Obsolescence Management of Electronics - A multiple case study based on the automotive industry

Abstract

Background
Lifecycles of electronics are decreasing, whereas companies with long life product such as the automotive and defence industry is increasing electrification in their products. Consequently, the mismatch in lifecycles between the electronics industry and Original Equipment Manufacturers (OEMs), with long life products, requires a solid obsolescence management process, to mitigate and resolve obsolescence cases of electronics. This master thesis focuses on Company X, who operates within the automotive industry, developing and producing heavy transportation solutions. Company X wants to improve their obsolescence management through obtaining best-practices from other industries with long life products.

Problem definition and purpose
Currently, the obsolescence management process at Company X is not performing as wished. In addition, the amount of electronics used in their products are increasing, which short life lengths further aggravates the situation improper obsolescence management causes. Therefore, the purpose of this project was to investigate how Company X can work proactively and reactively to mitigate the disruptive risks resulting from obsolescence of electronics, providing practices based on companies operating in similar industries.

Theoretical framework and methodology
The theoretical framework introduces three main areas: product lifecycle management, obsolescence of electronics (mitigation strategies and resolution approaches), and cross-functional collaboration. The intersection of the three fields is the obsolescence management process, which is included in the chapter as well through the several obsolescence management strategies. The method used to conduct this thesis was through an embedded multiple case study. In addition, data collection was conducted through interviews, documents, and observations. Subsequently, similarities and differences were analysed between the multiple cases focusing on their resolution approaches and mitigation strategies. The basis of the analysis was conducted by pattern matching the cases with the conceptual framework, where the areas Reasons for obsolescence, Outcome of obsolescence, Mitigation strategies, Resolution approaches, and Cross-functional collaboration were elaborated.



Result and conclusion
Company X can work proactively and reactively to mitigate the disruptive risks resulting from obsolescence of electronics through using appropriate resolution approaches and mitigation strategies. Based on companies operating in similar industries, which resolution approaches and mitigation strategies are suitable to implement for a general automotive company depends on contextual factors such as product complexity, remaining life length, and production volumes. The most commonly used resolution approaches mentioned were last time buy (LTB), substitution, and redesign. Furthermore, the most commonly used mitigation strategies were partnering agreements with suppliers, monitoring (databases and suppliers), choice of material/technology, and transparency. This research contributes by giving real-life context on how OEMs currently work cross-functionally with obsolescence management. Specifically with the focus on obsolescence of electronics.

Popular Abstract

Managing Obsolescence of Electronics in Long Lifecycle Industries: A Focus on the Automotive Industry

A multiple case study based on the automotive industry

By Lovis Åsberg for the Division of Engineering Logistics at The Faculty of Engineering – LTH, Lund University

The increased development speed of the
electronics industry, identified by
decreasing lifecycles, has created a
misalignment with industries like
automotive and defence, known for their
product portfolio of long-life products.
This discrepancy demands a solid
obsolescence management process to
address and resolve issues caused by
obsolescence of electronics cases in an
appropriate way. In response to this
challenge, the author proposes a high-
level obsolescence management process
tailored to the specific needs of
automotive OEMs.

The developed obsolescence management
process is specifically adapted to the
automotive OEM context, considering
factors such as product complexity,
remaining life length, and production
volumes. Three key determining factors of
in the obsolescence management process
are i) design and business risk, ii)
availability, and iii) complexity, which
together shape the holistic approach to
obsolescence management for electronics.

Mitigation strategies form the initial steps
in the proposed obsolescence management process.
Commonly used strategies in long-
life industries include partnering
agreements with suppliers, monitoring
material databases and suppliers
technological roadmaps, strategic choices
in material and technology, and implementing
transparency both internally
between functions, and externally with
suppliers.

Recognizing the predominantly reactive
nature of obsolescence management, the
paper emphasizes the importance of
incorporating an appropriate process of
choosing resolution approaches. In this
decision process the most commonly used
resolution approaches are last time buy
(LTB), substitution, and redesign.

This research contributes valuable insights
into how automotive OEMs navigate cross-
functional collaborations in the field of
obsolescence management, specifically
focusing on the challenges posed by
obsolescence of electronics. While the
developed obsolescence management
process is tailored to the automotive
industry, it provides a foundation that can
be adapted for application in other
industries by modifying it according to their
unique contextual factors and existing
obsolescence management processes. This
research entailed a multiple case study
approach, based on six companies which
are manufacturing and developing long-life
products.

This popular scientific article is derived
from the master thesis: Obsolescence
Management of Electronics – A multiple
case study based on the automotive
industry, written by Lovis Åsberg (2023).

• author: Åsberg, Lovis
• supervisor: Andreas Norrman
• organization: Engineering Logistics
• course: MTTM05 20232
• year: 2024
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Obsolescence management process, automotive, obsolescence of electronics, reactive obsolescence management, proactive obsolescence management
• report number: 6007
• language: English
• additional info: None
• id: 9147343
• date added to LUP: 2024-01-31 15:09:04
• date last changed: 2024-02-02 11:07:31