What Is Lifecycle Management?

What Is Lifecycle Management?

Lifecycle management is a term used to describe the strategic measures that are taken to successfully move a product through its complete lifecycle. (Because of this, it’s also often referred to as “product lifecycle management.”) Effective lifecycle management requires the expertise and input of various teams and verticals across a given company, including sales, marketing, and product management.  

The stage a product is in within its broader lifecycle can have significant implications for how the professionals in these departments carry out their responsibilities. For example, if a particular product has just been introduced to the market, the marketing team will need to engineer an advertising campaign that communicates a considerable amount of information to the public and target consumers, including what the product does, how it works, and what benefits it will confer to prospective customers. More mature products that have a longer and more established track record in the marketplace, conversely, don’t need to be re-introduced to the public; rather, their marketing campaigns should be more focused on distinguishing them from competitors or evolving their image in some advantageous way. 

In general, lifecycle management entails not only assessing the stage a product is in within its lifecycle, but taking calculated action on that assessment and allowing it to inform how a company develops and advances its sales, marketing, and positioning strategies. 

What Are the Product Lifecycle Stages?

Understanding a commercial product in the context of individual “life stages” has been around since the middle of the 20th century. In 1957, famed advertising agency Booz Allen Hamilton first established the theory that a product’s lifecycle is comprised of five stages: introduction, growth, maturity, saturation, and decline. 

• Introduction: A commodity has gone through the main product development stages—including ideation, prototyping, testing, and commercialization—and is released into the marketplace. 

• Growth: The product begins generating sales, cultivating a customer base, and contributing to the company’s revenue. During this stage, the product may see steady or even rapid increases in demand, as marketing and word of mouth gain traction and the commodity develops a reputation within its target market. 

• Maturity: This stage may be perceived as the “prime” of the product’s life. In the maturity phase, the commodity has a steady roster of customers; generates consistent revenue for its manufacturer and the distributors who sell directly to consumers; and is firmly established in its respective marketplace, perhaps even carving out a substantive market share. Generally speaking, the highest sales volumes for products take place during the maturity phase. 

• Saturation: As the name implies, the saturation stage describes the point in a product lifecycle where it’s reached its maximum sales and its highest capacity of customers. One of the strongest signs that a commodity has entered the saturation stage is plateauing sales volumes, which clearly signals an item that is failing to expand its customer base. Another key, external factor in the saturation stage is the emergence and entrenchment of competitors who’ve released similar products, permeating a finite marketplace and making it exceedingly difficult for new growth to occur. 

• Decline: The inevitable demise of a product’s status as a relevant, high-grossing commodity, decline sets in when sales begin to drop in a definitive and largely irreversible way. A product’s decline may be triggered by a range of different events and trends, including the ascendance of newer, more advanced technology. This scenario looms especially large in the world of electronic components, where technological advancements are continuously emerging and sending older products into decline,  ultimately precipitating discontinuance and obsolescence. 

What Does Lifecycle Management Have to Do with Electronic Components?

As with millions of other goods in the market, electronic components adhere to the product lifecycle stages outlined above (with the possible additions of the phase-out and obsolescence stages). Industries like consumer electronics, automotive, aerospace, and defense are highly dynamic sectors perpetually engaged in redesigning products, tweaking bills of materials (BOMs), and embracing newer, more cutting-edge technologies. Because of this restless advancement and inherent changeability, the electronic components that function as the lifeblood—the blood cells, you might even say—of these industries are being replaced, phased out, and obsoleted at a much faster rate than many other products. 

According to the Z2Data report Obsolescence Trends in 2024, 473,910 electronic parts went obsolete in 2023. That figure was well above half-a-million in the two years prior. While this was attributable, at least in part, to the complex effects of the COVID-19 pandemic, it was also indicative of just how prevalent obsolescence is in the electronic component supply chain. Because of the extremely high frequency of parts being obsoleted in any given year, original equipment manufacturers (OEMs) and other companies that source electronic parts need to have a clear, comprehensive grasp of the lifecycle of the parts in their BOMs. 

