Walking where counterfeiters can’t and won’t go isn’t difficult. It just requires rigorous compliance with commonsense practices and the willingness to spend a few extra bucks upfront to avoid much bigger costs and embarrassment down the road. To start, though, companies must recognize the growing dangers counterfeits and substandard parts pose to the electronics supply chain.
Counterfeiting is a major hazard for all legitimate buyers and sellers of components and finished equipment in the electronics industry. It can also be a source of serious jeopardies for society at large especially in areas where tolerance for product failure comes quite close to zero, for instance in automotive, aviation, industrial, medical and military markets.
All of the economic sectors mentioned above are extensive and growing users of electronic components and subsystems. Products in these markets also happen to have long lives; it’s not unusual to have aircrafts that are still in use several decades after they were first introduced, for example. The problem for OEMs serving these markets is that some of their components or subsystem vendors may exit the sector or stop manufacturing the devices even while the end-equipment are still in service.
End-of-life (EOL) and obsolescence are the major backdoors through which fake parts enter the supply chain as the US Defense Department found out in a 2010 landmark survey that sought to discover the extent to which fake parts have infiltrated the military supply chain. The report concluded that the U.S. navy and other military services have had issues maintaining systems that “are used far after their original end-of-life projections.” The report noted further:
Thus, DOD procurement agents quickly find their multiple sources of needed electronic parts turning into sole sources or disappearing altogether. This problem has been further compounded by extended usage of weapon systems and platforms in Iraq and Afghanistan, which have diminished existing and well intentioned life of type or life time buys and spare parts inventories.
How has the DoD responded? On May 16, it issued the latest proposal for implementing the 2012 fiscal year National Defense Authorization Act, which puts the onus on vendors to ensure the supply chain is free of counterfeit parts. I will write more on this in a separate blog. After reviewing the proposal (See: 78 Fed. Reg. 28,780 (May 16, 2013) ) I concluded that the process for avoiding tripping up on counterfeits isn’t that complicated. It may cost an enterprise more in upfront expenses but the additional spending would be trivial compared with the charges likely to be incurred for violating anti-counterfeiting regulations especially for suppliers to the DoD.
So, here’s a simple solution suggested by George Karalias, director of marketing and communications at Rochester Electronics, in a blog posted June 21: Plan for product end-of-life and you won’t walk the same path traveled by counterfeiters. Karalias didn’t quite put it in those words but the essence is the same. Remember, I noted earlier that the easiest way counterfeits and substandard parts enter the supply chain is via the end-of-life route. Close that loophole and they are left with nothing to chew on at least with regards to these critical industries.
So, how can OEMs, EMS providers and component suppliers ensure continuing supply of products that have short shelf lives or which create problems for buyers when they move to the obsolescence list? The answer is simple: Deal with companies that have licensed the rights to continue manufacturing those products. If they don’t have the parts under license they do take steps to secure it. This is a go-to-market strategy for companies like Rochester, which prides itself on being able to help OEMs resolve EOL and obsolescence problems long before the parts are discontinued.
What Karalias said in his blog is similar to what the DoD is proposing as it takes steps to implement Congressional mandate on a counterfeit-free military supply chain. I will discuss the DoD’s proposal in a separate blog but here’s Karalias’s suggestion:
One of the most important things an OEM can do to ensure component availability over the life of a design is to put an end-of-life strategy in place at the time a component is designed in, or at the very latest, when an EOL announcement is made. Many semiconductor manufacturers work with authorized suppliers that continue to stock, sell, and even manufacture the original device. Exploring the options offered by those suppliers before an obsolescent semiconductor is needed for production, maintenance or repair saves time, money and aggravation.
I term this “Walking Where Counterfeiters Cannot Go” because this is a step counterfeiters just won’t take. It’s that simple.
DISCLAIMER: BOLAJI OJO IS EDITOR-IN-CHIEF AND PUBLISHER AT EPS. THE VIEWS EXPRESSED IN THIS BLOG ARE THOSE OF THE AUTHOR ALONE WHO PROMISES TO BASE HIS SOMETIMES BIASED, POSSIBLY IGNORANT, OCCASIONALLY IRRELEVANT BUT ABSOLUTELY STIMULATING THOUGHTS ON THE SUBJECTIVE INTERPRETATION OF VERIFIABLE FACTS ALONE. ANY COMMENTS SHOULD BE SENT TO THE AUTHOR AT BOLAJI.OJO@EPSNEWSONLINE.COM.