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Testing for Counterfeits & Quality: The Rise of 3rd-Party Labs Fights Clones

The role of electronic component testing continuously matures and evolves as our historical databases and sophisticated methods of ensuring quality and functionality are improved. Additionally, and unfortunately, the state of counterfeiting also matures and demands more sophisticated testing methods, one of the recent industry discussions has been the rise of clone counterfeit parts.

Kirk Wehby, COO, Smith & Associates

Kirk Wehby, COO, Smith & Associates

To better understand the latest issues regarding component testing and the increasing importance of third-party laboratories as well as the challenges posed by clone counterfeit parts, EBN spoke with Kirk Wehby, chief operating officer for Smith & Associates, a long-standing independent distributor.  Smith & Associates, a 31-year old, global company with 2014 revenues of US $748 million also has two sophisticated and ISO/SAE industry certified, testing laboratories: one in Hong Kong and one in Houston, Texas 

Smith has taken leadership role among independent distributors to safeguard quality and ensure best-in-class product and services to its clients. Smith regularly provides quality and functional testing of products across a wide range of industries, including highly ruggedized and sensitive component and equipment testing.

EBN: What do you feel the state of electronic component testing is in the industry today?

Wehby: It is evolving in many ways. Although some days I feel like things may have plateaued on the testing side of things, and I wonder if we have reached the top of the mountain, I quickly realize there are additional tests, more equipment, new and rapidly improving technologies that we can use – not just for anti-counterfeiting, but in general. This is why I see testing as still an evolving area, not somewhere that anyone has arrived. As for the industry in general, there is still a step gap between the top tier independent distributors who put time and resources into testing, and then the bottom tier who are just paying lip service to testing.

EBN: What testing are leading edge companies requesting, and what is routine in terms of testing today?

Wehby: The routine testing is what I was referring to a moment ago is the routine that sometimes can lull someone into thinking testing isn't or hasn't changed. You keep doing many of the same tests that remain in play for two to three years. What we see changing in the routine is the addition of more climate or application of parts testing, relating back to storage and handling as well as functional requirements. We see functional testing as more of a replication of the application during use, and we also functionally test the parts for counterfeit detection, both cases we are testing them in their use-case environments, which can extend into very high temp and ruggedized conditions.

Anyone who is really taking testing seriously has all the same machines and can perform the same or similar tests on hardware, on the parts. The emerging side, for us, and much of what I'm looking into now, are application and environment testing. We're seeing both the companies who have been involved, the leading-edge customers who are looking to differentiate themselves, are pushing back on us to do more, to add on to tests and services, to provide more, and to ensure even better quality under wider use case ranges. These are all increasing demands. The industry is pushing many of the others, those not on the leading-edge, to catch up with these leaders in quality and functional standards. Today, we see that customers cannot compete in the market without having the same level of quality testing in place. The top tier, quality-driven companies continue to ask for us to evolve in testing, inspection, and consistently add on requirements such as failure analyses, or take a particular test to the next level for them.

I would say that the depth of testing requirements we see customers demanding of us is increasing and the overall customer focus is also increasing.

EBN: What types of companies are on the rise in requesting testing from Smith?

Wehby: At Smith, because we hold a solid range of industry certifications and standards, we continue to see a steady increase in requests for our testing services based on providing tests to those standards. What I've been seeing lately are the people who switch industries, such as going from automotive to electronics, and they are now taking that cross-training from one sector into another and bringing their habits of requiring more testing to more sectors, basically a cross-training within the industry. I'm seeing a lot of the same requirements for testing now across more industry sectors, some are, of course, farther down the road in terms of what requirements they request, but the momentum toward similar levels is certainly clear. There are many cross-industry discussions and that is healthy for the industry. 

EBN: How much third-party testing is really being requested in the industry today ?

Wehby: As far as third party testing, we do see growth in this area, particularly in the case of customer-owned inventory. These customers are realizing that they don't necessary know with certitude if their long-storage and handling of inventory was done properly. They have purchased end of life (EOL) product and held it because it was a last-time manufacture deal, but now they want to ensure the quality of the product before use. There has been much more exposure in the industry to these issues of storage, quality handling, and other potential issues regarding inventory holds. As a result, and as a result of many of our customers learning how we test stored inventory, they then request additional testing services on their own holdings.

EBN: Why does Smith put in so much effort, investment in personnel and equipment into testing?

Wehby: Without testing, you are Google. Anyone can Google parts and buy them. We made these important and significant investments obviously as a safeguard for our company as an independent distributor in the open market, but also as a value add for our company: what do we get from buying from Smith versus anyone else? Quality and assurance of authenticity and functional to specifications.

EBN: What are your thoughts and concerns regarding the growing discussion of clone counterfeit parts?

Wehby: Clone counterfeits are an interesting area because of the legal questions that are raised. It is not so much that clone counterfeit parts are new, the term is new, and some of the ways in which these parts are counterfeited are newer, but at the core, there are very real similarities in how we identify these parts to how we identify any counterfeit part. At the counterfeiting point, if you are changing a label on the part, the internal parts will look different or not exist. This is still a very classical case of counterfeit.

When the issue turns from counterfeit to aftermarket product represented as a manufacturer's part that becomes a slippery slope. The grey area and the interesting legal question is when a manufacturer has only been able to produce certain parts with proprietary information, then that is a line that has been illegally crossed. It is one type of clone counterfeiting. But what if a company did some reverse engineering and figured out how to build and put together something – is that counterfeiting or competition if you do NOT use the original manufacturer's name?

The question is, have you represented the parts as that manufacturer? If yes, then it is counterfeit. Have you used or procured IP to make that part without permission or payment to the original IP holder? If so, then it is counterfeit. But there is a grey area that the industry is working through of bought, reverse engineered and newly built competitive parts that clone the original OEM but are not labeled as the original OEM, they are labeled as a new competitor brand.

We see these issues and we are part of working towards new solutions. With our long-standing, historical parts database, Smith can check and make all of the possible comparisons for cloned parts. This is where the issue of application and environment come back again. Is that part what it claims to be? How does it function and how does it function in that environment? If you went to the component level, and that part was supposed to go into a specific application, will it work in that environment? There are certain serial numbers that are proprietary and that are IP for those parts to function in that application. Hence the evolution of testing is going to application and environment – clone counterfeit parts are not likely to function in those intended applications.

EBN: What are Smith's next goals and plans for your testing services?

At labs like Smith, we constantly work to be part of the solution. We are a piece of the puzzle that helps to mitigate counterfeit risks and threats. We constantly ask ourselves, what can we do help? With our goal to continue to be part of the solution, to support the customer and our industry, then we need to continue to evolve, to increase our knowledge, to maintain and recertify regularly, and in these ways help to lead the next wave of solutions.

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