The IAM Annual Conference 2017

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www.cranfield.ac.uk
Obsolescence
Management
Dr. John A. Erkoyuncu
Deputy-Director of Through-life Engineering
Services Centre
E: j.a.erkoyuncu@cranfield.ac.uk
T: +44 (0) 1234 750111 x2747

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Agenda
• The obsolescence challenge
• Decision making for obsolescence
• Cost of obsolescence
• Managing the risk of obsolescence

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Background

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• Obsolescence is the state of being no longer needed because
something newer or more efficient has been invented. (Collins
Dictionary)
• As defined in DoD directive 4005.16, “obsolete” means that there is a,
“loss or impending loss of parts or suppliers of parts or raw materials.”
What is Obsolescence?
Obsolescence is the unavailability of parts, or services that were previously
available, they could have been withdrawn for many reasons: technical,
financial, legal and others

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Why do we have obsolescence?
• Technological progress -The innovation cycles, with which
components come on the market, become ever shorter and even faster.
• Component manufacturers re-assess their product offerings and trim
down many non-profitable lines.
• Changes in the standardization. Old standards are no longer
available and are no longer maintained.
• Legislation changes. E.g. concerning asbestos, cadmium and lead tin
solder (RoHS).
• The Original Manufacturer is no longer in business.
• The processes, tools and the knowledge for maintenance, update or
improvement of software are no longer available.

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Average Life of Electronic Components
•• Average lifecycles: electronic componentsAverage lifecycles: electronic components
– Linear/interfaces 8 years
– Logic families 6 years
– Displays 3 years
– Gate arrays 2 years
– Microprocessors 2 years
– Programmable logic devices 1 year
– Memory families 9 months
–– Overall averageOverall average 3.25 years3.25 years

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Aim of presentation
• This presentation will touch on three key areas:
• What capabilities are required to be able to manage obsolescence?
• How can the risks of obsolescence be managed?
• How can the cost of obsolescence be managed?
• The presentation will also highlight insights into future obsolescence
challenges.

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Obsolescence research: Timeline
• Resolution costing
• Electronics and
materials
FORCE
• Capability maturity
assessment
• Metrics
TOMCAT
• Risk assessment
process
• Risk classification
RISK
MANAGEMENT
• Resolution
costing
• Measuring
software
obsolescence risk
SOFTWARE
OBSOLESCENCE

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Types of obsolescence
People
MaterialsProcessesTools
Software
Documentation
Mechanical
Components
Skills Electronic
Components
Testing
Equipment

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• MoD is moving to availability / capability based contracts
• MoD needs to have confidence that the risk to availability and the
impact on cost from obsolescence, is being effectively managed.
• Measuring OM strategy performance / capability will provide this
confidence.
OM Capability Assessment

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• If we can measure OM capability:
• Be able to compare contractors / projects.
• Be able to report on the status of an OM strategy.
• Provide incentives for a contractor.
• Ensure the risk is placed in the right place.
• How can we do this consistently across Defence?
• TOMCAT
Total Obsolescence Management Capability Assessment Tool
OM Capability Assessment

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OM Capability Assessment
Obsolescence
Management
Dimensions
Obs. Resolution Process
Obsolescence Monitoring
Communication
Risk Assessment
Design for Obsolescence
Supplier
OM Governance
Total Obsolescence Management Capability Assessment Tool

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TOMCAT Assessment Report
5

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EEE-FORCE Framework

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Obsolescence Resolutions
Existing Stock
Last Time Buy
Reclamation (Cannibalisation)
Authorised Aftermarket
Alternate
Equivalent
Emulation
Redesign
FFF Replacement
Same Component
Minor Redesign
Major Redesign

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Components Complexity Levels

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OM Levels of Proactiveness
• Same as [3] plus:
• Technology Roadmapping
• Partnering agreements with suppliers
• Consider obsolescence at the design stage
5
• Same as [3] plus:
• Technology Roadmapping
• Either “Partnering agreements with suppliers” or “Consider obsolescence at the design
stage”
4
• Employ obsolescence managers
• Use obsolescence monitoring tools
• Notify obsolescence issues proactively
• Decide the key parts that should be managed proactively
3
• Reactive but making LTB to avoid/solve obsolescence issues2
• Deal with any obsolescence issue reactively
• Miss most of the LTB notifications
1
•Modularity
•Transparency
•Use of technology/components/materials
less likely to become obsolete
•Use multi-sourced components
PROACTIVEREACTIVE

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Obsolescence Resolution Profiles
It represents the probability of
using each obsolescence
resolution approach to solve an
obsolescence issue

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Obsolescence Cost Metrics
• Existing Stock
• Last Time Buy
• Reclamation (Cannibalisation)
• Equivalent
• Alternative
• Authorised Aftermarket
• Emulation
• Minor Redesign
• Major Redesign
Resolution
Approach
• Small
• Medium
• Large
• Very Large
Level of
Integration
• Space
• Air / Safety Critical
• Sea/Submersible
• Land-Mobile (military)
• Land-Fixed (consumer) Office - Industrial
Type of
Platform
• Yes
• No
Requalification
Required

