BLOG | The Multifaceted Risks and Implications of Obsolescence
News and information from the Advent IM team.
- by Olivia Lawlor-Blackburn
- Advent IM Blog
Obsolescence is the process by which a product, system, or component becomes outdated and no longer viable for use due to advancements in technology, regulatory changes, or the depletion of manufacturing resources. In sectors like defence, aerospace, and critical manufacturing, obsolescence can pose substantial risks to operational integrity, security, and innovation.
Take this as an example in defence, “Something like an F-35 or an aircraft carrier that takes a very long time to design, could have significant obsolescence problems by the time its fielded” says Michael Schwarm, Chief Growth Officer, SMT Corp. Long development cycles for complex systems pose a significant challenge for business leaders leading to increased costs, potential performance gaps, and the need for costly mid-development upgrades or redesigns. Additionally, evolving threats, regulatory changes, and shifting market demands can further complicate long-term projects, making it challenging to ensure that the final product remains competitive, effective, and aligned with current needs. Organisations must anticipate and manage obsolescence to maintain efficiency, security, and cost-effectiveness.
“Take it back to the design stage,” argues John Dyson, Technical Sales Winslow Adaptics. Vice Chair IIOM UK & Ireland. “There’s going to be supply chain disruptions of sorts, there’s going to be design changes, businesses joining together, and so on. So things are going to change, and if you can design alternatives or put modular design in place, for instance, where you have an option in the future.” This will ultimately put you in a stronger position to manage these changes, John adds.
Obsolescence presents a significant risk because it affects every stage of the supply chain, from production to maintenance and repair. It disrupts operational continuity, forcing organisations to find alternative solutions, often at high costs. Additionally, innovation can be stifled when outdated systems limit the ability to integrate new technologies. Industries that rely on legacy systems, such as defence and aerospace, are particularly vulnerable. These systems often remain in service for decades, but supporting technology and parts become increasingly difficult to source, making maintenance an ongoing challenge. Without proactive obsolescence management, entire fleets, weapons systems, or critical infrastructure may become unsupportable.
As legitimate sources for obsolete components dwindle, the risk of counterfeit parts infiltrating supply chains increases. In defence and government sectors, counterfeit electronic components and hardware can introduce vulnerabilities, degrade performance, or even lead to catastrophic failures. High-profile cases have demonstrated how counterfeit parts can compromise mission-critical systems, highlighting the need for rigorous supplier vetting and robust procurement strategies.
Obsolescence is not just a technical challenge; it has geopolitical, technological, and economic implications. Global supply chains are often disrupted by regulatory changes, trade restrictions, and economic shifts. As a result, industries dependent on specialised components must navigate these factors while ensuring the continuity of their systems.
During the COVID-19 pandemic, we saw severely disrupted global supply chains caused by factory shutdowns, labor shortages, transportation bottlenecks, and fluctuating demand, leading to delays, shortages, and increased costs across industries. “Ultimately, people ended up shortcutting their processes and procedures rather than ensuring they were buying the right products for the application, and that ultimately opens the door to the risk of counterfeiting entering the supply chain.” Mark Broadhead, SMT Corp – Business Development Director, Aerospace & Defence, explains.
Legacy systems, often designed without modern cybersecurity measures, are particularly susceptible to cyberattacks. Obsolete software and hardware create vulnerabilities that malicious actors can exploit, leading to data breaches or system failures. Additionally, counterfeit components can introduce security risks, particularly in sensitive applications like defence and critical infrastructure.
For engineers, obsolescence presents technical challenges in maintaining and retrofitting aging systems. Finding suitable replacements or reverse-engineering obsolete parts can be complex and resource-intensive. For senior managers, the challenge lies in balancing cost, risk, and operational requirements. Investing in new systems may be necessary, but budget constraints and regulatory compliance can complicate decision-making.
Manufacturers face immense challenges in producing parts for outdated systems. Limited demand often makes production unprofitable, leading to supply shortages. Companies must develop strategies for sourcing reliable replacements and extending the lifespan of essential systems.
“It shows the importance of your relationship with your suppliers. If they can come to you before they have discontinued a product, it’s the best place to be,” notes Alix Johnstone-Morfoisse, Director, SimplyBD. Early warnings about discontinued components allow businesses to plan ahead, enabling companies to find alternative suppliers, redesign products, stockpile critical parts, or adjust production schedules, reducing the risk of delays and unexpected costs.
Anecdotes about sourcing parts for vintage vehicles, such as the Ford Capri, illustrate the broader challenge of maintaining legacy systems. Engineers and organisations often turn to unconventional solutions, such as reverse engineering, 3D printing, or secondary markets, to find necessary components. Organisations must implement proactive obsolescence management strategies, such as lifecycle planning, supplier diversification, and investment in adaptable technologies, to mitigate risks effectively. It is important to remember, as Manu Grundy, CTO at IIOM UK (International Institute of Obsolescence Management), explains, “It’s not just an engineer who is responsible for managing, it’s a business decision.” While engineers manage technical feasibility, businesses need to look at the whole picture, including long-term cost and impact on your brand if you are no longer able to supply a service or product due to obsolescence. By staying ahead of obsolescence, industries can ensure resilience, security, and long-term sustainability.
To discover more about Obsolescence and to hear from our blog contributors in more detail, listen to our latest Advent IM Risk and Business Podcast below.
PART 1 – Here
PART 2 – COMING SOON 04/04
Links | Resources | References
Counterfeit parts found in U.S. nuclear plants -inspector general | Reuters
ERAI – counterfeit reporting and database
Hungarian company linked to the pagers that exploded in Lebanon and Syria | AP News
Fudan Micro JFM7K325T is a clone of AMD Embedded Kintex 7 325T FPGA – CNX Software
Information about nuclear worldwide
Stats from DoD, 70% of parts are already obsolete when fielding