What To Do When You Receive A Counterfeit Part

Plan for the repair of the computer, a notebook with a hand hold

What To Do When You Receive A Counterfeit Part

With increased complexity in the authorized and independent  supply chain, it is highly likely you will run across counterfeit electronic components at some point. Here are some important steps to take as well as questions to consider when you do receive counterfeit parts.

  1. Should you keep the supplier on your approved list? When receiving a counterfeit part, our tendency may be to immediately terminate the supplier. Although that is likely the correct course of action, consider their role in the event. Could they have performed the proper inspection to detect the counterfeits if your organization had paid extra for in depth testing (X-ray, XRF, decapsulation, etc.)? If so, perhaps a probationary period with some changes to your test requirements would make sense as opposed to wholesale elimination.
  2. Can you, or should you return the counterfeit electronic components back to the supplier? It is illegal to ship counterfeit goods, whether you are the buyer returning them or the original seller. The parts should be permanently destroyed to avoid future use. However, you may want to keep some of the counterfeit parts for future reference and comparison, especially if you need them for legal purposes. If you decide not to return the parts, you want to ensure the supplier will not charge you, as they were unusable. Hopefully your organization did not pay for the parts in advance. If the supplier demands that the parts to be returned and you decide to send them back, you should do your best to confirm that the supplier is not intending to put them back in the marketplace, potentially harming another organization.
  3. Is the rest of your supply chain safe from counterfeits? Once you have had your eyes opened to the reality and implications of counterfeits in your products, you will likely want to look at which of your other suppliers may also be a risk for your organization.  The first group of suppliers to audit would be your non-authorized distributors.  Are they certified to counterfeit mitigation standards, do they have the proper test equipment and engineers to use the detection tools, and if a counterfeit did get through in the future, would their warranty and insurance policy cover the costs? Next to on the list to audit would be the authorized channel.  There are a growing number of authorized distributors going outside of their manufacturer direct channel to supply parts to their customers.
  4. Could the same supplier have shipped you counterfeits in the past? Upon receiving counterfeit parts from a supplier, it’s a good time to go through and audit your inventory for parts previously received from the same supplier. If they are already on boards and in the field, are you having a high failure rate? Counterfeits may be the culprit.  
  5. At what point were the counterfeits detected? Depending on when and where the counterfeits were detected, you can evaluate how your counterfeit avoidance program is performing. If they were caught at your distributor, your program gets an A+.  If they were found in products already in the field, you better get to work to bring your up your F or you are going to fail. 
  6. Should you engage or inform the end-use customer or does it not affect them? There is a lot of value sharing detected counterfeits with your customer. If they actually received the product, there is no question that they must be informed.  If not, the information is still helpful for the customer so they can consider re-designing, adding test parameters to mitigate risk, and enlightening them so they don’t buy the same parts from another supplier in the future.
  7. Does your company or a government entity require you to report the counterfeits to the broader industry? If your organization is supplying the U.S. government with products, it is highly likely that there is a requirement in your contract to report the information to GIDEP or other relevant reporting agencies. By doing so you are helping the broader industry avoid the dangers of counterfeits as well.
  8. Do you have procedures in place to catch similar counterfeit electronic components next time? If you have found one counterfeit, who knows how many others have made it through to your products. There is no time like the present to put an end to the possibility of receiving more. This can be a fairly pain free process if you use the right partner to shield your company. Niche distributors, like AERI, do much of the counterfeit risk mitigation work for free when purchasing your products from them. Alternatively, you can send your QC team to conferences and training seminars in an attempt to gain the necessary knowledge that the niche distributors already have. 

These are tough questions that our team wrestles with on a regular basis. We have answered these questions and more for countless companies who have found themselves in this unfortunate position. It is important to continually vet your suppliers and work only with those who maintain the highest standards and reputation. There are many factors involved to avoid the receipt of counterfeit parts. Make sure you consider all the aspects, and most importantly, contact known experts if you need help navigating the challenges.

How to Approve an Independent Distributor

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Adding an Independent Distributor to your AVL should be done with extreme caution.  Although there are cases of counterfeits being supplied by Authorized Distribution, the risk is much higher from the Independent channel.  Here are some guidelines we have used with much success.

  1. Require certifications. A good mix to assure proper traceability, handling safety, and counterfeit detection skills is; ISO9001, AS9120 Aerospace Distribution, AS6081 Counterfeit Detection, and ANSI/ESD S20-20.2014 to protect parts from ESD damage.
  2. Perform a reference check with some of their well known customers. Any good supplier will have a few contacts for you to contact and ask a few questions.
  3. Minimum of a 1 year warranty to assure that once you start using the parts you have return ability if there are problems.
  4. Membership in a few important trade groups, such as; IDEA, ERAI, and GIDEP. These groups all remove members for poor business conduct. 
  5. Established a minimum of 5 years.
  6. There are no legitimate reports of counterfeits within the last 5 years, sources (GIDEP, ERAI, IDEA, etc.).

