Double ordering, canceled customer orders, changes in market demand, and a shift away from just-in-time inventory management have all contributed to excess inventories with OEMs, EMS companies, and distributors. If you’re a smaller company that was happy to pass parts costs onto customers, you’re probably also holding inventory in your desk drawer, just waiting for a good opportunity to use it in a new project.
When there is excess inventory, what can you do to clear it out and create some additional cost savings on new projects? In this article, we’ll look at some ideas on how to use old components in new projects, and how you could squeeze some cost savings from your new projects with old components. You don’t have to start up a parts brokering business to make money off your old components.
Some Ideas for Using Old Components
Even though an electronic part might be old, it still has a lot of value. The logical place to start is to prioritize use of these older parts in a new project. As long as they are not damaged, exposed to harmful chemicals, and they are solderable, they can certainly be reused in a new design. The other option is to liquidate them, either by trading with another company or selling them to a parts broker.
Store Old Parts For the Future
If you have the room and packaging materials available, you might as well store your components for some future use. You never know when a new opportunity to use your old parts might arise, so don’t be so quick as to get rid of your parts early. Instead, make sure to package the parts correctly, and hold them in a safe location until they are needed for another project.
Storage materials for electronics are readily available from commercial suppliers and they can be purchased for low cost. These materials can do double duty as shipping materials for components and finished assemblies. These parts may need to be moisture-resistant and vacuum-sealable to fully protect some components. Make sure to read the datasheets for your highest value components before purchasing packaging and storage materials.
If you plan to store parts long-term and reuse these in a new project, make sure you record the dates when the part was purchased and packaged. If properly stored, components can last for many years without problems, but take a FIFO (first-in, first-out) approach when you start looking in your stock room for parts.
At some point, you might have accumulated too much inventory, and it’s time to make good use of your stored components. Some possible uses include new projects, maintenance on old client projects, emergency parts needed in a prototype, or as a last-minute part replacement during board debugging. The fastest way to run through your old parts is to prioritize them in a proof of concept for a new product.
Use Old Parts For Proofs of Concept
If you are starting a new project, and you’re in the proof-of-concept stage, you can prioritize use of your old parts in the new design in order to reduce your costs. Going this route also allows you to reuse old design data if it is applicable to the project. Both approaches cut down the time to get to a proof of concept, especially for things like small embedded boards with specialty peripherals.
Simple proofs of concept can be built from old components.
While not all old parts will be applicable to a proof-of-concept for a new product, many old parts can be easily reused. Many parts are applicable to multiple products, and if you’re clever you can shorten the BOM for the proof of concept to just a few lines. Examples of commonly reusable parts include:
- Passive components
- Discrete semiconductors
- Array components (diode arrays, resistor arrays, etc.)
- Common ASICs (power regulators, ADC/DAC chips, MCUs)
- Common connectors (USB, RJ-45, barrel jacks)
- Tactile switches
- Mechanical parts (Headers, standoffs, screws, etc.)
Some older parts like pin headers will never go out of style, and it makes a lot of sense to keep 1x row pin headers with long lead count. These 1-row headers can even be broken off from long header pieces so that you get exactly the number of leads you need. An example 0.05 inch pitch pin header is shown below.
It never hurts to keep some of these pin headers around.
To get the board produced quickly, take your proof-of-concept board design to a Chinese supplier and get it produced cheaply. They can usually turn boards very quickly for low cost as long as you are not aggressive on linewidth/spacing, drill size, layer counts, and copper weight. The simpler the board, the lower the cost will be, and your main timing bottleneck will be the shipping speed from the overseas supplier.
Use Old Parts For Stress Tests
Stress tests may be needed in products that have a reliability requirement, typically being related to thermal or mechanical demands. Old parts can be used in a proof-of-concept or a prototype when that prototype is sacrificial and will only be used for stress tests, environmental tests, and any other destructive tests. As part of testing, these boards usually get pushed to their limits, and it can result in destruction of some components. If the goal is to determine the destructive limits on the board and its components, it doesn’t always make sense to use brand new components.
ESD testing is one type of test that can be used to assess component vulnerabilities and board layout practices with a proof of concept.
Some caution is warranted here because components need to be in proper condition to ensure the reliability results received from these boards are accurate. In short, the parts used for testing need to be free of any of the contaminants that can result from incorrect packaging and storage of components. Specifically, watch for the following when opening up packaging for these stored components:
- Corrosion on leads
- Cracking on leads or casing
- Buildup of solids on leads or casing
- Deformed packaging
Sometimes, a simple bake procedure will be needed, even if just for parts with an MSL rating of Level 2 or higher. This will remove condensates, including water vapor, that may have infiltrated the packaging over time. Visual inspection of the component and a moisture indicator card is typically enough to verify that the parts were stored correctly.
Sell or Trade For New Parts
Even in periods where components have come back into surplus, some parts might still be difficult to find. This is where you could consider trading your old parts with another company or distributor. The other option is to sell your old parts and use the cash to finance your upcoming projects. Parts that come in their original packaging, such as reels or trays, will fetch the highest prices.
Parts packaged in their original reel can fetch a higher price because they can be immediately used in a pick-and-place machine.
The very large US distributors like Digi-Key, Avnet, and Mouser are highly unlikely to respond to a request for a trade, even if you provide documentation showing when and where the parts were purchased. They are the go-to distributors for most parts and they will not accept secondhand components. However, smaller distributors who have sales people that can be reached directly might be willing to make a trade. If there is a particular distributor who has parts you need, try reaching out to them on LinkedIn and see if they would be willing to trade.
Finally, there are overseas component brokers who will buy up your old parts as they will be reselling these on the open market. They usually will not care whether or not you have documentation for the parts. They will also tend to offer you far below the market price for new parts, but they might also take old parts in smaller quantities. Just make sure you are selling parts that actually work so that you do not contribute to the rampant component counterfeiting problem.
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