Hidden Cost of Obsolesence Revealed

Research conducted by ARINC and Qinetiq, the former research establishment at RAE Farnborough, has shown for the first time the actual costs that can be involved in the obsolescence of aviation components and parts. This can range from $573,000 for a major component redesign to $26,000 for sourcing a substitute item and $200 for acquiring an existing, stockpiled part.

The research was conducted specifically for the U.K. Ministry of Defence and was aimed at the avoidance of likely costs to British industry through effective obsolescence management. The prime observation made by the research report is that industry cannot afford to bury its head in the sand over the matter of component and part obsolescence and should identify problems early to avoid expensive solutions later.

The Component Obsolescence Group, the U.K. body established to highlight and deal with the issue, points out that this is the first time that such costs have been made clear, and that those noted are non-recurring engineering costs and do not include any other associated costs such as down-time of equipment, storage costs, and the costs of new training procedures and related manuals. The costs can, says COG, be applied across a range of industry sectors, ranging from military and commercial aircraft to transport signalling systems, automotive vehicles, and equipment in power plants. The matter of early obsolescence is becoming urgent in certain areas and is not being treated seriously enough by industry.

"Component obsolescence is likely to become more and more of a problem," said Michael Trenchard, chief executive of COG, "as demand for electronic and other components is increasingly fuelled by the consumer market rather than industry as it was in the past. Until the 1970s the vast majority of components were designed for long-lifespan equipment for the industrial market, but today this accounts for only some 15 percent of electronic component demand. According to Qinetiq, an average of 2,000 components become obsolete every month. "Where equipment costs millions of dollars and is intended to last decades, managing component obsolescence is essential to minimize unnecessary expenditure on maintenance."

The COG was established in the U.K. in 1997 as an industry-wide forum, and now has more than 160 members, including a German arm, which was established in 2004. -- By Roy Allen