Mostly I was trying to emphasize the obsolescense issue that often occurs in the defense industry due to the long design and produciton cycles, and how counterfeit components just adds to the headaches. Defense contractors are very serious about detecting and avoiding counterfeit parts. And you are correct - no one wants to deal with the cost repercussions from having used them.
As the contractor, if you are 'lucky' (or more accurately, diligent), you or your supplier detect and eliminate counterfeits from teh supply chain befre they are used. But the result is that the contratcor may be scambling to find a source of legitimate parts, or, is forced to design in another component, redesign a board to match the footprint, or whatever else is involved with the remaining options.
Eldredge, are you meaning manufacturers using components that turn out to be counterfeit? The issue is, who covers the cost of replacing the counterfeit component? The manufacturer will have to do deal with the cost in the end, even though they rightly shouldn't need to.
30 months might not seem like a lot but being in a prison for any time is a deterrent. I think the bigger issue is that the counterfeiting process is largely done offshore - away from the reach of US law. We need better IP protection and enforcement in the countries where it occurs. That is up to the state department and our administration. Is it any coincidence that counterfeits come from current or former communist countries where the people who knew how to make money were also the ones who knew how to "get around the system".
In the military sector, the amount of time required to qualify hardware, and hence the components that go into that hardware, combined with the life of the program for bbioding the hardware, almost inevitably create an obsolescence issue with some components. This tends to cause supply issues that conterfeiters have taken advantage of in the past.
Given the seriousness of the problem, one would think that the manufacturers would be motivated to destroy the defective product on-site, then let their subcontractors dispose of the waste, and not allow this product to compete in their own market.
@rohs--that could be a contributor, although I would look farther back than 2009 to see if there is a trend. The IDEA site has been available for at least a decade, although it has changed venues, I think. Your point about incoming inspection, though, is right on the money. Independents became really aggressive, and public, about incoming inspection within the last 2-3 years. (I know this becuase I received the press releases.) If those distributors reported counterfeiting incidents, that could certainly account for the spike between 2009 and 2011.
Is it possible that the incident rate increase of reported conterfeiting is due to the fact that more people/company's are more aware of the problem and are on the lookout for it?.......and are reporting it? I know that in the independent supplier market place, we are more alert, and on the lookout for suspesct suppliers and suspect parts upon incoming inspection. Also services we pay for eg; ERAI etc are reporting fradulent parts on an almost daily basis........so maybe the increase in the reported rate may be due to some of these steps taken to prevent?????
RoHS--that was a big case, and yet you are correct--the penalty was absurd. Once again, by the time it gets to the point of prosecuting people who traffic in the goods it is too late. I believe those components were discovered at the contractor level. That contractor no doubt had to find alternative parts and start from scratch.
I strongly believe limiting access to discarded components will help cut down this problem. The reason most bogus parts go undetected for so long is they probably perform 99 percent of the time. If a counterfeiter makes a chip rom scratch, there is usually a problem that can be caught earlier in the supply chain. My favorite story is about a counterfeiter that misspelled Malaysia on the surface of the device.
I read today the FED ruling on sentencing for the owner of MVP Micro; a convicted chip counterfeiter. He was sentenced to ONLY 30 months. If his partner (who committed suicide as a result of being arrested for the same offense) had only known that he would get such a slap on the wrist, he would probably still be alive today. No doubt the MVP owner stashed a good portion of his $$$ away before getting caught and will come out 'all set' when he gets outta da big house......30 months incarceration is a joke for such an offense.........what if it was traced back that 'mil spec' components he sold ended up in a system that malfunctioned and killed our brave soliders???? The man (using the term 'man' loosely) should go away for a lot longer...........the penalties for being caught should be much greater........it may not stem the tide of counterfeiting but it may keep some from entering into the 'dark side'!
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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.
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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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