the risk of counterfeit increases if the market demand is still there.

Aerospace parts will have a very long product life cycle, some of the aircraft in existence today have been flying for over 50 years and although many of the components could have been swapped out, the manufacturers may not be producing components any more or they could have simply gone out of business.

There are reports that the F35 JSF aircraft had components become obsolete 12 times before it was even in production as things change so quickly. The B52 bomber was developed in 1955 and it is estimated that it will be in use until 2040 which is over 90 years.
 
If you need one of these old components and the lead time is 12 months from the OEM as they don’t normally manufacture these and will need to get a production cell in place, or authorized distributors do not have any stock then you start to look elsewhere as you can’t wait that long.

You start to move down the food chain from authorized distributors to just distributors, to brokers and then to anywhere you can find it including eBay. Often the documentation can be vague and the supplier is unknown but they have them in stock so you go any buy them. Often this is where counterfeit parts will then enter the supply chain.

What can you do to manage obsolescence?

As mentioned in the introduction, organizations think that it is design responsibility for parts obsolescence but this is not the case. Everyone has their part to play within their management system. How many times have you received a drawing for an item or material that is no longer commercially available? What did you do about it?

Contracts/Sales

Sales/Contract Teams are responsible and accountable for the safety, technical integrity, performance, and mission success of the program or project, while also meeting programmatic (cost and schedule) commitments. Sales/Contract Teams must ensure customer requirements are flowed and executed throughout the functions.

• Contract Definition - Ensure lifecycle planning is negotiated with the customer; ensure common understanding of customer requirements. Ensure all customer requirements are flowed to the affected functions. For Government programs, understand the customer's strategy on obsolescence management including funding, notifications, lead times.

• Cost and Schedule Planning - Budget appropriately to accommodate potential end of life/bridge buys and redesign; Allow for Schedule variation due to market conditions (e.g., material/components availability, lead time); Allocate budget for increased inspection and testing requirements as risk assessment deems necessary

• Integrated PMP Requirements and Plans - Develop and Implement Integrated parts management requirements and plans

• Integrated Counterfeit Control Plan - Integrate Counterfeit Control Plan with Program Plan

• Flow of Counterfeit Avoidance requirements - Assure applicable counterfeit avoidance requirements are contractually flowed down to suppliers

Engineering

Engineering has the role of specifying parts in the design process that are obtainable from integrity based sources. Where the engineering role is typically associated with developing a design that meets the customer’s needs, there are typically points where options exist.

• Design for Obsolescence - Look at component lifecycle relative to program/product lifecycle; Look for alternate parts

• DMSMS (Diminishing Manufacturing Sources and Material Shortages) Planning - Monitor source of supply - materials and manufacturers; Refresh DMSMS plan throughout Program lifecycle

• Monitor Bill of Material - for part and material lifecycles and GIDEP alerts for Counterfeit Parts

• Refresh Parts / Material Plan - Based on DMSMS Planning / BOM review, determine need for bridge buy (redesign or mod) / lifetime buys / end of life buys; Determine aftermarket supply

Purchasing and supplier management

Supplier Management and/or Procurement typically has the role of buying the specified parts at the best price that meets production schedules. Due consideration should be given to obtaining these parts from sources that help mitigate the risks associated with part integrity.

To ensure that this process is successful, source selection criteria should be established.

• Lifetime Buys - Coordinate with Engineering and customers to proactively support end of life buys

Supplier Quality

Supplier Quality has the role to ensure supply chain compliance and conformance of purchased products and services throughout the product life cycle.

This implies early involvement in programs to establish effective quality requirements and oversight plans as well as early engagement with suppliers to ensure a thorough understanding of requirements and capabilities.

• Make/Buy Strategy - Communicate supplier capability; Perform supplier capability assessment; Understand internal mfg. capability, risk and core competencies

• Risk Mitigation Plans - Establish necessary inspection and testing; Establish source inspection requirements

• Product verification (supplier responsible for test/inspection; source inspection, supplier delegated, receiving inspection) - Execute appropriate levels of inspection and testing to determine authenticity and conformance. Ensure use of approved test labs if required.

• Supplier Performance Metrics - Establish supplier/distributor metrics; process health metrics to allow for continuous improvement of counterfeit risk mitigation

AS9100 and AS9120 Obsolescence Management

Within the standard there are many clauses which refer to counterfeit parts in one way or another with the most prominent being:

• 8.1.4    Prevention of Counterfeit Parts

• 8.3.3    Design and Development Inputs

• 8.5.5    Post-Delivery Activities

• 8.5.6    Control of Changes

When asking organizations what they are doing about counterfeit part prevention they immediately answer with “we have trained our goods receiving department”, this is not sufficient or adequate. Clause 8.1.4 for example sets out some very clear guidelines on what types of controls you should be putting in place.

