Avoiding Counterfeit Parts When Addressing Component Obsolescence

Transcription

1 Product Engineering Avoiding Counterfeit Parts When Addressing Component Obsolescence Philip DiVita, David Steele, John Kanavel DA-TECH Corporation Chrys Shea Shea Engineering Services DA-TECH Corporation Railroad Drive, Ivyland PA

2 Electronic Component Obsolescence SITUATION Original Component Manufacturer (OCM) rationalizes their product portfolio and obsoletes a key component in your product: You may get notified by OCM or your component distributor You may get an opportunity for a one-time final purchase OPTIONS Lifetime buy Alternate supply channels Alternate component manufacturers Different components Product redesign Which option is best for your product? CALM PANIC IMMEDIATE IMPLICATIONS Price increases (supply & demand) Lead times get longer Carrying WIP waiting for components Customer deliveries fall behind production schedule Cash flow delays from forecast Will incur additional expense with zero payback ALTERNATIVES

3 Effects of Component Obsolescence 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Which High-Rel Markets are Feeling the Most Pain from Component Obsolescence? Military & Avionic Medical Precision Controls %age of DA-TECH overall design work %age ofda-tech obsolescence mitigation work Each major market sector seems equally affected

4 Options Lifetime buy Alternate supply channels Alternate component manufacturers Different components Product redesign Key Questions provide the information needed to determine the best options

5 Lifetime Buy Guaranteed authentic OCM components No lost production time No price and lead time fluctuations Excess inventory may maintain value High inventory levels Carrying costs Storage: moisture, heat or ESD exposure and expense Shelf life and solderability Risk of other components going obsolete Forecast accuracy Typically don t buy enough Key Questions: What is the product s age? How many more years will it be produced? How many units are forecast?

6 Alternate Supply Channels Electronic Component Brokers Locate and stock hard-to-find parts Price according to market demand and fluctuation Come in as many different reliabilities as the components they sell RISKS of BROKERED COMPONENTS Pricing Market-based, often with high markup Counterfeit Components Cost to validate components authenticity OCM parts that are defective, damaged or used More difficult to validate or invalidate than simpler counterfeits More likely to slip into production and pass test Can cause field failures under working loads Key Question: How reliable are your brokers and their products?

7 Supply Channels

8 Alternate Component Manufacturer Different Component Manufacturers May manufacture similar parts May not plan to obsolete them May drop into existing product design with minimal modifications WHEN ADDING AN ALTERNATE TO BOM Qualify new component Get engineering approval for substitution Check component footprint Add new part number and inventory location to avoid traceability issues Update all documentation Update manufacturing, inspection and test processes Watch out for: Marginal parameters and electrical tolerance stackups Clock speed or input loading differences Alternate part revisions

9 Different Components Custom replacement module(s): Exactly mimic form, fit and function of original components Require zero changes to existing PCB design Utilizes multiple parts to achieve desired functionality WHEN DESIGNING CUSTOM REPLACEMENT MODULES Scrub BOM for any other parts at risk of obsolescence Verify the pin-out of current part Validate the new design Gain engineering approval for substitution Add to production and spares inventories Issue service update Key Questions: Is there enough time to design and qualify new module? Must it be compatible with legacy products? Can this approach be cost justified?

10 Replacement Module Example Obsolete Dallas Real Time Clock with extra features Custom replacement module has same function, footprint and pin-out as original Original component had internal battery that could not be charged or changed, shortening product shelf life (Lifetime buy would not work!) Design Improvements RoHS-compliant New component has accessible battery Built to order (no shelf life issue)

11 Product Redesign Diversion of resources from more profitable endeavors Learning curve Risk of functionality issues Time and cost overruns Project management requirements Creeping elegance Improved manufacturing efficiency Avoid future obsolescence of other components RoHS compliance Lower product costs using current technology Anticipated feature/benefit enhancements Key Questions: What is the product s age? How many more years will it be produced? Will redesign offer competitive advantages?

12 Product Redesign (cont d) Reduce BOM cost by updating the design: Blank PCB cost is based on area and layer count Current standard line widths of 4mil may reduce both Conversion of T/H to SMT may reduce both Newer, smaller SMT packages will reduce PCB area Newer, smaller SMT packages will reduce component cost Conversion of T/H to SMT will reduce manufacturing cost Potential to combine multiple boards into one WHEN REDESIGNING PRODUCTS Ensure exact form, fit and function whenever possible Avoid need for firmware or software updates Avoid changes to user inputs and outputs that require updates to users manuals Test backward compatibility in existing products Product Redesign Payback Period: If an electronic product design is more than 7 years old, the cost of redesign is usually recovered in BOM savings in less than 2 years.

13 Product Redesign Example (1) Viscometer Control Board Original design used T/H technology extensively BOM contained obsolete and near-obsolete components Design Improvements RoHS-compliant Much smaller PCB Lower cost of BOM Lower cost to build

14 Product Redesign Example (2) Embedded Process Control Boards Original design used T/H technology extensively BOM contained obsolete and near-obsolete components RoHS-compliant Combined 2 PCBs into one Less expensive components Design Improvements Fewer components Lower cost to build Added functionality

15 COST AND TIMING INCREASES Summary - Options Mitigation Strategy Considerations Lifetime Buy Reliable forecast Shelf life and appropriate storage Carrying costs Alternate Supply Channels Increasing markups Broker qualification Counterfeit avoidance and detection practices Alternate Manufacturer Vendor qualification Tolerance accumulations and incompatibilities Inspection and test process changes Alternate Component(s) Form, fit and function Need for custom design Verification and validation Redesign Product age and life span Engineering requirements and expertise Opportunity to increase functionality and reduce cost

16 Key Questions Obsolescence Mitigation Considerations: Total cost of implementation Risk to business and to brand Product quality and reliability To help determine the best obsolescence mitigation-counterfeit avoidance strategy, understand: What is the product s age? How many more years will it be produced? How many units are forecast? How reliable is the forecast? Are other components at risk of obsolescence, too? What is the decision time frame? Product Redesign Payback Period: If an electronic product design is more than 7 years old, the cost of redesign is usually recovered in BOM savings in less than 2 years.

17 Thank You Questions? Contact: Philip DiVita, DA-TECH Corporation Chrys Shea Shea Engineering Services Product Engineering Railroad Drive, Ivyland PA