@WaqasAltaf, I think your concern can only be overcome by more stringent compliance rules and random compliance audits. If a manufacturer is reporting false information about a product to the authorities, I an audit report should be able to highlight the anomalies. Once, the fraud has been established the authorities may penalize the concerned accordingly.
"Defense contractors, for example, are putting new language in their contracts to hold partners liable."
If there is a lacuna in law to hold responsible the actual supplier and not the finished good manufacturer, regulatory authorities will find it hard to chase down the actual culprit. There should be a law which holds liable the finished good manufacturer to ensure that parts being used are fulfilling all legal requirements.
The concern is you mention is genuine as manufacturing without compliance leads to some bad after effects for the firm. Sanctions and fines are just one part of the equation. The bad will that such a case might bring to a manufacturer is unimaginable.
I'm not sure that any of these regulations expressly mention contract manufacturers, but they do hold the OEM liable for ensuring that their products meet the regulations. That means pushing the requirements back through the supply chain, to subcontractors and to parts suppliers. That's what's happening in the case of the conflict minerals and counterfeits, at least. Defense contractors, for example, are putting new language in their contracts to hold partners liable.
"How the companies will actually compete with other low cost alternatives who doesn't follow all these regulations effectively?"
That certainly is a wide concern of all organizations that follow regulations and are also competing in intense competition markets where price-war exists. The organizations that dont comply however take a big risk of bearing penalties and sanction if being caught as the non-compliance means being involved in counterfeiting and certainly, if caught, there wont be tolerable penalties.
These new regulations could definitely put lot of pressure on many electronic OEMs and the over head could result in price increase. How the companies will actually compete with other low cost alternatives who doesn't follow all these regulations effectively?
An organization that is involved in selling products built from counterfeit part, are the regulations expecting that organization to report on those counterfeit parts honestly?
Obviously, the truth may never come out. The regulations, if they are to be successful, should, besides requiring companies to file reports, include intense audit as well to capture any non-compliance and fraudulent reporting.
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.
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.
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.