8.1.4 Prevention of Counterfeit Parts

Standard requirements:

“The organization shall plan, implement, and control processes, appropriate to the organization and the product, for the prevention of counterfeit or suspect counterfeit part use and their inclusion in product(s) delivered to the customer.
NOTE: Counterfeit part prevention processes should consider:
− application of a parts obsolescence monitoring program;

A Parts Obsolescence Monitoring Program is a process that will identify all of the components or products used within the organization which are acquired and highlight predicted obsolescence dates and current life cycles. 

It is also helpful to identify the suppliers themselves and what products you use the components or materials within, a health check can be performed on a regular basis against each of the products to determine the risks. As the risk increases you can implement additional controls or take the necessary action which may include going back to your customers or a redesign.

Considerations within your plan should be made against:

• Forecasting – predicting obsolescence risk or dates (frequency of obsolescence). Have you been issued notification of discontinuance or last-orders? A reduction in the number of sources, inventory levels or price increases can all be precursors to discontinuance of components.

• Mitigation – minimizing the impact of the problem after it occurs using a set of reactive firefighting approaches. Have you identified alternative or substitute parts? Are there aftermarket sources, can you negotiate with the manufacturer, do you need to lifetime buy?

• Planning – planning design refreshes based on forecasted obsolescence dates and technology insertion roadmaps in order to minimize life cycle costs

Depending on the nature of your business and the products purchased you can use simple systems such as excel to keep track of the products and materials or more extensive ranges may require some specialist software.

There are some specialist organizations in the market who have created complex algorithms for determining the risk of obsolescence. 

Risk of obsolescence calculation

One possible method is to use the below calculation (Source: SD-22):

Supply chain management index = 100 x (G+v1)/ (G=V1+v2+R+B)
G=multiple qualified suppliers, no problems on the horizon
V1=Single supplier and/or suspected problems but with a solution in place
V2-Single supplier and/or suspected problems with no solution in place
R=problem parts-no solution in place
B=unmanaged parts

Results Analysis:
90-100= supply chain management best practice
80-89= solid management program
70-79= Not determined unmanaged parts
55-69= need to engage with available sources
<54= no system in place

8.3.3 Design and Development Inputs

Standard Requirements:

“The organization shall determine the requirements essential for the specific types of products and services to be designed and developed. The organization shall consider:
f. when applicable, the potential consequences of obsolescence (e.g., materials, processes, components, equipment, products).”

Obviously your organization may not design but please do not skip this clause in terms of understanding it. If you manufacture then you should be aware of potential consequences of obsolescence. Many of you have received designs with components or materials that are no longer available, what do you do? 

You should never search the internet or contact a supplier and seek alternatives; you should always refer the issue back to the design authority who will need to make those determinations. If something is obsolete, but the onus back on your customers and design authority to come back to you with a suitable alternative.

If you are a design authority then you need to have a system in place for obsolescence management as per 8.1.4. Do not design products where the parts, materials or chemicals are likely to become obsolete before the end of the expected lifecycle of the product. This will drive counterfeiting or alternatives without correct authorization.

8.5.5 Post-Delivery Activities

Standard Requirements:

“The organization shall meet requirements for post-delivery activities associated with the products and services.
In determining the extent of post-delivery activities that are required, the organization shall consider:

i. product/customer support (e.g., queries, training, warranties, maintenance, replacement parts, resources, obsolescence). When problems are detected after delivery, the organization shall take appropriate action including investigation and reporting.”

Organizations need to support their customers with information on the lifecycle of products and components and keep them informed of planned discontinue dates. If your organization is planning on making a product obsolete what alternative arrangements have you put in place to support your customers through their own product lifecycles?

8.5.6 Control of Changes

Standard Requirements:

“The organization shall review and control changes for production or service provision, to the extent necessary to ensure continuing conformity with requirements.

Persons authorized to approve production or service provision changes shall be identified.
NOTE: Production or service provision changes can include the changes affecting processes, production equipment, tools, or software programs.

The organization shall retain documented information describing the results of the review of changes, the person(s) authorizing the change, and any necessary actions arising from the review.”

This is probably the main element of the standard which doesn’t specifically mention obsolescence but is where a lot of manufacturing only organizations can get caught out.

As mentioned earlier, you will often receive old drawings or specifications for products which simply do not exist anymore. A number of clients will simply search for an “alternative” and acquire those products/chemicals/materials without seeking authorization. I have had this issue many times and I am shown a website from the organization they purchased it from which states they are alternative products. This is not sufficient and will generate a major non-conformances.

Searching for alternatives and assuming they are suitable when you are not the design authorization is not permitted. These alternative products may need to go through testing but at a minimum they will need to go through some form of re-qualification by the design authority. 

The design authority would have determined the original products for a specific reason and also put them through a qualification program to validate their suitability. Just picking an “alternative” that has not necessarily gone through the same qualifications is a major cause for concern.

By all means, if you receive a drawing or specification which refers you to components, materials or chemicals which are not available you can search for alternatives. However, do not authorize the use of those alternatives, inform your customer who will then seek the formal approval of the design authorization for its use. Retain records of this authorization as we will be asking for it.