Best Practice in Asset Management: Managing Obsolescence

My previous blogs have touched on the issue of obsolescence, but what is it really?

Obsolescence can be defined as structures, systems or components ending their usefulness as a result of changes in knowledge, standards, technology or needs.

It can sometimes be identified by the absence of necessary spare parts or technical support. This can be the result of:

  • Vendors who no longer support the item
  • The vendor has gone out of business
  • Spare parts are no longer available
  • Upgrades have been made to software
  • Equipment no longer meets the needs, requirements or standards

When managing assets, we must be aware of any current or potential obsolescence so that we can take the necessary steps to ensure that these issues don’t result in an unplanned or unexpected interruption to services. It is far better to be aware that there are no parts available and have the necessary plans in place, than for an item to fail in service only to discover that it is obsolete and parts and / or service is no longer available. This situation can lead to prolonged down time and subsequent costs.

It must be noted that obsolescence is not only limited to old assets as it can also occur with reasonably new items, although as assets become older, obsolescence is certainly more prevalent.

All actions resulting from the recognition of obsolescence need to be documented and managed properly.

Once we have identified the issue of an asset or component becoming obsolete, there are a number of courses of action that we can choose to pursue. Some of these may include:

  1. Replace the asset / component with a suitable alternative sourced from within the organisation. Perhaps there is a similar piece of equipment in the “grave yard” from which parts could be salvaged.
  2. Replace the asset with a new item. If functionality differs from the original, a change control process may need to be implemented.
  3. Identify an alternative to replacement. Perhaps investigate having the item overhauled, refurbished or modified to suit readily available spare parts.
  4. Identifying a mode of operation (reduction of speed / cycles etc) that will prolong the life of the item until one of the above can be implemented.

For major pieces of equipment, a good relationship with the vendor can assist in identifying upcoming obsolescence issues.

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