Every electronic component has a finite lifecycle and will eventually become obsolete. For businesses dependent on automation and electronic systems, this reality presents both challenges and opportunities.
Machines break down, and the resulting downtime can cost businesses millions in lost revenue . What many plant managers and procurement teams don't realize is that on average, before becoming obsolete a Lenze product has a shelf life of between five and 20 years. Without proper tracking and management, these inevitable lifecycles can disrupt operations and impact your bottom line.
In our experience working with food production engineers, SME manufacturers, and company executives, effective lifecycle management is key to keeping operations running smoothly and reducing business costs . When we track asset lifecycles properly, we get more use and longevity out of our assets . Furthermore, strategic Bill of Materials (BOM) management helps reduce costs while identifying potential issues earlier in the product development cycle, preventing costly rework later .
Throughout this article, we'll explore practical strategies for component lifecycle management that will help secure your supply chain against obsolescence risks, reduce unexpected downtime, and optimize your procurement planning.
Understanding Component Lifecycle Stages in Supply Chains
Every component in your supply chain follows a predictable lifecycle that directly impacts your maintenance costs and operational reliability. Understanding these stages is crucial for preventing unexpected downtime and ensuring business continuity.
Active, Classic, Limited, and Obsolete Definitions
The component lifecycle typically follows four distinct phases based on industry standards and manufacturer models:
Active Phase: This initial stage begins when a product is first released to market. During this period, components receive full support including , design enhancements, and comprehensive service options spare parts availability. Manufacturers actively market these products for new installations and projects.
Classic Phase: Components enter this stage when volume production ceases, though they remain fully supported. ABB and other manufacturers guarantee spare part availability and complete lifecycle services during this phase. This stage typically includes a "Last Buy" notification period giving customers at least 12 months to place final orders before manufacturing ends.
Limited Phase: Support becomes restricted during this phase. Spare parts remain available only "as long as components and materials can be obtained" . Services gradually become obsolete, and maintenance increasingly relies on reconditioned parts . The combined Classic and Limited support typically provide de around 10 years of support from the point when the product is first classified as Classic.
Obsolete Phase: The final stage occurs when manufacturers can no longer support the product technically or when support becomes commercially unfeasible. At this point, companies must transition to newer technologies.
Impact of Lifecycle Stages on Procurement Planning
Lifecycle stages significantly influence procurement strategies. During the Active phase, responsive suppliers who handle rapid engineering changes are essential. As products enter the Growth phase, suppliers who focus on operational excellence become crucial.
Consequently, the Maturity and Decline phases present unique challenges - production quantities decrease, materials become harder to source, and costs typically increase due to lower volumes and special orders.
Manufacturer Lifecycle Models: Siemens, ABB, Omron
Major automation manufacturers maintain specific lifecycle models. ABB follows the four-phase approach described above, with clear definitions for support levels at each stage. Similarly, Omron identifies distinct lifecycle phases: Active, Discontinuation, Discontinued and Obsolete.
Understanding these manufacturer-specific models allows procurement teams to see exactly what lifecycle stages automation equipment is going through at any given time. Moreover, regular updates on component status enable strategic inventory management and help avoid costly emergency sourcing of hard-to-find parts.
Risks of Ignoring Lifecycle Data in Sourcing Decisions
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Neglecting component lifecycle data exposes manufacturing operations to substantial financial and operational vulnerabilities. In fact, have encountered component or system obsolescence issues within just the last year 88% of manufacturers[5], with one in four companies facing these challenges every quarter.
Unexpected Obsolescence and Emergency Sourcing
Without lifecycle tracking, plants face abrupt supply disruptions that trigger costly crisis responses. In 2023 alone, approximately 111,150 components were discontinued without prior Product Change Notification (PCN), affecting roughly one in three product designs. When a critical component suddenly becomes unavailable, emergency sourcing often requires paying premium prices under tight deadlines Unlike planned procurement, these urgent purchases typically include unfavorable terms such as Non-Cancellable Non-Returnable (NCNR) conditions, and inflated minimum order quantities as suppliers prefer not to store small quantities.
Redesign Costs Due to NRND Components
Overlooking Not Recommended for New Design (NRND) status indicators can lead to massive financial consequences. If NRND or End-of-Life (EOL) components are inadvertently selected, businesses may face losses exceeding $250,000 per redesign, particularly for complex products. These expenses stem from developing new prototypes, updating certifications, engineering hours, and extended time-to-market. Additionally, software dependencies often compound the problem—requiring comprehensive reprogramming beyond just hardware replacements.
