A case study in what can go wrong
Obsolescence is a critical issue in PCB manufacturers and their customers, and can be an expensive problem to deal with if not dealt with on time, or even better, ahead of time before the real issues begin. As a legacy equipment manufacturer–a manufacturer of obsolete and discontinued circuit boards–we know this better than anyone. We have worked with many different projects and OEMs over the past 35 years, and we have seen and navigated the many challenges that our customers and OEMs face. This case study involving an OEM’s aerospace-related embedded board shows just how quickly obsolescence issues can escalate–and how GDCA rebuilt a new source of supply for the customer despite the many challenges involved.
We were contacted by the customer because the OEM of their circuit card was planning to leave the PCB business. This card played a critical role in the customer’s aerospace program and they needed it for another five years. Once the OEM discontinued the circuit card, the program began discussing licensing the technical data from the OEM. After two years of work, the OEM and the program had rough agreement in place; however, the program recognized that access to the technical data was only a small portion of the work required to build a New Source of Supply, so they engaged GDCA.
They involved GDCA, and we came up with a solution in two months, collaborating both with the OEM and the customer. The plan was for the OEM’s engineers to build new test equipment for our use and the OEM had collected and stored all of the necessary data GDCA required to build a new source of supply. Everything was lined up between GDCA and the OEM for a smooth transition. When GDCA delivered its plan for the solution, we also included all the risks we saw in the project so our customer could make a knowledgeable decision. All the individual risk we discuss can be chalked up to: GDCA has defined a solution right now, but the issues we are solving are caused by time, so the longer we wait to fund and implement the solution, the more the project can change and impact the cost, lead-time, and complexity of the project.
While GDCA did have the entire proposal prepared quickly with funding planned, the customer’s funding was tied up with a much larger contract that required approval from Congress, as this was a Defense-related project. Congress took over two years to complete this contract, and the customer took an additional year to decide to put the funding towards the project.
During this time, several things happened that GDCA warned might occur and actively tried to prevent:.
The supply chain that supported the board, which had already been dissolving, broke down rapidly over those few years. More and more critical components of the circuit board became obsolete and unavailable, especially as their manufacturers turned to focus on new products or their businesses were acquired by other OEMs. While this is a common issues GDCA solves, the more the supply chain deteriorates, the more expensive the components resolutions become.
Then, the OEM left the PCB business and shut down their facility related to it, and the engineers who had worked on the test equipment were laid off. This resulted in much of the necessary infrastructure needed to rebuild the test capability and smoothly transition the products to be lost. With the shutdown of the facility, all of the data and the test equipment were essentially–and literally–thrown away, which meant that GDCA had to build an entirely new test solution to ensure the validity of the boards, a process that typically adds at least six months to the initial lead time of the project. And without the technical expertise of the OEM’s lead engineers, there was no longer any aid in finding the data and rebuilding that test capability.
Because of this, and the lack of funding, the agreement for GDCA to take on responsibility for the product was in jeopardy–as time went on, building a new source of supply for the board was becoming more and more difficult. With all of the key points of the initial contract at the OEM gone, our team had to rebuild the deal five different times, as the project kept getting transferred to new people.
The result? The lead time for the project doubled, the cost had gone up over 40%, and GDCA had to build an entirely new circuit card for the test equipment and redevelop the testing capability, adding even more to the lead time, cost, and risk of the project. The success rate on being able to repair these issues had declined as well, since the supply chain had deteriorated even further and GDCA had no funding to secure the obsolete components or enact their time-sensitive solutions necessary to the project.
GDCA warned the customer that all of these things would happen, and nearly everything that we informed them might happen did occur in those few years.
After all, for us, these are standard issues that we deal with in nearly every project, and these are the consequences that we’ve seen time and time again when our customers take too long to move from building the solution to actually enacting it.
Throughout all of this, GDCA was not complacent. Our sales team worked hard to keep the contract for the project alive through five different points of contact with the customer, guiding the customer through the process and offering hundreds of hours of support in project management. They served as a point of contact for the customer, answering all questions and concerns and transparently explaining each part of the process along the way.
We also went out and found the two lead engineers on the project and entered into a contract with them. After all, having worked directly on developing the PCB and on rebuilding the testing equipment, they were our best resource. They also knew how to find the data we needed from the OEM, and agreed to go there to pull the files we needed, not just for the customer’s circuit board, but also for building new testing capability.
Due to the compressed time frame, with the OEM shutting their PCB facility down and the critical function of the board, GDCA proceeded to complete all of this work while still working out the contract with the customer. We extended over a quarter of a million dollars with an undefinitized contract in order to obtain the components we needed, contract the engineers, and start building the product, which the customer did eventually fund.
Many of these risks–the increased costs and lead times, the dissolution of the supply chain–could have been avoided had the customer acted sooner. This is why GDCA tells all of our customers upfront, so that we can avoid more of these issues and mitigate the rest, resulting in a successful and simpler solution. Too many times, we have watched our customers wait too long to start the process towards sustainment for their critical systems, and come to us when it’s nearly too late. We don’t want to just be here when there seems to be no solution left–we’re here from the start, so that you can avoid these risks altogether.