BAM Blog: Who is watching out for your repair needs?Blog
May 21, 2014
Before & After Market (BAM) Blog: Most markets don’t realize a key product is in short supply until an OEM places an order that can’t be fulfilled. Shortages usually occur because of a spike in demand or something that interrupts production such as a natural disaster.
Sometimes even a market’s growth can be hindered due to short supply: PC makers in 2011 sold fewer units during the all-important holiday season because disk drives were scarce due to flooding in Thailand. A recent report by researcher TechNavio (http://www.researchandmarkets.com/research/2h63df/global_thermal) has concluded the market for thermal-imaging products is lagging due to a shortage that’s unusual in the electronics market. Thermal-imaging systems, which include a camera using five components -- an optic system, detector, amplifier, signal processing, and display – aren’t operating at peak efficiency because of a lack of regular support and services.
“Some vendors are unable to meet this demand, thus leading to customer dissatisfaction,” the report states. “Further, the third-party service providers are not closely monitored by the market vendors. This deters end-users from even adopting the effective and efficient thermal imaging cameras. Hence, vendors need to select the right vendor for obtaining constant support to attain operational excellence and enhanced convenience.”
Maintenance, repair, and operations (MRO) is a key service in any industry enabling customers to look for product warrantees and service options, especially for high-cost equipment. In electronics, many OEMs have outsourced this function to contract manufacturers or even third-party logistics providers such as UPS.
The availability of spare parts in electronics can get dicey sometimes because of an industry practice called end-of-life (EOL). Original component manufacturers (OCMs) often stop manufacturing devices so they can use capacity for a new product or because a device has reached the end of its lifecycle. Many OCMs have programs in place to support these parts – others don’t. That’s why customers buying expensive equipment should consider a vendor’s supply chain and MRO.
Some OCMs will sell residual devices leftover from a production run to those distributors authorized to resell these goods. Authorization means the devices are handled exactly the way the OCM would to maintain the component’s integrity. Other OCMs may put EOL devices up for sale in the open market in which companies bid -- and possibly pay top dollar—for devices that will eventually become scarce. A savvy OCM will have a couple of options in place: the authorized purchase of EOL products and availability of the necessary subassemblies to manufacture them if the need arises. In the semiconductor industry, this includes the die, mask, and IP associated with the original component. Companies such as Rochester Electronics are part of this supply chain to ensure parts don’t run out.
These companies not only buy and maintain EOL devices, but purchase die, masks and programming software from OCMs. This ensures that EOL components are maintained to OCM spec, or they can be remanufacted exactly as suppliers intended. If that’s not possible the device can be re-created to perform exactly to OCM specs and then support that product throughout its lifespan. With this type of supply chain, users will never be left without the parts or support necessary for their device.
The thermal imaging market is expected to grow at a rate of 20.5 percent through 2016. That’s a healthy pace. The only thing holding it back is the need for predictive maintenance of electrical systems, the TechNavio report states: “The global thermal imaging market has also been witnessing the emergence of the incorporation of communication interfaces. However, the need for increased investment could pose a challenge to the growth of this market. “
More and more, customers are considering a vendor’s entire supply chain when selecting a product. Even the best-quality equipment can break down or require maintenance. A vendor that does not have a system in place to service devices could lose a customer if unprepared for the demand of MRO. Smart vendors will have the right relationships in place from the start—even if their equipment never needs repair.