In other words, because of the unrelenting risk of obsolescence that hangs over electronic components—including both interconnect, passive, and electromechanical (IP&E) and semiconductors—there’s a unique level of urgency and stakes imposed on professionals in the aforementioned industries to practice good lifecycle management. 

How Does Component Obsolescence Impact Lifecycle Management? 

In the sprawling world of electronic components—a supply chain that sustains many of the largest, most consequential commercial sectors in the world—obsolescence is the driving force behind lifecycle management. 

For many goods, lifecycle management means recognizing the life stage of the product and tailoring marketing, sales, and overarching corporate strategies in a way that’s effectively synchronized to that stage. But when it comes to electronic parts, OEMs practice lifecycle management for the primary purpose of sufficiently preparing for their eventual obsolescence. This often entails establishing clear contingency measures that can be implemented to mitigate the impact of a specific component reaching discontinuance. 

What Are the Most Effective Strategies for Component Lifecycle Management? 

Effectively managing the lifecycle of electronics parts requires component engineers and strategic sourcing professionals to draw on a range of proven techniques. Together, these established methods can preemptively assuage the consequences of obsolescence and safeguard future operations from costly disruptions. 

• Identifying Crosses: When it comes to managing obsolescence risk, few measures are more valuable than identifying crosses. OEMs and the professionals responsible for maintaining their product BOMs should look for alternates that meet form-fit-function (FFF) requirements; are actively stocked by distributors; and do not drastically impact costs and budget. Establishing cross-references should not be an ad-hoc, seat-of-the-pants measure, either. To be effective and repeatable, it needs to be an iterative process seamlessly incorporated into the product design and development stages.

• Practicing Effective Parts Selection: When engineers are selecting parts to put into a BOM for a new product, they’re beholden to an array of different criteria, including costs, form-fit-function requirements, and distributor availability. Though it doesn’t hold the same near-term weight, a component’s lifecycle stage should also be taken into consideration. Selecting parts that are earlier in their lifecycles—especially those in the growth and maturity stages—buys companies precious time before they have to source crosses or carry out redesigns. 

• Multisourcing: Having strong supply chain diversification is always a good practice for sourcing and procurement teams and the OEMs they work for. In the case of managing part lifecycles and mitigating obsolescence, businesses should identify alternate manufacturers that produce components that can serve as cross-references for existing parts. Keep in mind, however, that multisourcing at the level of distributors doesn’t help with mitigating obsolescence: when a supplier decides to discontinue a part, all vendors are equally powerless to restock it. 

• Obsolescence Forecasting: Although there’s an extensive repertoire of measures organizations can take to manage component lifecycles and reduce the risks associated with obsolescence, almost all of them depend on one thing: knowing the life stage of the component and when it’s likely to go obsolete. This is why obsolescence forecasting is such a critical tool for OEMs. Businesses in possession of the most accurate estimates of component life stages and the amount of time left before parts are discontinued can wield that intelligence to their advantage in a number of different ways. 

How Can Obsolescence Forecasting Help Businesses Manage Component Lifecycles? 

Accurate obsolescence forecasting is arguably the fulcrum of any effective component lifecycle management practice. Given its complexity, however, this technique is not always readily available. Few OEMs have the technology or in-house expertise to carry out this type of forecasting, which requires the ability to access vast amounts of current and historical data, analyze all of it with mathematical precision, and draw meaningful conclusions that can inform lifecycle forecasts. 

This is, in short, why a tool like supply chain risk management (SCRM) platform Z2Data can be so powerful. The SCRM software features proprietary lifecycle forecasting algorithms that can communicate to customers, with an industry-leading degree of accuracy, when components will reach end-of-life. In fact, Z2Data’s obsolescence projections have a historical accuracy of 90%—which means that customers can make decisions and implement risk management measures with the confidence that the intelligence they’re acting on is credible and trustworthy. To learn more about Z2Data’s EOL forecasting and a suite of other part risk management functionalities, visit the website or schedule a demo.