OEMs choose a system on module (SOM) over “chip down” design for their devices to reduce the component management burden, save money and reduce time to market. And that’s just in the early stages of development.
Several advantages to the SOM-based build also emerge later in the product lifecycle, such as an easier-to-manage bill of materials (BOM) and decreased maintenance costs to keep in-field devices operational. But to fully realize these benefits, OEMs must plan for the later stages of the product lifecycle in collaboration with their SOM providers, well in advance of the product’s actual end of life (EOL). How does an OEM ensure they’re ready to close the loop on one product’s lifecycle while it likely prepares for the beginning of new products’ cycles? Here are 4 tips for working with both internal teams and supply chain partners to best handle the challenges of EOL and component obsolescence.
Demand Forecasting: Don’t Be Late. Collaborate!
OEMs that build their device around a SOM have a much smaller BOM to manage than those who build from scratch. This simplifies the job of the OEM’s buyers, but it also makes it easier to overlook sourcing issues when they pop up for the SOM-based connected product.
SOM suppliers send last-time-buy (LTB) notifications to customers as components for their SOMs become obsolete. With SOMs at times reaching 10 to 15-year lifecycles, OEMs may no longer be familiar with what the affected product is anymore. Someone in procurement has been buying it, the demand has been forecast, but they just don’t know anything else about it. Unfortunately, a buyer may receive a last-time buy (LTB) notice, realize they’ve already bought their stock for the year, and ignore the notice without asking anyone else around the company about the product or its needs and leaving product availability in doubt.
OEMs can avoid these issues – and the ensuing panic – by taking LTB notifications seriously and conducting their due diligence to ensure those internally responsible for mature product lines are informed. Product managers should have the opportunity to respond to LTBs in advance of their expiration date. And because larger OEMs may have multiple divisions using an affected SOM in multiple products, OEMs must assign management of the LTB process and determine what the impacts are to each group’s ongoing production.
Know How Your Suppliers Handle Last-Time Buys
OEMs should clearly define how they handle LTBs and OEMS must understand those terms when selecting an OEM to provide SOMs. Elements such as the standard length of time their SOMs stay active, how much of a window of opportunity to they typically try to give their customers in an LTB situation, and how much time do they give customers to get their orders in should all factor into the purchase decision. Sometimes, extenuating circumstances lead to short LTB windows, but standard LTB conditions and guarantees are critical to working with any serious SOM supplier.
In most cases, by the time a SOM supplier sends out an EOL notice, the OEM is already well into the next-gen design process; they may just need a few more SOMs through the LTB to bridge the gap between old and new designs. But LTB decisions should be swift, especially if a new version of an existing SOM will be integrated into a current-gen product! It’s essential to understand the impact of the new SOM on the older product and take the time to test the first article before attempting to maintain full production.
Communicate with Channel Partners to Maintain Max Flexibility
The best SOM suppliers are always working to improve how they manage and communicate LTBs and EOL notices to their customers. This includes determining potential replacement parts—if they exist—and the impacts of integrating replacements for their OEM customers. It can also include sending out sample replacement parts and providing software patches as needed to help OEMs with integration.
Additional benefits and options make themselves available to the OEM that can maintain healthy communication and share specific detail on their needs with their SOM supplier partner. Full-service SOM suppliers like Beacon EmbeddedWorks keep close tabs on expected EOLs of every component within their SOMs. This allows them to game-plan with OEMs around upcoming EOLs that may affect part of the SOM that are crucial to the product’s operation; it also gives OEMs more time to adjust their existing production expectations and new product development timelines.
Open lines of communication can also lead to creative solutions to an OEM’s part problems. For example, an OEM might purchase large quantities of a SOM that has a component go EOL. But the OEM might not use that part of the SOM within their design. A flexible SOM provider may propose building a custom part for that OEM that de-populates that component. This kind of project can also offer the additional benefit of a lower BOM cost and reduced concern over availability since the non-essential component has been restricted.
Let Next-Gen Partners in on Your Product Roadmap
The more open, upfront, and honest with a SOM supplier OEMs are about their product roadmap, the more guidance they can receive for their optimal SOM solution. This give and take of information and knowledge is critical – when a SOM supplier knows that Product A is tailing off, but the OEM is already working on Product B, then the supplier can participate in the development process, recommend alternatives, and give the OEM a sense of how their SOM could best be incorporated into the new product. Not all SOM suppliers can provide this guidance, but those with in-house engineering and technical support resources can.
The right SOM supplier can provide similar benefits to support upcoming forecasts—provided they’re allowed a peek at what the OEM is planning. This support comes both from a supply chain perspective—the supplier can ensure they’ll have enough components available through their supply chain to fit the OEMs ordering needs—and from a design perspective, as the SOM supplier can prepare designs and re-designs for re-spins of the current-gen product when appropriate.
When it comes to new connected product development, the decision to build around a SOM instead of building chip-down can be motivated by a range of benefits, like meeting increasingly aggressive development timelines to developing in a manner that cuts down in-field maintenance costs. When considering your company’s product roadmap, don’t forget that another option involves leaning on a relationship with an established SOM provider like Beacon EmbeddedWorks to make sure your company can realize the best of both worlds.