The Radio Flyer wagon excepted, almost nothing stays in production forever. Eventually demand declines or Engineering introduces a new model and the old one dies. For the manufacturing organization, this end-of-product life creates some inventory management issues. A structured approach to managing obsolescence helps avoid these problems, saving time and money in the process.
A part or component that's obsolete is one that's not needed any more. It's surplus to requirements. This comes about either through reduced demand or an engineering change. For example:
The first two conditions listed above are largely outside the manufacturer's control and may leave obsolete inventory on the shelves. The last two are internal actions that require a decision about what to do with the current inventory: this is the end-of-life issue.
A third challenge relates to product shelf life. Some products deteriorate and cannot stay in inventory indefinitely. An assembly with rubber seals is an example. In this instance, if demand declines, shelf life may become a problem.
With fewer items on warehouse shelves, product life and the risk of obsolescence become smaller issues. Achieve this by adopting the lean manufacturing principle of matching production rate to demand.
Ensure materials and parts are used in the order in which they are received. This helps avoid problems with product shelf life. Flow-through racking is one good way to ensure first-in, first-out usage.
Most inventory management systems provide ABC or pareto analysis that supports tight control over the high velocity items. However, the long tail of slow movers is often overlooked, and this is where product shelf life and obsolescence issues hide. Incorporate a periodic "slow movers" report into procedures for managing the same.
Perhaps the best way of reducing obsolescence is to have good information on inventory and demand. Ensure that salespeople understand customer consumption/usage patterns, and feed this information back to manufacturing. Likewise, where product shelf life is becoming a concern, work with Sales to incentivize customers to take more.
As an established manufacturer and supplier of rolling element bearing products to a diverse set of industries, Hartford understands product end-of-life issues. Communication and planning ensure customers will never be surprised by product changes, while sophisticated inventory management prevents these issues internally.
Hartford Technologies, Inc.
1022 Elm Street - Rocky Hill, CT 06067
Tel: 860-571-3602 | Fax: 860-571-3604
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