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.

Obsolescence and End-of-Life

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 product a part goes into has been discontinued
• Customers are buying an alternative product that doesn't include the particular part
• Engineering want to use an improved version of the part that the vendor has introduced
• A design change means the part is no longer needed in the assembly

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.

5 Tips for Managing Obsolescence and End-of-Life

1. Implement obsolescence and end-of-life processes

2. Minimize inventory

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.

3. Implement FIFO organization

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.

4. Perform regular "slow mover" reviews

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.

5. Communicate

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.

A Leader in Ball Bearings and Assembly Solutions

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.

Certified to ISO 9001, IATF 16949 and ISO 14001, Hartford Technologies manufactures on two continents. Contact us to learn more.