Counterfeit electronic parts are on the rise. The US military is particularly alarmed.
The Senate Armed Services Committee met in November to discuss the risk counterfeit parts are posing to the reliability of US military defense systems. After the hearing, Senators Carl Levin and John McCain introduced an amendment to the National Defense Authorization Act to address this problem. The Senate passed it 97-3. It is expected to pass the House as well and become law shortly.
Why all the concern?
Counterfeit electronic parts are invading the US supply chain at an increasing rate. More than 70 percent of the counterfeit parts are coming from China. Ironically, counterfeiters in China are frequently making counterfeit parts from US electronic waste (e-waste) shipped to China. (See: Military Hardware Security Compromised .)
Counterfeiters typically take scrap components (like semiconductors and transistors) and then sand off part numbers and any other identifying marks. Then in a process known as “black topping,” they recoat the parts to hide the sanding marks. Black-topped parts often look brand new.
The US defense industry is particularly vulnerable to counterfeit electronic parts. It typically relies on military and commercial-grade “obsolete parts” to maintain its equipment. That reliance results from the long lifecycles of defense systems. An electronic part may be manufactured for only a couple years, while a defense system can remain in service for over two decades.
Defense contractors are often forced to purchase hard-to-find replacement parts from independent distributors. There is an inherent risk in doing this. While some independent distributors operate legitimately, others may be set up for the sole purpose of selling counterfeit parts. Some defense contractors understand that and take steps to reduce counterfeit risk. They impose strict requirements on their suppliers and test electronic parts not purchased from an original manufacturer or authorized distributor.
The ease of doing business via the Internet adds to the problem. It provides counterfeiters access to the global marketplace. A large number of internet-based distributors specialize in selling counterfeit parts.
How can you avoid counterfeit parts?
Here are several ways to help ensure you are not buying counterfeit parts:
Buy only from an original manufacturer or an authorized distributor.
Avoid making gray-market purchases.
Send your scrap electronic equipment to a high-quality in-country recycler that does not engage in offshore e-waste shipments.
Authorized distributors should establish systems to reduce counterfeit risk, adopting and adhering to strict, internationally recognized quality standards, like AS9100, AS9120 or AS6081. (See 10 Tips for Avoiding Counterfeit Components.)
What does the new rule adopted by the US Senate require?
The Levin-McCain amendment targets large US defense contractors. It requires them to establish systems for detecting and avoiding counterfeit parts and authorizes reduced payments to contractors who fail to do so. It also requires contractors to absorb the costs of fixing problems caused by counterfeit parts.
In addition, the amendment requires the Secretary of Homeland Security to conduct enhanced inspections of electronic parts, and the Department of Defense to adopt policies and procedures for detecting/avoiding counterfeit parts and for assessing and acting on reports of counterfeits.
Are you alarmed by the increase in counterfeit parts? Are you taking any actions to avoid counterfeit parts? Let me know.
And test your counterfeit parts knowledge with this quiz.
This gives credence to wanting to use an SCD all the more. Unless you have complete confidence in all of the parameters of the part you propose to use in some circuitry, then you might as well be whistling in the wind. You MUST know everything about the parts you'll be using including the knowldege that they are genuine parts with a vendor's guarantee, not only the parameters of the part.
When you write an SCD, you are telling the vendor EXACTLY what you want, and as part of the SCD (Specification Control Drawing) you might also write another type of SCD (Source Controlled Drawing). I know that this is somewhat confusing, but the acronym SCD really is used for both. By controlling the source of the parts, you use your knowledge of that part, including who makes it, and who is the reliable company from whom you purchase it. If that source isn't willing to give a written guarantee that the part is genuine, then you might think of removing their name from your approved parts list. Remember what I have previously stated, "it's all about money" and you'd be surprised what happens when the possibility of losing a sale occurrs.
I know that Element14 is a very reliable company and have caused very few problems with the parts which they provide to the community. All I'm saying, is to be cautious and absolutely sure you're getting the exact part you want. "Cover your A--"
Ken: Please do not take this as a slam - your company's name was the one used by TTT. I was trying to be generic and I cannot conceive of Newark/element14 not being willing to assure any company that the parts you provide are genuine to be best of you knowledge, and that you'd replace any which were not as advertised.
Would you please send me your email address. I have a letter I'd like to send to you, which Douglas, Steve Terry and I have put together, on which you might be interested.
Brian, Counterfeit products have also entered the channel even through companies that provide written warranties for their products. This has occurred via returns and some companies unsuspectingly have passed on such products, legitimizing their presence in the supply chain. Asking for guarantees is important as you noted and it does help greatly but it is not foolproof. The move to stop it must be coordinated.
I agree, only problem is that the wording of Element 14/Farnell conditions of sale seem to suggest that they don't offer warranty for military sales. As Ken is the blogger perhaps he could clarify on behalf of Element 14 ?
This illustrates my previous comments that if there are any problms with obtaining parts with all of your requirements, your choice is to NOT purchase from anyone who won't back up what they're selling to you and you should have a Specification Control Drawing (SCD) for any parts for which you might have a problem or special need. With an SCD, you are able to tell the supplier EXACTLY what you need and want. If the suppllier sends you parts which do not meet the requirements of yor drawing, you now have recourse and can return the unwanted parts for credit, which you might not be able to do without an SCD. You must control what you are receiving, and the best way to do this is with an SCDF.
Look at it from the supplier's point of view - if he's crooked, i.e. he won't back up the parts he ships to you, then you have to refuse to buy from him, and he loses money. If he's not crooked, then his motivation is to make money by supplying you exactly (per your SCD) what you want and need, thus setting the stage for further business from you and making money for him. Remember, it's all about money - dont give him any if he won't supply what you want, but you must tell him exactly what it is that you want and need. Doing this over the phone, just doesn't work - it must be in writing so that there is no misunderstanding. The SCD is the best way to do this.
I know that writing an SCD is costly, in terms of time and money, but that's much less money than you'll spend to fix a problem which occurs if you receive the wrong part. Once again, I can't emphasize too much that it's all about money!
According to my understanding some distributors do not even provide warranty in contract that the new parts they sell are suitable for military applications. In my humble opinion this is a more pressing issue than fake components.
I want you to know that this problem is rampant in the US miltary also. Ther have been 3900 parts, recently, which have diagnosed as counterfeit. These parts have found their way into Army, NAvy and Air Force circuitry. As a result, a bill has been introduced into the Senate regarding this problem and the need for an adequate resolution to it. We at Components Engineering are suggesting a solution for this problem to the government and hope to be able to move forward on it shortly. While this effort will, primarily, be oriented towards the parts used by the US military, there will be a significant "trickle down" into the commercial market as well. We will be writing typical Specification Control Drawings (SCDs) for the Military, amongst other things,
nd these can be used by those of the commercial marketplace as guidlines for procuring parts. Keep you eyes on our website for further developments on this topic.
Thanks for the comment. You are probably right. Supply chain communication is poor so there is a bit of "buyer beware". It is heightened by the ease of internet selling. A counterfeiter can easily just change his internet name and address. No easy solution for buyers, just be vigilant.
This new version will expand coverage to all electrical and electronic equipment, require special marking of finished goods and more compliance documentation, and increase penalties for non-compliance.
The US Senate Armed Services Committee uncovered approximately 1,800 cases of suspected counterfeiting over a two-year period. One Air Force supplier alone supplied 84,000 counterfeit devices.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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