Last week's SMTA and CALCE Symposium on Counterfeit Electronic Parts and Electronic Supply Chain held at The University of Maryland, was an eye-opening experience for me. Most of the participants were from the US Department of Defense (DOD) or companies that build and supply electronics parts for them. Most of the first day's talks at the Symposium focused on identifying where and from whom recent counterfeit parts enter the supply chain. Most frequently cited as sources for counterfeit parts were China and Taiwan, but there were also incidents involving American based companies. In other words, attendees were reminded that counterfeits can come from everywhere and anyone along the supply chain can fall victim to counterfeiters. There were many case studies and careful data presented that showed no one is immune to having received counterfeits, whether the largest OEMs, CEMs, and all types of distributors. Everyone is susceptible and everyone needs to work together to counter the threat of counterfeit parts in the industry..
Entering the supply chain
The definition of a counterfeit electronic part is one whose identity has been deliberately misrepresented by the supplier. These parts can by any type, from the most expensive to the most basic, common part; among those cited by speakers were amplifiers, microcontrollers, capacitors, logic devices, voltage regulators, memory devices and batteries. Speakers at the Symposium also provided case studies showing that most counterfeits are shipped by Express Mail, and there is no delivery system, whether FedEx, DHL or UPS, that is immune to unknowingly carrying counterfeits. According to the research presented, most counterfeit parts are put in small boxes and sent with expedited delivery to enter the supply chain as quickly as possible in the hopes that an immediate demand might mean that the receiver is not going to be as careful in screening and so the parts will go undetected. In some cases counterfeit parts have even been put in individuals' luggage on passenger planes in order to circumvent customs.
Preventing counterfeits in the supply chain
Prevention before detection was stressed as the best anti-counterfeiting strategy. In other words, know what you are buying and understand the realistic availability of the product:
- Is the part EOL or is it widely used in the market:
- Will you need to source these parts out of the normal channels?
- Make sure parts have traceability: that is, the parts underwent tests, inspections, and all other required documentation is in order and available.
I was a little surprised that the speakers did not focus much on qualifying vendors and the important role that industry standards and certifications play in quality control.. Unfortunately, the importance of having an Approved Vendors List (AVL) was briefly touched on but without much elaboration.
Reporting counterfeit parts was stressed though, which is an important positive. Two resources for reporting incidents are the Government-Industry Data Exchange Program (GIDEP) and the industry group ERAI. Both of these well-regarded organizations help report and inform companies in the industry of counterfeit activity.
How do counterfeit parts get into the supply chain?
Not properly disposing of scrap is the most common entry path for counterfeits in today's market. If scrap does not go to a qualified recycler it often ends up being shipped to countries where it is hand-picked in illegal part reclamation facilities. Parts are then harvested from PCB boards and put into containers for like-sized parts. These parts can now be prepared to be remarked. Parts that were once scrap and/or deemed defective are then sold as new and in working condition, that is, conforming to specification(s). Another way that counterfeits enter the supply chain is also through a reclamation process, scrap electronics are picked through by individuals to harvest the die out of these old parts and these die are then put into new packages.
In today's anti-counterfeit strategies, the days of decapping a part to just make sure it has a die are long gone; greater vigilance and more sophisticated anti-counterfeit methods are essential.
Counterfeiting is not limited to one or two companies, nor is it limited to any set of suppliers. Counterfeiting is an industry-wide problem. Counterfeit electronics has affected the consumer, industrial, commercial and numerous military. The keys to successful anti-counterfeiting include:
- Have a knowledgeable supply chain and quality management system and team in place.
- Know what you are buying up front.
- Know the market place and who out there has the part.
- Qualify your vendors and make sure they have the industry recognized certifications and audit them to make sure their processes and procedures are in place and being used.
These steps are relatively simple but can make a huge difference in whether or not you are buying a suspect part that may turn out to be counterfeit. The processes we have in place here at Smith & Associates are among the most thorough and the highest standards in the industry today. Coming away from this important and rewarding international and cross-industry symposium, I am confident that we at Smith & Associates are at the forefront of counterfeit detection and are making sure we continually improve to stay ahead of the counterfeiters.