About 20 years ago, state-of-the-art microprocessors were the main target of both theft and counterfeiting efforts. Now, more than half of counterfeit-part reports involve obsolete parts — those that have outlived their usefulness, at least as far as suppliers are concerned.
A total of 57 percent of counterfeit-part reports from 2001 through 2012 have involved obsolete or end-of-life (EOL) components, according to IHS. Another 37 percent were active — or still in production — devices.
There are a number of reasons end-of-life (EOL) parts are popular with counterfeiters. As military and aerospace companies have moved toward using commercial off-the-shelf (COTS) devices, the lifecycle of these products have fallen out of sync with the end product. Military and aerospace equipment is designed for the long haul — 30 or more years of useful life — while components reinvent themselves on an almost annual basis. Rather than losing their value, obsolete/EOL parts for military/aerospace applications are more in-demand the moment they are discontinued. Desperate buyers are willing to pay top dollar for these parts if they haven't planned for EOL.
IHS outlines in a press release some of the other reasons EOL has accelerated in recent years. Rory King, director of supply chain product marketing at IHS, said:
- Changes in the supply base — like the enactment of a regulation such as the European Restriction of Hazardous Substances Directive (RoHS) — can result in diminishing manufacturing sources and material shortages (DMSMS). When RoHS came into force in 2006, 20 percent of all components were discontinued above and beyond what buyers were expecting. Another 20 percent of components were unexpectedly discontinued in 2007. Manufacturers attributed these events specifically to the shift to lead-free components. If a product is 20 or more years old, you simply can’t avoid obsolete parts, which are prime breeding ground for counterfeits.
Even new systems can be subject to the obsolete-part problem. In one dramatic example, more than 70 percent of the components used in a surface ship sonar system were obsolete — even before the first system was installed.
IHS reiterates the necessity of obsolescence planning, but acknowledges the challenges as well. EOL planning is only part of the solution. King added:
- To explicitly address counterfeit parts head-on, organizations must understand which counterfeit parts are actually in circulation and being reported, regardless of whether they are obsolete or active. Furthermore, constant vigilance in supply planning for parts is necessary to stay ahead of component price and supply chain health issues and to ensure continuity of supply from safer, approved and trustworthy part sources.