Zendex

In today’s fast-paced world where some board-level products have a shelf life as short as six months, board and technology End-Of-Life (EOL) management has become vitally important.
Board-level product manufacturers continuously upgrade their products. This can create problems for OEMs that must maintain configuration control or are in a regulated industry in which board changes require expensive re-certification.

Products reach EOL when the manufacturing volume falls and the profitability sags. Manufacturers declare a last-buy opportunity, and customers are forced to make final purchases. This can be a risky decision because it requires accurately predicting the total number of boards needed over the subsequent years.

Zendex has created a market by buying older technologies and effectively extending the EOL timeline. Almost every Zendex board is somewhere in the EOL cycle. This paper gives the reader a "behind the scenes" look at one company’s ways to manage product end-of-life.

Why do some companies continue to use 20-year-old "legacy" designs such as Multibus I and II, CIMBUS and iSBX? For many, particularly those in regulated industries, the cost of qualifying a new board exceeds the cost of simply purchasing an existing board which happens to use old technology.

Regulated industries which infrequently change boards once qualified include military, aerospace, transportation and even some telecommunications companies.

Zendex can extend a board product’s EOL by carefully managing its fixed (overhead) expenses. With a lower overhead than many companies, Zendex can profitably manufacture product lines which are marginally profitable for a larger company. Consider Fig 1. which shows the product manufacturing costs for two companies. The larger company allocates fixed cost 1 to the product, Zendex allocates a lower fixed cost 2 for the same product. When the product is nearing "end of life" for company 1 and the quantity has fallen into the range of marginal profitability, there is still a reasonable profit margin for Zendex with carefully managed fixed costs

However, sustaining the production of old-technology boards can be a daunting task. Electrical functionality must be maintained at a minimum. Sometimes the entire board is configuration-controlled, which means that no component can change without hard-to-obtain approval. Furthermore, as components themselves reach EOL, they become harder to find and often more expensive. Finding old or obsolete components can be a real challenge!!

Behind the scenes at Zendex is a high-powered purchasing department that insures that components are available for 20+ year-old boards. They are the key players in a game of managed end-of-life.

The primary tool in managing board-level product end-of-life is a large selection of component sources. Among the more common sources are the Northern California Buyer’s Guide, a list of nation-wide distributors and their catalogs and the local phone book.

When the going gets tougher, Zendex uses more powerful component search means. A nation-wide matrix of parts brokers all have their own custom network of people with whom they exchange information about parts that are no longer manufactured.

The Internet has made the most profound change in the hard-to-find parts purchase business. Sites such as PartMiner’s freetradezone.com and supplyview.com provide buyers and sellers of unusual and hard-to-find parts around the world to find each other.

"We used to just get on the phone and call brokers." explained Tony Tam, head of the Zendex purchasing department. "It took a lot of time and didn’t always provide the desired result. Now we can look on the Internet and search for parts and parts vendors around the world. It’s much easier!"

For extremely hard-to-find obsolete parts, there is the gray market. Used parts are de-soldered and refurbished for reuse. Reputable manufacturers will tell you if they are forced to locate used parts to manufacture a board.

Here’s how a typical used IC finds its way into a new board. The used IC might be found, for example, on an obsolete pcb in a Hong Kong manufacturing plant. Local brokers purchase the entire pcb and cut it up, isolating the valuable IC on a small section of ragged pcb. The part is then sold on the gray market. Purchasers then send the pcb fragment to a refurbisher who removes the IC from the pcb, cleans off the excess solder and straightens the leads. Now the part is ready to be soldered into place and live a new life in some new piece of equipment. IC testing is done once the IC has been soldered into the application board.

Depending on the need and after obtaining the required customer permission, Zendex will redesign a board to use a different chip if the first one is unavailable and the replacement is available in quantities of just thousands.

At some point it simply becomes impractical to manufacture an older board. The timeframe for the "final" EOL depends on each individual circumstance. However, Zendex has manufactured some iSBX boards for over 20 years!