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You’ve Found Counterfeit Parts in Your Order. Now What? Part 2

In spite of the industry's best efforts, counterfeit parts still enter the supply chain. In Part 1 of this article, we examined some of the options available to buyers. In Part 2, we discuss steps you can take to avoid counterfeits.

First, purchasing agents need to be smart about the companies they purchase from and recognize that there is no single “silver bullet” that will magically resolve all problems. For hard-to-find parts, it may be tempting to just search the Internet and pick a company that says it can get the component. By routing open market purchases through Independent Distributor of Electronics Association (IDEA) members, buyers can greatly reduce the risk of problems. (World Micro is an IDEA member.)

Although no organization is perfect (including IDEA), there are 10 primary requirements to membership that all must adhere to. These requirements will soon to be upgraded for additional protection of EMS/OEMs and IDEA-QMS-9090.

IDEA requires:

  1. Companies must be in business for at least three years or be owned by a parent company that has been in business for at least three years.
  2. Companies must be ISO 9001 certified by a registrar that is recognized by an accreditation body that is identified and accepted by IAF.
  3. Companies must be certified to ANSI/ESD S20.20 by an ESDA certified registrar.
  4. Companies must provide objective evidence of product liability insurance at a minimum of $1,000,000 per incident and $2,000,000 aggregate annually.
  5. A company must provide objective evidence via a copy of its quality manual that IDEA-STD-1010 is part of the company’s inspection program and documented as such in its quality management system.
  6. Companies must provide objective evidence (copy of quality management system policy/procedure) of moisture sensitivity level (MSL) management programs documented in QMS and training programs.
  7. Companies, through formal application, must be approved by a unanimous vote of the Board of Directors in quorum at the time of the vote. Companies must not have any unresolved issues that the voting quorum considers inconsistent with IDEA’s mission and Code of Ethics. Such issues include, but are not limited to, credit or NSF issues, counterfeiting parts issues, or poor business practices. At the Board of Directors’ discretion, any unresolved issues may require a written explanation followed by a subsequent review by the IDEA Board.
  8. A company must agree to abide by the IDEA Code of Ethics through signature by a member of its executive management. Application will include a copy of the IDEA Code of Ethics and a place for the company representative to sign on behalf of the company.
  9. Companies must complete at least one IDEA-ICE-3000 Inspector Certification for each ship-to-customer location, including third-party inspection sites.
  10. Companies must possess the following minimum working equipment or capability: digital camera; adequately lit microscopy; magnifiers and/or eye loupe; vacuum pen; bar code scanner; calipers; micrometers; vacuum sealer to seal humidity barrier bags.

Second, strong relationships between suppliers and their sources, and clients and their suppliers, are essential. When suppliers have in-depth knowledge of their sources, and purchasers have in-depth knowledge of their suppliers, the likelihood of counterfeit parts diminishes. In the unlikely event of counterfeit parts turning up, the channels of communications are open, and issues are easier to resolve quickly and equitably.

Buyers should:

  • Mandate traceability if parts are going into mission-critical applications
  • Purchase from suppliers that have proper counterfeit detection equipment in house — X-ray, XRF, decap, solder testing, heated solvents, and more
  • Go visit your top independent supplier. We have all heard, “a picture is worth a thousand words” and “actions speak louder than words.” You’ll be surprised what you can learn by investing the time for a basic visit or detailed site audit.

Finally, if the government wants to help, I would suggest it set up a repository where recipients of suspect parts can send them for final determination. This way, the government can know who is dealing in counterfeits, remove them from the market, and help adjudicate disputes in an objective manner.

I’m sure you may have other ideas on the best way to address this issue. I hope you will share them, and I look forward to your comments and suggestions.

3 comments on “You’ve Found Counterfeit Parts in Your Order. Now What? Part 2

  1. prabhakar_deosthali
    June 26, 2012

    nothing can be more serious than the supply chain of the DOD itself getting infiltrated with counterfeit parts, where may be the strictest norms are applied for supplier selection, qualification, inward inspection and quality control and parts traceability.

    So unless there is an insider help such infiltration cannot happen.

    My suggestion would be to hold the person resoponsible for making the buying decision guilty if  he has purchased a counterfeit part. Unless every company puts its own house in order with strcitest pusnishment for such acts , we will continue to blame only the suppliers.

  2. bolaji ojo
    June 26, 2012

    Your article focused on what independent distributors must have to get IDEA membership but as you are well aware counterfeits can enter the supply chain through many other channels, including franchise distributors (receiving contaminated returns, for instance) and contract manufacturers. What do you recommend for this group of companies?

  3. MikeRR
    June 26, 2012

    Blaming the buyer is not the solution – having QA process streams for non channel or critical high risk components is.

    As a supplier of Obsolete components, we contiually find that buyers reject the additional testing costs required to screen components and they do not have adaquate testing capabilities inhouse.

    Performing a function test on a small sample does not pretect organizations from counterfeit or refurbished goods – but unfortunately that is the approach many take.

    The unfortunate reality is that the electronic counterfeit business is lucrative and the quality of the fakes is making it increasingly harder to detect them.

    Your best protection is to work with companies that share your determination to protect your supply chain and business.

     

     

     

     

     

     

     

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