Downtime Risks from Unsupported Legacy Equipment
Aging manufacturing equipment reliant on obsolete components creates significant operational vulnerabilities. Legacy systems typically experience server failure rates increasing by approximately 30% for each year beyond the optimal replacement cycle. This declining reliability causes unplanned downtime, decreases throughput, and negatively impacts on-time delivery metrics. Furthermore, maintenance costs for hardware systems more than five years old can be 3-4 times higher than current-generation systems, with employees using outdated workstations losing an average of 48 productive hours annually due to performance issues.
Hence, effective lifecycle management isn't merely about component tracking—it's about protecting your operation's continuity, budget predictability, and competitive position.
Smart Tools for Lifecycle Tracking and Forecasting
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Modern component lifecycle management requires specialized tools that automate tracking, forecasting, and decision-making. These solutions provide procurement teams and engineers with the visibility needed to avoid costly obsolescence problems.
Using Octopart for Real-Time Lifecycle Data
Octopart delivers current lifecycle status for from authoritative sources over 650,000 electronic components. For procurement teams seeking reliable data, this platform prioritizes manufacturer lifecycle information over third-party sources. The system aggregates data from 679 distributors and 11,130 manufacturers, updating stock, pricing, lifecycle status, and lead times daily across 95+ million parts.
First and foremost, Octopart's 12-month stock history graphs reveal supply volatility patterns, helping plant managers identify risks before they impact production. Users can instantly filter search results by lifecycle status (Active, Not Recommended for New Designs, Obsolete), ensuring new designs avoid soon-to-be-unavailable components.
BOM Management with Duro PLM
Duro's cloud-native Product Lifecycle Management platform eliminates most manual data entry through automated BOM management. Given these points, engineering teams benefit from CAD tool integrations that automatically synchronize component data without tedious copy-paste operations.
In addition to tracking revisions, Duro connects to part distributors, providing real-time pricing, lead times, and availability information crucial for procurement decisions. This visibility helps food production engineers and SME manufacturers make economical component selections early in the design process.
Asset Lifecycle Visibility with itemit
Itemit offers complete asset lifecycle tracking through multiple tagging options including RFID, QR codes and barcodes. Subsequently, this cloud-based system provides location data, usage history, maintenance records, and compliance documentation from a unified platform.
For plant managers, scheduled maintenance reminders can be configured monthly, quarterly, or annually, ensuring equipment uptime while extending asset longevity.
CAD Integration for Lifecycle-Aware Design
Remarkably, CAD-integrated lifecycle assessment tools now enable engineers to make informed decisions during initial design stages. These systems utilize feature technology to process product models and generate lifecycle data, supporting eco-design objectives. Indeed, this integration helps engineering teams identify potential issues earlier, preventing costly rework later.
Strategies to Secure Your Supply Chain with Lifecycle Insights
Image Source: Sprintzeal.com
Plant managers and procurement teams can implement several proven tactics to shield operations from lifecycle-related disruptions. Based on industry best practices, these strategies can dramatically reduce obsolescence risks while maintaining operational efficiency.
Proactive Sourcing Based on EOL Notices
Proactive obsolescence management demands looking beyond manufacturer notifications. According to industry data, come with "immediate" last-time-buy dates 28% of product change notices, making reactive approaches increasingly risky. Rather than depending solely on vendor alerts, manufacturing companies should categorize components based on obsolescence risk and calculate risk profiles considering both probability and operational impact. Furthermore, implementing regular forecasting for critical components enables strategic last-time purchases well before official EOL announcements.
Inventory Buffering for High-Risk Components
Strategic buffer inventory serves as a crucial defense against component obsolescence. This approach involves:
· Calculating optimal buffer stock using the formula: daily usage × average lead time
· Implementing selective buffering focused primarily on critical components rather than entire inventory
· Adopting a hybrid approach that balances Just-In-Time efficiency with Just-In-Case protection for high-risk parts
For SME manufacturers, this targeted buffering optimizes capital allocation while protecting against supply chain vulnerabilities. Nonetheless, buffering should align with supplier capabilities and actual supply constraints.
Supplier Collaboration for Lifecycle Transparency
Establishing transparent relationships with suppliers creates significant value beyond price negotiations. Organizations that regularly collaborate with suppliers demonstrate higher growth, lower operating costs, and greater profitability than industry peers. Effective collaboration includes developing shared visibility into component lifecycles, establishing trust through transparent cost models, and creating value-sharing mechanisms. A prominent example is ASML, which provides suppliers with healthy margins as volatility buffers and offers staggered purchase guarantees.
