Friday, January 13, 2012

Product deterioration

Many items that you may purchase can deteriorate over time even when they are not in use. The length of time the product is usually acceptable to be used is called its shelf life. This is similar to “best before dates” listed on food products.If deterioration is caused or accelerated by the way a product is stored, the buyer may require that all products be stored in a particular environment. For example over time and exposure to humid air a product may have corrosion that occurs that could affect its operation. Proximity to certain operations that use chemicals could also cause deterioration. If deterioration occurs over time, the buyer may require several things. First would be a date code showing when the product was manufactured be included on the product. That allows you to understand how old the product is. While you would expect that most suppliers would manage their inventory on a FIFO model (first in- first out), not all do and some have inventories of aging products or discover inventories held at other locations that they now must sell. Then you require that unless you otherwise agree, the supplier will not ship any products to you that are older than a specified period from when the item was manufactured. That period should be no more than the expected shelf life of the product. You might agree to accept out of date products at times when there are product shortages after evaluating the potential risk.

Products will also deteriorate over time based upon usage. That type of deterioration may cause product failures that are expressed as reliability failures. I discuss those types of failures in a separate post on reliability measurements.

One of the biggest areas of risk with respect to product deterioration is for products that are purchased through the broker or independent distributor market. While you can still verify the date code if it was stamped on the product, what you can’t verify how the product was stored, packaged etc. Once it was excess to the original purchaser you don’t know where or how they stored it. Once they made the decision to sell their excess, you don’t know how it was packaged for shipment or how that shipment was managed. It may have been sold to one broker and you don’t know how it was stored or handled by that broker. They may have sold it to the broker or independent distributor that now wants to sell it to you. At best you may be able to verify how they stored the product at their location, but that won’t provide you a true picture of how it was stored or handled.If you buy product from the original supplier there is always less of a concern about deterioration and handling. They provide a warranty so if they don’t manage it correctly they will have a warranty costs or possibly epidemic defects costs. When you buy it from a broker or independent distributor, since it was not purchased from an authorized channel, the suppliers warranty does not apply.