If you’re a hardware engineering manager or product owner, you know that the ability to manufacture and ship your product in volume to new and repeat customers depends heavily on factors outside your control.
The most significant factor is the availability of components selected in the initial design. Components go obsolete all the time, and companies have departments set up to monitor this to be ready to replace them, ideally with drop-in exact form, fit, and function replacements, to ensure continued customer supply. The unavailability of a single resistor, costing less than a cent, can stop production of the entire product until suitable replacements are made. If no replacements are available, the product will need to be redesigned, which can take months to complete. Component manufacturers typically provide a six-month end-of-life warning, so this process can be effectively managed within that timeframe for production to continue without a gap.
AI Helps, but it Doesn’t Solve the Core Problem
All of this seems like it should function like a well-oiled machine, and today, with the advent of AI-driven parts obsolescence management systems (such as the latest version of Arena’s tools), knowing that components are approaching the end of life has never been easier. These tools automatically suggest drop-in replacements. While AI has helped automate the identification of replacement components, this increased visibility results in more:
- Engineering Change Order cycles
- Product validation and regression testing
- Documentation updates
- New supplier qualifications
- Excess and obsolete materials
For industries like telecom, where there is a requirement to support products for up to seven years beyond the last order date, this ties up substantial investment to build inventory that may never be used. This approach affects long-term profitability at exactly the time when the product should be at its peak profitability.
A Better Approach: Continuing Engineering
What if there were another way? For many years, I ran two parallel engineering teams:
- The main Design Team – focused on next-generation products
- The Continuation Engineering Team – focused on keeping existing products in market, profitably
To many engineers, the thought of being on the second team doesn’t sound very exciting, since it brings to mind simply replacing resistors through the obsolescence process described above. While this is part of the work, there comes a time when this replacement process becomes ineffective due to the age of the design – this is when the true value of this second team comes to bear. Using the knowledge gained through the process of obsolescence updates, the team had an unparalleled knowledge of how each product worked, in our case we were responsible for 1500 active hardware assemblies. [Through these repeated learning cycles, they gained deeper insights into:
- Which types of components were most at risk for obsolescence
- Which product family specifications were diverging over time
- Where SKU proliferation was driving additional cost and complexity
- When similar SKUs could be consolidated into new combined designs
SKU Consolidation as a Strategic Advantage
They would use the latest available technologies to create a single product that could provide the functions of those multiple SKUs, using programmable technologies and other techniques, such as de-populating components for some of the SKUs. This refresh of a number of products into one new design as a multi-use product reduced the number of manufacturing SKUs (thus reducing stocking, built-inventory and test requirements), as well as modernizing the product design to use the latest available parts (of all types) and removing short-term obsolescence issues, giving the product extra years in market at a reduced cost to manufacture. This is where continuation engineering shifted from reactive maintenance to portfolio optimization.
A Powerful Training Ground
Surprisingly, the continuation engineering team became one of the best places to train younger engineers because they:
- Worked on real products at lower risk
- Learned the core architecture deeply
- Redesigned with the freedom to create against known specifications (existing products)
- Saw firsthand how design decisions directly impact manufacturing, cost, and lifecycle
While this team was intended to serve as a training ground for younger engineers to gain experience and then move on to the main design team, many chose to stay on the continuation team because the work was interesting and fulfilling.
From Obsolescence to Competitive Edge
Continuation engineering strategy is a way to keep products in the market longer. To do this successfully, you need a deep understanding of the pivotal moments when this should be applied to your products. Applied thoughtfully, continuation engineering can transform aging products into profitable, simplified, modern platforms while freeing new product teams to accelerate innovation.
If you’d like to explore how a continuation engineering strategy could extend your product’s life, reduce SKU complexity, and improve profitability across your portfolio, let’s talk.
About the author: David Eden is a highly experienced product strategist, co-author of the book Agile Hardware Product Realization.
