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Mitigating counterfeiting requires a combination of methods

Posted: 02 Jun 2014  Print Version  Bookmark and Share

Keywords:counterfeit  supply chain  product  packaging  label 

Brand reputation dictates whether an organisation survives or not. An entire end product can fail with a single counterfeit or inferior component, while crooks follow the cash. These facts present the state in which the electronics industry exists with counterfeiting.

Counting the cost

Although firm figures are hard to come by, it is generally agreed that counterfeiting in the electronics industry is a growing problem. Based on estimates culled from ERAI Inc., between January 2007 and April 2012, more than 12 million parts were involved in 1,363 incidents of counterfeiting reported to ERAI, which monitors, investigates, and reports issues affecting the global semiconductor supply chain, said Rory King, director, supply chain product marketing at IHS Inc., in a written statement.

"Most people would agree that in the '90s we saw counterfeiting, but it was less sophisticated and of poorer quality," said Tom Grace, brand protection manager for the Americas Electrical Sector at power management vendor Eaton Corp. "Now, better manufacturing techniques by counterfeiters and better efforts in creating those parts [have] made it more difficult to identify counterfeit products in the market and supply and distribution chains. I like to think that most counterfeits are traded unknowingly."

Today, understandably, aerospace and defence organisations have the highest level of awareness of the problem of counterfeiting. "Companies in aerospace and defence have stepped up to the plate and put processes in place. As a whole, they are much more aware than in the past and are doing a far better job of catching counterfeits," said Mark Snider, founder and president of ERAI. "We are finding fewer and fewer components making it into the defence contractor's supply chain."

Increasingly, though, commercial and consumer electronics OEMs are also looking at ways to identify counterfeit parts and keep them out of the electronics supply chain. "The medical and nuclear sectors are late adopters of anticounterfeiting processes," said Snider. "The commercial side is a different animal because the life cycle of products is so short and so much of it is so inexpensive. Their level of concern isn't as great as some where there is life-critical equipment."

Depending on trust

OEMs need to partner with trusted organisations when buying products. "Our first and foremost statement to the market is that you need to buy all products from the authorised channel of the component manufacturer," said David Moore, sales manager, Defence/Aerospace, for Avnet Electronics Marketing. "We have a trail of authenticity from the shelf and we provide that to the customer."

Further, authorised distributors create and maintain a clear process for handling and verifying returned products, Moore said. At Avnet, for example, low-cost and defective product returns are scrapped. Higher-cost product returns are inspected to ensure that the same product that was sent out was returned. "The final thread is that we systematically sequester those products in a way that ensures that we never pull or ship it to a defence, aerospace, or aviation customer."


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