In materials management, a discontinuation date refers to the specified key date from which an item or material is no longer used for production, sales or procurement. It marks the transition from a discontinued material to a successor material or the complete phasing out of a product. The phase-out date is therefore a central control element in phase-out management and serves to avoid material overages (remaining stock that has to be scrapped) or material shortages (production stops due to missing parts).
The optimum phase-out date should be determined on the basis of current stocks, forecast consumption and the replacement time of the successor material. The aim should be to use up stocks of discontinued material as far as possible. Modern tools or add-ons can carry out simulations to determine the appropriate expiry date.
Our tip:
If there is a successor product to a discontinued material, it must be ensured that the successor product is available on the discontinuation date. Procurement, production and assembly orders must be scheduled accordingly in good time. Particularly in the case of long overall lead times, this requires very early phase-out and associated phase-in planning. In our experience, this often goes wrong in practice, discontinuation dates have to be postponed at short notice and availability collapses in the meantime.
When finished products or components are discontinued, not only the remaining amounts of these materials must be considered, but also the effects of the discontinuation on the other components or individual parts in the bill of materials. As a rule, the discontinuation of a higher-level material means that parts on lower BOM items are no longer required or are required to a significantly lesser extent. Therefore, do not forget to consider the effects of a parts discontinuation on the entire bill of materials and possibly even on the entire supply chain. If you do not have a system for automatic MRP parameter optimisation, such as DISKOVER, the settings of the MRP parameters must be checked by the entire supply chain and readjusted if necessary.
Checklist: Analyse the effects of discontinued parts
1. check remaining stocks
- Are stocks of the discontinued product/part still available?
- Have residual values been recognised or written off?
- What happens to stock that is no longer required?
2. analyse parts list
- Which subordinate components are affected?
- Are there individual parts that are no longer required?
- Will the demand for other products continue to exist?
3. effects on the supply chain
- Have suppliers been informed about changed requirements?
- Have order quantities been adjusted to new requirements?
- Has the entire supply chain been checked for consequences?
4. check disposition parameters
- Are scheduling parameters automatically optimised (e.g. by DISKOVER)?
- If not: Have all scheduling parameters been checked manually?
- Have safety stocks, batch sizes and order cycles been adjusted?
5. consider downstream processes
- Are production processes affected?
- Do plans or capacities need to be adjusted?
- Are there any effects on warehousing or logistics?
