Sorting Out Counterfeit Electronic Parts in Russia

Counterfeit parts primarily hurt high-mix, low-volume manufacturers that produce expensive and complex equipment in small lots on a contract basis. Because of their unsteady purchasing process, these companies buy components from thousands of brands, and they can buy tens and sometimes hundreds of units at a time.

Electronic component manufacturers put such companies at the end of their client list and give up on these least valuable clients during shortages. Consequently, these companies often turn to a market of independent distributors, where they encounter many dishonest suppliers who take advantage of the open market.

This is an urgent issue for all countries producing electronics. However, bogus electronic parts hurt the Russian market the most for three reasons. First, the vast majority of Russian electronic equipment manufacturers belong to a high-risk group — they produce complex equipment by small lots on a contract basis and have specific procurement processes. The chart below shows the market segmentation by customer groups.

Electronic Manufacturers by Market in Russia

Second, a lack of skilled manpower in planning departments aggravates the difficulties in supplying such production. Third, many distributors do not follow an ethics code, making it difficult to sort out the honest suppliers, and ways for customers to exchange recommendations have just began to take shape.

Electronics manufacturers may not eliminate their purchases on the open market, because million-dollar contracts cannot wait for a couple of parts from official distributors. To reduce risk, manufacturers should work primarily with official, or franchised, distributors and dealers, leaving independent distributors as a backup.

A significant tool against counterfeiting is improving the professional skills of workers who are responsible not only for supplying, but also for manufacturing planning. Proficient work planning can cut down the amount of emergencies in the procurement process. As a first step, the Analytical Center of Modern Electronics conducts workshops such as “Supply and Inventory Management of Electronic Equipment Manufacturing” and “Electronic Equipment Manufacturing Planning.”

The most difficult issue is selecting honest electronic component distributors. No distributors working on the open market can guarantee their parts are genuine. An honest distributor would inform the customer about risks that can arise. A dishonest one would hide the risks or simply mislead the customer.

The recently founded Association of Suppliers of Electronic Components (ASPEC) suggests an ethics code for the distributors. In signing the code, a distributor accepts the responsibility for counterfeiting and disinformation. Even though the code does not have a legal effect, it helps identify companies that seek civilized market relations.

The ASPEC and the Analytical Center of Modern Electronics will conduct a seminar devoted to counterfeit components control. We would be glad to accept any recommendations for experts to perform on the seminar. Detailed information about the Russian electronic component market may be found on our Website.

9 comments on “Sorting Out Counterfeit Electronic Parts in Russia

  1. Barbara Jorgensen
    July 31, 2012

    It's no surprise the problem is as bad in Russia as the ROW. But given the large amount of military and aerospace manufacturing there, it is very alarming.

  2. ahdand
    July 31, 2012

    Good move but its hould be done quickly.

  3. obsbuyer
    July 31, 2012


    I would Google Counterfeit Conference and follow the lead of some of the leads ERAI , IDEA Training and Electronic Sour book conferences and training. I would have heavy emphasis on companies like Silicone Systems, IHS & Total parts plus tools to learn how to design out OBS and find alternates.  Focus on Planning on OBS lead-times. Create a list among those attending and try to set-up a qualified list of suppliers. Might want to take a look at Net-Components and how they rate suppliers and post inventory great tool.

  4. stochastic excursion
    August 1, 2012

    It looks like component counterfeiting is truly a global problem.  Leads me to wonder if China has a problem getting the right components for its government programs.

  5. rohscompliant
    August 1, 2012

    you are correct in your assumption. As an owner of a mid-sized independent stocking distributor we find that the rate of rfq's from companies in China has increased dramaticlly in the past 3 years. also sales to that region have increased as well. I am amused when they ask us for pictures of parts, net terms, as well as authenticity testing……..we are happy to oblige w/ the exception of the net terms.

  6. rohscompliant
    August 1, 2012

    I was in attendence at this confrence you refer to……….most informative and we are adopting many of these practices into our QC and ISO procedures.

  7. stochastic excursion
    August 1, 2012

    Why not net terms?  Is payment up front the (customary) alternative to this?

  8. rohscompliant
    August 2, 2012

    We are only doing what suppliers over there do to us when we buy from them…….what's good for the goose is good for the gander!!!!!

  9. ahdand
    August 8, 2012

    Well I too have my doubts on China and its issues. I think they are not rady for this yet but it will be interesting to see how they cope the scenaio.

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