Obsolescence – It’s All About Planning
Everything moves so fast in today’s society, so it is pretty easy to understand the importance of managing risks that may almost seem unmanageable. One of these areas includes understanding the management of those products which may soon become obsolete. It is hard for businesses to invest capital in such necessary items as hardware, software, tools, and equipment, knowing that they may need to be repaired or replaced very soon.
In fact, it gets even more difficult to manage future costs because it is hard to know when it will become very expensive to keep older products running. This is because product producers seem very quick to retire old versions in favour of new ones.
They may be motivated by the prospect of making more profit off of future sales of entire products, rather than the smaller profits they can make off of just supplying a few replacement parts. Stocking a lot of replacement parts for last year’s or last decade’s model might also be very expensive.
What is Obsolescence Management?
In order to understand this concept, it might be helpful to consider a simple example of how obsolescence can affect your company.
The products your company manufacturers, for example, might only need simple repairs. But these repairs might become difficult or expensive because the manufacturer no longer supplies the components. Simple replacement parts might be unavailable from the original supplier. You may be able to purchase similar items from a third-party, but they may not really be good quality.
In this case, you have to decide if you want to go to the trouble and expense of buying lower-quality components or simply discard your old product in favour of new models. But this might not be an expense that you had planned on, and this can cause problems.
What is Obsolescence Management for the Future?
In any case, you might be getting the idea that it is better to plan for these circumstances than to just wait for them to bite you later. When you are researching new products, equipment, appliances, or even software, you should take the time to predict how long it will really last you. That means you have to spend some time planning for obsolescence.
This is not, of course, entirely possible. It is hard to know when your suppliers will change their own strategies or come out with new versions and models. But you might ask the for assurances before you purchase. If you have any leverage, you might be able to get assurances that they will continue to support your purchases for a specified length of time. If not, it might be better to spend a little more upfront money with a supplier who can give you these upfront assurances. In conclusion, it should be obvious that you have to plan for the future of your company by trying to predict how your suppliers will react.
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