Strategies to the Prediction, Mitigation and Management of Product Obsolescence

1.6 OCCURRENCE OF OBSOLESCENCE

In order to develop an effective plan to combat part or component obsolescence, understanding the nature of the problem is critical. It is essential to understand how obsolescence can occur and the types of obsolescence that exist.

1.6.1 Technological Evolution

A new generation of technology effectively makes its predecessor obsolete. An example of this would be faster microprocessors making slower ones obsolete. Typically, the new generation technology has improved performance and functionality, often at a lower cost than its predecessors.

1.6.2 Technological Revolutions

In a technological revolution, a new technology supersedes (displaces) its predecessor. An example of this is the fiber distributed data interface (FDDI) that is becoming obsolete as the market moves toward adopting fiber channel as the communications technology of choice.

More common examples are the CD-ROM, which has greater storage capacity and speed than the floppy disk, DVD/Blu-Ray discs that have better quality and more multimedia functions than VHS, and the telephone, which enabled audio transmission instead of the coded electrical signals of a telegraph (ComputerInfoWeb, 2010).

1.6.3 Market Forces

Obsolescence due to market forces occurs when the demand for a component or technology falls, and the manufacturer considers it uneconomical to continue production. This is an increasing problem, as low-volume markets no longer have the purchasing power necessary to persuade manufacturers ...