Page 28 - ADT MARCH / APRIL 2020 Digital Magazine | GBP

there is an opportunity for them to make zero-effort profit on a
least the bottom one per cent of their sales.

Tying up with a sustainment company for old product designs works
to the benefit of OEMs, said Plotkin. “A few years ago, we started
working with medium to large size OEMs. In the time that we have
been working with them, they have been able to improve their new
product introduction, their on-time performance and their earnings
while realizing quarter-to quarter growth over several consecutive [ EMBEDDED TECHNOLOGIES ]
computer boards and systems. The company quarters. There is an alternative out there to the enormous distrac-
uses OEM-authorized intellectual property to tion and overhead costs of dealing with dwindling demand for old
offer legacy manufacturing, lifecycle planning, product designs.”
lifecycle assurance and legacy engineering.
“WE RECOGNIZE THAT THERE ARE MORE PEOPLE
“Over the last three decades, we have worked
with a lot of OEMs such as Curtiss-Wright and MOVING INTO THIS SPACE,” Siku Thomason, GDCA
Kontron, but on an ad-hoc basis,” said Siku Marketing Manager.“IT IS BECAUSE OBSOLESCENCE IS
Thomason, GDCA Marketing Manager. “Our BECOMING A FIRESTORM IN THE BELLY OF A LOT
partnership with Radisys is not about trans- OF OPERATIONS. OBSOLESCENCE IS REALLY REAL.
ferring this problem product or that problem
product; it is about strategically unloading BASED ON HOW TECHNOLOGY IS PROGRESSING,
products to us, a legal equipment manufacturer. IT COULD BE EVERY TWO TO THREE MONTHS
Radisys is the first OEM that is moving into a full THAT A NEW COMPONENT IS ON THE MARKET.
outsourced integrated sustainment practice.” THERE ARE GOING TO BE A LOT OF OLD PRODUCT
Ethan Plotkin, GDCA CEO, believes that the
Radisys model is worth emulating for other DESIGNS. GETTING THE WORD OUT ON HOW TO
OEMs. “It is a bold move, providing customers MANAGE OBSOLESCENCE IS A BIG PART OF WHAT
with access to parts indefinitely — it’s unheard WE ARE DOING.”
of in the industry today,” he says.

Old product designs bog down OEMs that are
focused on introducing new product introduc-
tion ad active products, Plotkin told attendees
at the recent Embedded Tech Trends 2020 in
Atlanta. OEMs can save money if they manage
to optimize the way they deal with old designs,
he said.

“Sustainment slog happens over and over again
in our industry,” said Plotkin. “In response to the
reality that nobody can produce every product
that they have ever introduced, the industry
has taken to the practice of basically end of
lifeing old designs and offering last time buys
to customers. Unfortunately, last time buys do
not necessarily work for a lot of customers,” The company is looking at expanding into Asia, said Thomason.
he said. “We have mostly had a lot of our success in North America and
Europe, but we have had customers all over the world requesting
Product pruning increases profitability of our boards. A lot of legacy application equipment ends up in devel-
OEMs, said Plotkin, who referred to the 80-20 oping territories. They are often pushed into the grey market or
rule to drive home his point. “80 percent of rev- black market to find spares or replacement parts, or for repairs.
enue for companies comes from 20 percent We can make sure that they have a safe way to procure parts.”
SKUs. 25 percent of the overhead delivers 89
percent of the sales. The next 25 percent gives Thomason believes legacy equipment manufacturers are set to
7 percent more of sales while the third 25 per- become an even integral part of the ecosystem. “I think see us being
cent of overhead delivers three percent of the integrated into more OEM as just a business as usual process. That
sales. It takes the last 25 percent of overhead term LEM; you are going to hear that a lot more of it. Not everyone
to deliver the bottom of the barrel one percent recognizes the work that we do; it is not very sexy. But there is a
of the sales. People need to understand that lot of innovation happening in sustainment.”

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