Profitable alternative to component end of life exists, advises GDCA CEO Plotkin

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PHOENIX, 8 Feb. 2014. “Innovation is a double-edged sword: offering new product improvements, with diminishing support for aging products,” says Ethan Plotkin, CEO of GDCA Inc. in Livermore, Calif., which specializes in managing the obsolescence of commercial off-the-shelf (COTS) electronic components.

Virtually all technology providers have an end-of-life (EOL) policy for the board- and system-level components they offer, but these teams still deal with the everyday fall out of supporting products past their EOL, Plotkin says.

“Everybody agrees our EOL policy creates scrambles, but it’s hard to say no when a customer comes back for more support later,” Plotkin quotes an unnamed director of engineering. Obsolescence pushes everyone into an EOL corner, Plotkin says.

The typical product life cycle management (PLM) model is: introduction, growth, maturity, decline (reduced component availability), and end of life, Plotkin says. At the decline and EOL stages, lower-performing products make up a very small percentage of revenue share, but still require a high level of effort. “EOL is defensive and sacrifices lifetime profit,” he explains.  

“Obsolescence is like gravity; you can’t escape obsolescence. Obsolescence management is fundamentally flawed,” Plotkin explains, suggesting a proactive approach to component availability.

“EOL doesn’t work. EOL management is flawed. What do you do?” Plotkin questions. “A legacy sustainment strategy offers everyone more options and profit than EOL.” It’s about making a conscious choice and proactive plan, he says, “shifting from a defense strategy toward a strategy of managing the asset—these time-tested and sticky products. Then a customer doesn’t really have to go somewhere else. It’s a different reality and it’s better for everyone.”

Legacy sustainment enables companies to unlock profitable revenue and customer loyalty, Plotkin summarizes.  

Cockpit image and component image courtesy of Shutterstock.

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