Tuesday, 31 January 2012

Obsolescence Issues & How To Manage Your End-of-Life Electronic Component Inventory

In the late 2000's the world faced a Global Financial Crisis that caused a drop in demand for consumer electronic products as well as financial problems for manufacturers. The economic troubles led many original component manufacturers (OCM's) to issue end-of-life notices for many of the parts that they built. In the three months following the collapse of the Lehman Brothers bank, electronics manufacturers EOL notices increased by nearly 300%. 2009 was even worse with the number of EOL notices increasing by 1000%.

When the Restriction of Hazardous Substances (RoHS) legislation came into action in 2006 many OEM's were forced to change the materials used in their products. Older components that did not meet the new guidelines were no longer useful and so therefore became obsolete. Rory King, Director of global product marketing at IHS, stated, "Many OEM's are sitting there with entire bills of material with literally thousands of parts which they had no idea were subject to unforeseen EOL or other supply chain disruptions.” With RoHS 2.0 due to come into affect in 2014, this process is likely to repeat itself.

At present the life cycle of electronic components is shortening and component manufacturers are issuing last time buys (LTBs) more regularly. OEM's will therefore have to forecast and estimate what they will need before the part becomes obsolete.

Unfortunately there is no end in sight for obsolescence in the electronic components industry and even the most efficient OEM's will sometimes be left with excess stock for which they have no further use, however this does not necessarily mean that the stock is worthless although it may be costly to keep. By getting rid of your excess inventory you can save warehousing costs while at the same time can offer your business an instant cash injection.

It is a big world out there and there can quite often be someone looking for the parts you have in your inventory. If you have obsolete parts that are in demand you could recover even more from your inventory with consignment.

Trading Specialists are already the partner of choice for some of the worlds largest component and equipment manufacturers. We work with you to create a tailor made solution for your obsolete and excess stock, all backed up by our global distribution network.

To learn more about consignment or how to sell your electronic component inventory please follow the links.

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