Understanding Obsolescence
What it is and how you can transform it from a pain point to a superpower.
Here’s the dilemma: obsolescence is one of those things every manufacturing business encounters. But it’s not widely talked about.
So, here’s the thing: every manufacturer faces the issues associated with obsolescence. But not every manufacturer tackles them head on. Even though there is a really easy way to do that!
You work in a rapidly evolving landscape of manufacturing and industrial operations. And you’ll know how important it is to stay ahead of equipment and technology trends. The best, most efficient plant can be make or break for a business. And this is where the concept of planning for obsolescence becomes critical. It’s not just an advantage. It’s a necessity.
“Identifying the risk of obsolescence and taking proactive measures to address it can lead to significant cost savings. It not only helps in reducing maintenance and replacement costs but also optimises inventory management, capital expenditure, and supplier relationships. It also extends equipment lifecycle, improves competitive advantage, and enhances customer satisfaction, all of which contribute to improved financial performance and profitability.”
Joel Randoll
Understanding Obsolescence Reports
A Guide & Plan for Manufacturers and Industrial Businesses
So, what does obsolescence mean? And do you have an obsolescence plan? If you don’t, where do you start with that? And how can it all be a lot less complicated than it sounds??
Let’s take a deep dive into the world of obsolescence, highlighting the importance of an obsolescence plan, especially in safeguarding your operations against unexpected downtime and inefficiency.
Defining obsolescence in manufacturing and industry
As the world turns and becomes more sophisticated, so too does the technology. With that technical evolution comes more efficiency, increased production, more potential and even better margins. So, depending on the industry you’re in, renewing your plant can be business critical.
Plant and machinery manufacturers are driven by innovation. So, they’re continually investing in better. The downside to all this progress? Obsolescence: the process by which your machinery, equipment or technology becomes outdated, is no longer available or you can’t get replacement parts.
There are essentially two parts to obsolescence: manufactured and engineered.
Manufactured Obsolescence is driven by advancements in technology.
Engineered Obsolescence is the result of deliberate design choices, where manufacturers abandon production of old technology and force adoption of the new.
Understanding obsolescence is the first step in creating a strategic approach to manage and mitigate its impacts – and reap the benefits!
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The Benefits of Managing Obsolescence
As we’ve said, obsolescence is happening all around you anyway.
The choice to manage it proactively is up to you. Ignoring obsolescence can be costly while addressing it can offer a wealth of benefits.
And addressing obsolescence starts with knowledge – hence the vital importance of an obsolescence report!
Getting an obsolescence report and using it to shape strategic planning offers lots of benefits, including…
Reduced Maintenance Costs – proactively replacing machinery or equipment before it fails can avoid costly emergency repairs and downtime.
Efficient Inventory Management – when you know which components are at risk of becoming obsolete, you can manage inventory more efficiently. You can also reduce stockpiling of parts that are likely to become obsolete and focus on stocking parts that are in current or future demand.
Avoiding Expensive Workarounds – identifying the risk for obsolescence early on enables you to avoid having to resort to expensive, custom-made parts and instead explore cost-effective alternative solutions, such as using newer technologies or redesigning parts of the system.
Budget Planning – when you know and are addressing the obsolescence risks, you can avoid unexpected expenses and better plan capital expenditures.
Extended Equipment Lifecycle – managing obsolescence risks can actually help you to maximise equipment life and reduce the need for premature replacement. That also helps with spreading out depreciation costs and feeds into better financial performance.
Diverse Supplier Base – when you’re aware of your obsolescence risks, you can take the opportunity to diversify your supplier base for critical components. That can achieve two aims: it will reduce dependency on one supplier and give you increased negotiating power to secure better terms and pricing.
With the clearer visibility of future procurement needs that obsolescence planning can give, you can also make cost savings by negotiating volume discounts.
Enhanced Market Responsiveness – addressing obsolescence risks can help your business to be more agile and innovative, and so enhance your competitive advantage.
More Customer Satisfaction – Avoiding obsolescence-related issues, such as product failures or delays, helps in maintaining high levels of customer satisfaction. Satisfied customers are more likely to repeat purchases and recommend the business to others, leading to increased revenues and profitability.
Obsolescence Reports: What they are and why you need one
Obsolescence is a big word but one that has simple implications.
As industrial electrical experts, we produce obsolescence reports that identify in detail the components, parts or technologies that are at risk of becoming outdated or obsolete.
If you’re a manufacturer, engineer or procurement professional, an obsolescence report is an essential tool to managing the lifecycle of your plant and machinery, effectively and efficiently.
What’s in a Randoll Industrial obsolescence report?
Our team has considerable experience of compiling comprehensive obsolescence reports for industrial businesses in all kinds of industries and across the UK.
Because we take both a professional and a personal approach to compiling obsolescence reports, your report will contain all the details you need to inform and align with your business strategy going forward.
Because all of our customers are different, and work at various scale in a variety of industries, each report we prepare is bespoke to them. Yours will be too. However, these are a few of the boxes we set out to tick when preparing an obsolescence report for your business:
Identifying Obsolete Components
We’ll list in detail components or parts that are no longer being manufactured or supported by suppliers. This could be due to technological advancements, changes in regulations, or market demand shifts.
Impact Assessment
We’ll assess the impact of obsolescence on existing products, systems, or equipment. This includes evaluating potential risks such as increased maintenance costs, reduced availability of replacement parts, or system failures.
Replacement or Upgrade Recommendations
Based on the identified obsolete components, our report may recommend alternative components, parts, or technologies that can be used as replacements.
This could involve upgrading to newer versions, finding equivalent components, or redesigning parts of the system.
Supply Chain Risks
Obsolescence reports can also highlight potential risks in the supply chain, such as reliance on a single supplier for critical components or long lead times for replacement parts.
Cost Analysis
We can go into detail in terms of cost analysis, giving you a comparison between the cost of replacing or upgrading obsolete components with the cost of maintaining existing equipment.
This can be hugely helpful in making informed decisions about when and how to address obsolescence issues.
Lifecycle Planning
Obsolescence reports play a crucial role in lifecycle planning for products and equipment, helping you, your engineers or procurement professionals to plan for future investments, budget allocations, and technology refresh cycles.
Overall, obsolescence reports are a proactive way to manage the challenges associated with technological change and market dynamics in industrial electrical manufacturing.
By commissioning an obsolescence report from our team here at Randoll Industrial, you can get ahead of potential obsolescence issues, minimise risks, optimise costs, and ensure the continuity and reliability of your operations.
While you’re here! Find out if you need a commercial EICR – Electrical Installation Condition Report – and how we can cost that for you.
