Everyone agrees counterfeiting poses a threat to the health of the electronics supply chain. Previously, I have focused on the extent of the problem, the roles of the different players in the supply chain, and how the industry keeps seeing independent distributors as the main culprits. (See: Don't Blame Independent Distributors Alone for Fake Parts, Part 1 and Part 2, and Countering Counterfeits.)
In this blog, I am focusing instead on practical steps industry players can take to avoid getting snagged in the counterfeit web. The first step in avoiding counterfeits is to put in place processes and procedures for selecting vendors. Here are ten additional suggestions:
- Make certifications a requirement: ISO 9001, ESD S20.20, and AS9120 are the basics. Once released, the AS6081 should also be in place. A company that has not been audited by a third-party certification body and certified compliant to these minimum standards is not likely to be effective at avoiding counterfeits.
- Identify distributors that have systems and processes in place to screen for counterfeit parts including thorough visual inspections and advance counterfeit detection techniques such as decapsulation, pin-print analysis, X-Ray, SEM, EDF, XRF, and full functional testing.
- Work with distributors that are aligned with industry organizations such as ERAI, IDEA, GIDEP, and SMTA. These are some great organizations that work hard to keep counterfeits out of the marketplace. Distributors that align with these organizations are more likely to have up-to-date counterfeit avoidance processes in place.
- Check the supplier's trade references. Any good distributor will have a long list of happy customers that you can contact for a reference check. Any company without a list of trade references, trade references that give bad feedback, or references from unknown organizations should be avoided.
- Check online presence: A quick Google search can tell you a lot about a company. Is it in the news; is it active in the community; does it have any bad press out there; and what kinds of things are posted on its social media sites, if it has any? This is another good snapshot to get an idea of how a company operates.
- Check with ERAI and GIDEP to see if there have been any negative reports against the company.
- Check its Dunn & Bradstreet credit rating. A poor credit rating could be a sign of troubles in the quality department as well.
- Have clear and concise purchasing agreements, including language that deems counterfeit parts have zero value.
- Protect yourself by requesting net terms, especially with a new vendor.
- Report any incidences of suspected counterfeits to GIDEP and ERAI. Seize the parts so that they do not get back into the supply chain.
There are at least a few dozen independent distributors out there that would pass the above criteria with flying colors. Align yourself with one of these reputable organizations. There are also hundreds of independents out there that don't even come close to meeting the above requirements. Avoid them like the plague, unless you want your supply chain infiltrated with sub-standard parts. If you do not avoid them, please don't blame the entire industry when you get bad parts. There are plenty of good companies out there that can support your requirements and protect you. A little due diligence goes a long way.