Caveat emptor . Let the buyer beware. That's the theme of EBN's upcoming chat with distributor Components Direct. We'll be discussing the growing problem of counterfeit components and how to spot them.
Counterfeit electronic components are appearing with increasing frequency, according to IHS. Based on a conservative estimate, a total of 1,336 verified counterfeit-part incidents have been reported for transactions involving a minimum of 834,079 purchased parts in 2012, the market research firm says.
Over time, these figures translate to a substantial risk to the electronics supply chain and the critical industries associated with it. A 2012 study by IHS found that more than 12 million counterfeit electronics and semiconductor components have entered the distribution chain since 2007, with 57 percent of all counterfeit parts obsolete or end-of-life components.
“Counterfeit parts represent a serious and growing risk to the electronics supply chain in general and to the aerospace and defense industry in particular,” said Rory King, director of supply chain product marketing at IHS, in a written statement. “Each month that passes, more than a hundred counterfeit incidents comprised of thousands of suspect parts are reported.”
As counterfeiters get more sophisticated, no one is immune to the problem. Components Direct, which supplies both analog and digital devices, found more than 124 million units of its product floating in the gray market across 6,500-plus part numbers and a variety of date codes.
However, the supply chain is not without recourse. The first step is to understand the problem and its complexity. On Thursday, August 15, we'll be talking about the most common methods of creating fake parts, and how to identify those bogus parts.
We'll also be taking about how to avoid imitation parts — primarily by partnering with and buying from authorized, manufacturer-direct suppliers. According to a May 2012 report by the Senate Armed Services Committee, titled “Inquiry Into Counterfeit Electronic Parts in the Department of Defense Supply Chain,” an “overwhelmingly majority” of the more than 1 million counterfeit parts identified in an investigation of the DoD's supply chain were sourced from a party other than the original manufacturer or its authorized distributor.
We'll also look at best-practices for purchasing and learn how organizations can set procurement policies to safeguard themselves against counterfeit parts. For example, when evaluating an authorized supplier, a buyer should look for attributes such as traceability, control of records, and inventory documentation, Components Direct told EBN. Limited reporting, minimal record-keeping, and a lack of information-sharing compound the counterfeit issue, a 2010 report from the US Department of Commerce noted.
We've invited Anne Ting, executive vice president of marketing, and Steve Martin, executive vice president of sales, from Components Direct, to field your questions and help generate conversation around this important topic. We'll be gathering in the EBN chat area at 2:00 p.m. EDT (11:00 a.m. PDT) on Thursday, August 15. Hope to see you there! In the meantime, feel free to post comments, thoughts, and questions below.