Managing Last Time Buy components
Yakovleva, Maria (2017)
Metropolia Ammattikorkeakoulu
2017
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201705117597
https://urn.fi/URN:NBN:fi:amk-201705117597
Tiivistelmä
Component obsolescence is a topic that became important because of the need for innovation and frequent technological changes. The significance of the topic varies across industries and types of products. Companies that are producing long-life high-cost industrial products are especially vulnerable to component discontinuation. Separate components of such products often have shorter life cycles. Lifecycle mismatch is leading to additional risks and costs. For this reason, companies need a well-organized End of Life (EOL) management of obsolescent components. Author’s own interest in the topic is driven by participation in the project related to EOL management at the case company.
The aim of the case company project was to create SCM EOL Concept. The thesis is based on the information from the Concept as well as interviews with company representatives, own observations of the author and literature review. The thesis is focused on EOL Last Time Buy (LTB) as one of the component obsolescence management strategies. The objectives of the research were to compare the difference between normal purchasing and EOL management in the case company as well as identify the reasons of EOL process inefficiency and additional risks. Another goal was to find the ways to minimize the risks and increase the efficiency of EOL process. One more aim of the project was to find out how to increase the financial performance of the case company and similar organizations through a better EOL management.
Many differences between the normal purchasing and EOL management were found during the research. These differences are mainly resulting from the uniqueness of EOL cases, unavailability of components and the low purchasing volume. The differences are leading to additional risks and are making EOL process less efficient than the normal purchasing process. Furthermore, EOL process is inevitable in technology related industries. Since it is not possible to completely avoid EOL management, EOL process shall be optimized in order to increase its efficiency and improve financial performance. In addition to process optimization, well-organized risk monitoring strategy can minimize EOL-specific risks. The results of the study are applicable to companies operating in similar industries.
The aim of the case company project was to create SCM EOL Concept. The thesis is based on the information from the Concept as well as interviews with company representatives, own observations of the author and literature review. The thesis is focused on EOL Last Time Buy (LTB) as one of the component obsolescence management strategies. The objectives of the research were to compare the difference between normal purchasing and EOL management in the case company as well as identify the reasons of EOL process inefficiency and additional risks. Another goal was to find the ways to minimize the risks and increase the efficiency of EOL process. One more aim of the project was to find out how to increase the financial performance of the case company and similar organizations through a better EOL management.
Many differences between the normal purchasing and EOL management were found during the research. These differences are mainly resulting from the uniqueness of EOL cases, unavailability of components and the low purchasing volume. The differences are leading to additional risks and are making EOL process less efficient than the normal purchasing process. Furthermore, EOL process is inevitable in technology related industries. Since it is not possible to completely avoid EOL management, EOL process shall be optimized in order to increase its efficiency and improve financial performance. In addition to process optimization, well-organized risk monitoring strategy can minimize EOL-specific risks. The results of the study are applicable to companies operating in similar industries.