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Obsolescence Cost Metrics calculation
Equivalent £3,500
Alternative £3,500
Authorised Aftermarket £4,500
Emulation £26,700
Minor Redesign £21,300
Major Redesign £100,000
Parameters
FACTOR 1 (A) is applied to estimate the resolution cost without requalification
FACTOR 1 (A)
Level of Integration
Small Medium Large Very Large
Existing Stock 1 1 1 1
LTB 1 1 1 1
Cannibalisation 1 1.47 2 2.65
Equivalent 1 1 1 1
Alternative 1 1 1 1
Authorised Aftermarket 1 1 1 1
Emulation 1 5.62 13.11 71.16
Minor Redesign 1 2.77 3.96 14
Major Redesign 1 2 4 50
FACTOR 2 (B) is applied to estimate the requalification cost
FACTOR 2 (B)
Level of Integration
Small Medium Large Very Large
Existing Stock 0 0 0 0
LTB 0 0 0 0
Cannibalisation 0 0 0 0
Equivalent 0 0 0 0
Alternative 1.86 1.86 3.34 5.14
Authorised Aftermarket 1.89 1.89 3.4 4.73
Emulation 0.95 1.62 5.19 29.62
Minor Redesign 1.35 5.09 7.48 11.78
Major Redesign 1.5 18 30 87.45
Cost=Q*A+Q*B*C*X
Cost=Base_Cost*Factor_1+Base_Cost*Factor_2*Factor_3*Factor_4
Base Non-Recurring Resolution Cost
Base Cost
(Q)
Existing Stock £300
LTB £2,000
Cannibalisation £1,700
Equivalent £3,500
Alternative £3,500
Authorised Aftermarket £4,500
Emulation £26,700
Minor Redesign £21,300
Major Redesign £100,000
Parameters
FACTOR 1 (A) is applied to estimate the resolution cost without requalification
FACTOR 1 (A)
Level of Integration
Small Medium Large Very Large
Existing Stock 1 1 1 1
LTB 1 1 1 1
Cannibalisation 1 1.47 2 2.65
Equivalent 1 1 1 1
Alternative 1 1 1 1
Authorised Aftermarket 1 1 1 1
Emulation 1 5.62 13.11 71.16
Minor Redesign 1 2.77 3.96 14
Major Redesign 1 2 4 50
Cost = Base_Cost ×Factor1 + Base_Cost ×Factor2 ×Factor3 ×Factor4
FACTOR 3 (C) is applied to take into account the type
of platform in the estimation of the requalification cost
Type of Platform
FACTOR 3
(C)
Space 1.3
Air / Safety Critical 1
Sea/Submersible 0.73
Land-Mobile (military) 0.53
Land-Fixed
(consumer) Office -
Industrial
0.3
FACTOR 4 (X) indicates whether requalification
testing is required or not
Requalification
Required
FACTOR 4
(X)
Yes 1
FACTOR 4 (X) indicates whether requalification
testing is required or not
Requalification
Required
FACTOR 4
(X)
Yes 1
No 0

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Existing challenges
• Awareness of obsolescence complexity level
• Awareness of cost metrics
• Awareness of obsolescence mitigation and resolution approaches
• Awareness of knock on effects of obsolescence
• Design for obsolescence at the early stages

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Obsolescence Risk Assessment
Process
Step 7: Review
Step 6: Risk Register Update
Step 5: Components Prioritisation and Mitigation Decisions
Step 4: Risk Analysis for each Component
Step 3: Extract and Filter Bill of Materials
Step 2: Resources Planning
Step 1: System Support Plan Assessment

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Obsolescence Risk Assessment Criteria
•PROBABILITY
• Number of manufacturers available
 Single  High
 Two  Medium
 More than two  Low
•Years to End of Life (YTEOL)
 Less than 2 years  High
 Between 2 and 5 years  Medium
 More than 5 years  Low
•Stock available vs. Consumption rate
 Low stock & High consumption rate  High [If low component cost and easy to store and
short lead time  Medium]
 Low stock & Low consumption rate OR High stock & High consumption rate  Medium
 High stock & Low consumption rate  Low

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Obsolescence Risk Assessment Criteria
• OPERATIONAL IMPACT CRITICALITY
• Operational Impact Criticality of the obsolescence issue on the
system’s functioning and performance. It represents the potential loss
of system’s availability or capability.
 Safety critical  High
 Mission critical  Medium / High
 None of the above  Low

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Obsolescence Risk Assessment

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Full Obsolescence Risk Analysis

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Risk Register

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Augmented Reality
Real object
Viewer
AR overlay
3D data

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Visualising Obsolescence Risk

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• Opportunities for cross-sector learning
• Growing pressure to extend the life cycle of equipment
• Obsolescence is becoming a key challenge to manage due to cost and
equipment performance impact
• Future interest needs to be put on effective proactive practices to
minimise the cost and equipment performance impact
Concluding remarks

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Thank you!
Any questions ???