How a Fortune 100 Company Cut Redesign Costs by Over $1M Annually Without Firefighting Obsolescence
- Christoph Horlebein
- Mar 7
- 3 min read
Updated: Mar 25
The Challenge: Why Do Unexpected Redesigns Keep Happening?
Every year, 37% of all obsoleted components disappear without prior notice—a reality that caught many manufacturers off guard in 2024, when approximately 185,000 components (Z2Data) disappeared without a Product Discontinuation Notification (PDN).
For companies relying on these components, the impact was severe:
Cancelled orders with no Last Time Buy (LTB) options
Production stops and costly R&D firefighting efforts
High redesign costs often underestimated due to hidden expenses
What makes redesigns so expensive? Beyond direct engineering costs, businesses also face:
Extensive Validation & Verification (V&V) processes
Regulatory submissions and compliance approvals
Documentation updates and internal training
These costs vary significantly depending on industry regulation and component type. Flip Electronics estimates the following average redesign expenses (costs per single project):
Passive component (minimally regulated industry): $21,275
Microprocessor (minimally regulated industry): $1,847,300
Passive component (highly regulated industry): $30,825
Microprocessor (highly regulated industry): $33,488,775
For many businesses, these costs spiral quickly—leading to budget overruns, resource strain, and missed market opportunities.
The Strategy: From Firefighting to Proactive Obsolescence Management
A Fortune 100 company facing skyrocketing redesign costs implemented a two-pronged approach to regain control over obsolescence challenges and their cost:
Design for Resilience: Eliminating Future Risk at the Source
Early-stage design strategies were defined and implemented to avoid using components with high obsolescence and supply chain risk.
AI and Big Data-driven insights provided real-time supply chain intelligence, predicting lifecycle risks and supply chain risks related to manufacturers, geopolitical factors, natural events, and regulatory changes to help R&D teams select the right components upfront.
Dual/multi-sourcing strategies reduced dependence on single suppliers, ensuring availability and price stability.
Strategic Obsolescence Planning: Navigating Existing Products Through Unstable Markets
A component criticality assessment mapped out risk exposure so that part and criticality specific mitigation measures could be implemented (e.g. safety stocks).
Tombstone charts as used in Defense and Aerospace projects (Figure 1) helped to visualize when components would become obsolete, allowing the company to bundle multiple obsolescence risks into a single redesign effort.
Proactive planning ensured budgets and resources were allocated in advance, avoiding emergency firefighting projects.
The Results: $1.4M in Savings and 75% | 85% Reduction in Redesign Projects
(Savings p.a. and Product)
By shifting from reactive firefighting to strategic product risk management, the company achieved:
85% reduction in redesign projects for new products through proactive and data-driven component selection ≘ $758,829 saved annually.
75% reduction in R&D firefighting redesign projects for existing products by streamlining obsolescence initiatives ≘ $669,555 saved annually.
Total: Redesign project reduction of 85% (NPI) and 75% (existing product), with $1,428,384 saved annually per product.
Key Takeaways: Why Every Manufacturer Needs to Act Now
37% of all obsoleted components disappear without warning. If you’re not prepared, you’ll end up in an expensive cycle of emergency redesigns.
Redesigns are not only costly—they also result in opportunity costs, drain resources, delay product launches, and reduce profitability.
Proactive obsolescence management is the only way to break free. AI-driven lifecycle intelligence and structured redesign planning can eliminate unnecessary costs and increase operational resilience.
How is your company managing redesign costs? Are you stuck in a cycle of firefighting obsolescence, or do you have a proactive plan in place?
Let’s discuss how you can turn risk into resilience and cost into opportunity.
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