Obsolescence Mitigation in Automotive Industry using Long Term Storage Feasibility Model

Abstract

The diminishing of material sources leads companies, especially industrial, to implement remedial actions to continue to serve their customers throughout the committed contractual period. Original Equipment Manufacturers face hard relations with car manufac¬turers and thousands of suppliers. The obsolescence and diminishing number of sources, specifically in electronic and IT devices, cause tough problems to OEM because of their dependency to the ever increasing number of these devices in modern cars. This is the reason why, in compliance with the IATF TS16949 standard, it is necessary to identify the costs, feasibility of implementation, as well as the success and risk chances of any obsolescence management plan. In practice, two solutions are regularly used: bridge stock and last time buy. However, the long term storage causes real management problems and cost difficulties when the supplier minimum order level is much greater than the product short term forecasts. From a technical, economical and risk assessment point of views, this paper looks at the feasibility study of long term storage based on the field situations in one of the main OEMs in the car industry. Based on a review of the literature, we identify the constraints related to the types of materials, their handling and storage conditions. By modeling the decision-makings for management of obsolescence and diminishing sources, we study the possible solutions and their consequences. The preventing actions are studied through a key matrix as a decision tool. A formal model is presented and a real automotive case is studied.