Lifetime buys: Look for a history of trust

Kristofor Kelly, President and CEO

April 17th, 2019

Facing volatility in the high-reliability component sector? Consider a lifetime buy. Here’s our take on the market.

Market trends in early 2019 indicate that the heavily allocated market of recent years is shifting back to a more standard situation. However, we are seeing a trend of increasing obsolescence for critical high-reliability electronic components. Over the last few years, a series of mergers and acquisitions by electronic component manufacturers has taken place.

A major result of these changes? A significant reduction of component lines that high-reliability verticals have built their products around and want to continue. As mergers take up market share, competing product lines align under one manufacturer.

The resulting situation can threaten a whole product line, putting incredible pressure on OEMs in high-reliability verticals.

There are ways to absorb the impact of this change. Keeping high-reliability products on the market takes some strategy, but there are cost effective solutions when obsolescence threatens.

The far-reaching impacts of end-of-life notices.

Elimination or consolidation of product lines can happen rapidly, with major impacts to your process. Obsolescence or part-change notices sometimes provide just a few months to make last orders before they discontinue.

With that kind of turnaround, you need to have confidence in a partner before outsourcing the challenging situation of purchasing and storing your critical EOL materials. There is a lot at stake, but the upsides of a lifetime buy ­— ongoing access to the precise parts you need without any need to redesign your product or any worries about quality control — make this an attractive solution to an EOL situation.

Mitigating the risks of high stakes purchasing.

A lifetime buy can mean product line survival. When you encounter an EOL situation, you may need to act quickly to execute a lifetime buy. The large scale and attendant management considerations of a lifetime buy makes it a major business decision.

At the core of this decision? Finding a trusted EOL solution. Once the EOL purchase is made, you will need long-term storage to ensure that your inventory is safely managed

First up? How long has your potential partner handled these sorts of buys? You could gamble on a new player in the market to save money. But there are a wide host of risks with an unproven entity and this kind of high-value purchasing.

If they aren’t properly insured, or don’t handle the storage carefully — not to mention their financial stability — your lifetime buy is at risk. There are just too many ways this could go wrong when outsourcing to an up-and-coming partner.

Finding your ideal solution.

Once you’ve identified a safe partner, you should tweak the solution they offer to precisely fit your needs. The customization of lifetime buys should include strategies like re-banking and provide clear insight into security measures for storage.

Velocity has performed many lifetime buys since 2006 as a part of our custom and integrated solutions. Our record holds strong on access to smart purchasing strategies and safe storage. We will be featuring more about lifetime buys and you can read more about Velocity’s take on the changing market here.

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" There is a lot at stake, but the upsides of a lifetime buy ­— ongoing access to the precise parts you need without any need to redesign your product or any worries about quality control — make this an attractive solution to an EOL situation. "

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