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Counterfeit Part Prevention Starts with Industry Standards

Nearly every industry, from consumer and aerospace and defense to fashion and automotive buy electronic components. These parts need to be of the highest quality, especially for applications where safety and reliability are paramount, which is why the growing number of counterfeit parts is becoming an enormous problem.

New industry standards may be the answer to preventing the spread of counterfeit parts. Let's take a closer look at these standards and the issues that counterfeit parts are creating.

Image courtesy: Pixabay

Image courtesy: Pixabay

The rise of counterfeit parts

In 2009, NASA came under fire for the use of apparently counterfeit parts in their satellites and spacecraft. While the components weren't putting astronauts or expensive satellites at risk, it cost the space agency extra money in testing and quality assurance to make sure the parts met the standards required by NASA and similar agencies.

It's important to note that the word “counterfeit” in this context doesn't mean the same thing it would if the term were applied to money. Counterfeit money is fake, plain and simple. Counterfeit parts aren't necessarily fake — they just haven't undergone the sometimes expensive safety and quality testing to ensure they meet the specified performance and standards promised by the part. In this realm, the user might be unaware of the origins of the part (who made them, how they were handled, etc.) as well as the quality (specifications, packaging, etc.) of the components.

Thirty years ago, few worried about the problem of fake parts, but, particularly with the globalization of the electronics market, this problem has only grown over the past decade. In 2011, reports indicated that more than half of the electronics distributors in the United States had encountered counterfeit parts in their dealings. In 2012, a survey conducted by the Senate Armed Services Committee found that more than one million counterfeit parts appeared in the Pentagon's supply chain — and more than 70% of those parts could be traced directly back to manufacturers in China. These components also cost the consumer electronics industry more than $250 billion each year.

As recently as 2017, the United States military estimated that nearly 15% of its supply chain is made up of counterfeit parts.

On-going improvements to industry standards

Industry groups are working to address the challenge of counterfeit components through standards. SAE International introduced AS5553A in 2009. Later on, in September 2016, the standard was revised and republished as AS5553B. Part two of this series will discuss the “B” revision in greater detail. Among other changes, the standard was greatly reduced in length, based on industry feedback that the previous revision was confusingly phrased. The newer revision loses none of its scope, however. For now, know that the AS5553 family of standards was designed to help companies avoid, detect and mitigate the damage caused by the introduction of counterfeit parts into a supply chain. The U.S. military adopted this program until 2012.

Then, in 2012, after the report detailing counterfeit parts in the Pentagon's supply chain came to light, it was apparent that changes were required to improve industry standards and the detection of these potentially unsafe parts. By 2014, the Defense Federal Acquisition Regulation Supplement (DFARS) was in place. This required all defense contractors to have a system in place that can detect and avoid counterfeit electronic parts. Contractors who fail to comply with these standards will either face fines or need to replace the questionable parts at their own expense.

These two programs together led to the creation of AS6081, which is still in use today. In 2017, DARPA also introduced the SHIELD program, or Supply Chain Hardware Integrity for Electronics Defense.

Avoiding counterfeit electronic components

While manufacturers are responsible for choosing to ignore or sell counterfeit parts, what steps can buyers take today to prevent these problem components from making their way into a supply chain?

The first step is to insist on full transparency from all suppliers. Those who aren't trafficking in counterfeit parts won't have a problem with this, while those that do should be avoided at all costs. All suppliers should also adhere to AS5553 and AS6081 standards. Buyers should take the time to investigate each supplier's best practices for preventing counterfeit components from entering the supply chain. “Manufacturers of electronic parts will perform testing as defined by the customer requirement of industry standard, utilize a number of measurement devices (including a DMM), record the data and compile that to create a Certificate of Conformance for that production lot,” said Matthew Boyd, Director of Business Development at NTS Unitek.   This will assure customers that the electronic components meet AS5553 and AS6081 standards.

In-house quality assurance practices might seem like overkill, but if some counterfeit electronic components make it into the supply chain, these practices can prevent them from making it through the manufacturing process and ending up in the hands of consumers. Suppliers should also be held responsible for any counterfeit parts they ship, either through replacement or compensation.

What's up next?

In our next piece, we'll take a closer look at the two modern primary industry standards — AS5553B and AS6081 — and how they're able to reduce the number of counterfeit parts allowed to enter the market. In spite of a growing awareness of this problem, many industries still lose billions of dollars each year in sales because of fake and low-quality parts sold under the guise of functional and useful components.

Counterfeit electronics are still an enormous problem and one that the entire industry will need to address. These components are costing companies billions of dollars every year and, in the case of the aerospace and defense industries, potentially putting lives at risk. Awareness of the problem is no longer enough. It will take a concerted effort across every impacted industry to finally put an end to these fake and potentially dangerous components.

1 comment on “Counterfeit Part Prevention Starts with Industry Standards

  1. bpcanada
    January 20, 2019

    The business model of virtually all Independent Distributors (aka brokers) is predicated on NOT revealing the chain of ownership. While admittedly the better players in that space make considerable effort to ensure they are not passing through counterfeits that does not mean that the chain of ownership is transparent. As a substantial part of their business is buying from A for less than they sell to B they do not want B to know who A is (so as to protect their share of the transaction from being eliminated). Changing this reality is non-trivial. Even if legislated in some jurisdiction(s) it would not eliminate the issue as the supply chain is global.

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