Lifecycle-Aware Component Selection in New Designs
When engineers select components for new designs, lifecycle stage should factor alongside cost and functionality requirements. Choosing parts in growth or maturity stages buys precious time before redesigns become necessary. Additionally, establishing cross-references meeting form-fit-function requirements should become an iterative process incorporated directly into product development. This preventive approach, coupled with multi-sourcing strategies that identify alternate manufacturers, provides procurement teams greater flexibility as components approach obsolescence.
Conclusion
Component lifecycle management represents a critical foundation for operational resilience rather than merely a procurement function. Throughout this article, we've explored how understanding lifecycle stages from Active to Obsolete directly impacts your maintenance costs, downtime risks, and overall business continuity.
Proper lifecycle tracking delivers tangible benefits across manufacturing operations. Companies that implement strategic lifecycle management typically see a 15-20% reduction in emergency sourcing costs and significantly lower redesign expenses. Additionally, organizations gain extended equipment lifespan, minimized unplanned downtime, and better capital allocation through smarter inventory decisions.
The risks of neglecting this crucial aspect remain substantial. Untracked components eventually become obsolete, triggering costly emergency responses that impact both budgets and production schedules. Therefore, proactive approaches using tools like Octopart, Duro PLM, and itemit provide the visibility needed to stay ahead of these challenges.
For plant managers and procurement teams, the pathway forward involves four key strategies: proactive sourcing based on EOL notices, selective inventory buffering for high-risk components, transparent supplier collaboration, and lifecycle-aware component selection during design phases. Although implementation requires initial investment, the long-term benefits far outweigh these costs through reduced disruptions and optimized operations.
We recommend beginning with a comprehensive audit of your current component inventory, identifying the lifecycle status of critical items first. Subsequently, develop a prioritized action plan addressing the highest-risk components through appropriate buffering, alternative sourcing, or planned upgrades.
Above all, effective component lifecycle management transforms unpredictable obsolescence events into manageable, planned transitions. This shift not only protects your operations but also creates competitive advantages through reduced costs, improved reliability, and greater supply chain resilience during uncertain times.
Key Takeaways
Understanding component lifecycle stages and implementing smart tracking strategies can prevent costly supply chain disruptions and reduce emergency sourcing expenses by 15-20%.
Track lifecycle stages proactively: Components progress through Active, Classic, Limited, and Obsolete phases - monitoring these prevents $250K+ redesign costs from unexpected obsolescence.
Use smart tools for real-time visibility: Platforms like Octopart, Duro PLM, and itemit provide automated lifecycle tracking across 650K+ components with daily updates.
Implement strategic inventory buffering: Calculate optimal buffer stock for high-risk components using daily usage, average lead time to avoid emergency sourcing premiums.
Collaborate with suppliers for transparency: Establish shared visibility into component lifecycles and develop trust-based relationships that reduce operating costs and increase profitability.
Design with lifecycle awareness: Select components in growth/maturity stages during new designs and establish cross-references to prevent costly rework later.
The bottom line: 88% of manufacturers face obsolescence issues annually, but proactive lifecycle management transforms unpredictable disruptions into manageable, planned transitions that protect operations and create competitive advantages.
FAQs
Q1. What are the main stages of a component's lifecycle in supply chains? The main stages of a component's lifecycle typically include Active (new product with full support), Classic (end of volume production but still supported), Limited (restricted support and spare parts), and Obsolete (no longer supported or commercially viable).
Q2. How can ignoring lifecycle data impact sourcing decisions? Ignoring lifecycle data can lead to unexpected obsolescence, emergency sourcing at premium prices, costly redesigns due to using Not Recommended for New Design (NRND) components, and increased downtime risks from unsupported legacy equipment.
Q3. What tools are available for tracking component lifecycles? Several tools are available for tracking component lifecycles, including Octopart for real-time lifecycle data, Duro PLM for BOM management, itemit for asset lifecycle visibility, and CAD-integrated tools for lifecycle-aware design.
Q4. How can companies proactively manage component obsolescence? Companies can proactively manage component obsolescence by implementing strategies such as proactive sourcing based on End-of-Life (EOL) notices, inventory buffering for high-risk components, collaborating with suppliers for lifecycle transparency, and selecting lifecycle-aware components in new designs.
Q5. What are the benefits of effective component lifecycle management? Effective component lifecycle management can lead to a 15-20% reduction in emergency sourcing costs, lower redesign expenses, extended equipment lifespan, minimized unplanned downtime, and better capital allocation through smarter inventory decisions. It also helps transform unpredictable obsolescence events into manageable, planned transitions.
References
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