This is not an exhaustive list, but this will narrow down your suppliers to the few that you need.  For the most part Independent Distributors are fishing in the same pond.  The difference is that if you use a supplier with all of the traits above they will not provide you with parts that are in poor condition or counterfeit.  Select just a few good suppliers and ignore the masses of bad ones.  They will find you what you need and if they can’s you really don’t want the parts.

3 Reasons you need to attend a counterfeit electronic component conference and which ones to attend

counterfeit conferences

3 Reasons You Need to Attend a Counterfeit Electronic Component Conference

With alarming numbers of counterfeit electronics entering the supply chain, you are likely aware that there are multiple counterfeit electronic component conferences held globally to help combat the problem. If you haven’t been to one yet, or you need some encouragement  to attend again, here are 3 reasons to head to another and some recommendations of which conferences you may find most helpful.


  1. Counterfeit parts are rampant and on the rise.

It’s important to know the latest in counterfeit part trends so you aware and informed, therefore best positioned to mitigate any risks with your own manufacturing supply chain. Many problems can be avoided by just knowing what counterfeiters are up to in the marketplace.

  1. You will learn important tips and tricks.

Many of these conferences will help you learn how to spot counterfeit parts and detect potential issues before they make it onto your manufacturing floor.

  1. Meet business critical partners.

These conferences are fantastic venues to meet new partners who can potentially transform your supply chain dynamics and therefore your business.  Many of the organizations in attendance are thought leaders in counterfeit detection, mitigation, and problem resolution. It’s imperative to align with the right partners which have years of experience solving supply chain and counterfeit part issues. In some cases the right partner can save you from the loss of a customer, a lawsuit, or even worse, life or death.


There are a number of different venues in which you can learn more about counterfeit electronic components. Each one has its own distinct value. Depending on your needs, you may attend one or more of the following conferences or training courses. Here are some of the most reputable events that I recommend and often attend myself.

Counterfeit Chip with skull and cross bones

Counterfeit Avoidance

CCAW – Counterfeit Components Avoidance Workshop (Hosted By Components Technology Institute, Inc

  • Held annually in different U.S. locations
  • Very focused on counterfeit electronic components detection
  • Great detail on how to detect counterfeits
  • Knowledgeable veteran teachers from the manufacturing industry
  • Perfect forum to send new electronic components inspectors

Symposium on Counterfeit Parts and Materials Logo

Symposium on Counterfeit Parts and Materials (Hosted by CALCE and SMTA)

  • Held each June in Maryland
  • High level overview of counterfeit electronic components issues
  • Introduction of potential tools to detect counterfeits
  • Outlines of different quality standards available for the industry
  • Workshops offered separately to learn counterfeit detection techniques

diminishing manufacturing sources and material shortages convention 2017

DMSMS Conference (Diminishing Manufacturing Sources and Material Shortages)

  • Held annually in different U.S. locations
  • Government contract focused
  • Not specific to counterfeit electronic components
  • Addresses a breadth of obsolete component and mechanical part issues
  • Counterfeit electronic component topics peppered into overall schedule

Electronic resellers of america inc ERAI logo

ERAI Executive Conference

  • Held every other year in different U.S. locations
  • Heavy focus on independent distributor issues
  • Addresses counterfeits as well as other customer/supplier issues
  • Workshops offered separately to learn counterfeit detection techniques

IIOM forum anti Counterfeitng

International Institute of Obsolescence Management Conference(Formerly Component Obsolescence Group)

  • Held annually in the United Kingdom
  • Broad obsolescence topic range, which includes counterfeit electronic components
  • Heavy focus on UK and European issues and organizations
  • Don’t miss the Gala dinner, which is always in a beautiful historic venue

Independent Distributors of Electronics Association logo

IDEA Training Courses(Offered by EPTAC)

  • Held multiple times a year in different U.S. locations
  • Hands-On courses designed for technicians which receive electronic components
  • 1 day and 2 day courses offered
  • IDEA has the most well established document for the receiving of electronic components from the independent distribution channel, which is used during training

Latest News on self driving cars

self driving cars

AERI supports self driving car development.  News about the progress of self driving cars never ends.  One great website to see it all is Spectrum.  In our efforts to help this technology along, we have been assisting many of manufacturers with their current products, which are already on the road, as well as their development engineers, which need the latest electronic components on the market.  We partner with our customers offering them solutions to buy safely (avoiding counterfeits).

Solutions to Avoid Disruptions in the Electronic Component Supply Chain

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Your business depends on a fluid and consistent supply chain. Without an efficient supply chain and timely availability of parts, your business growth and profitability are at risk. This past year the electronic component supply chain has been hit by a number of disruptive events, some of which could not be foreseen or controlled. A few of these notable events were;

  • First, an earthquake, in an important semiconductor region of Japan, greatly effected production at Renesas Semiconductor, Sony Semiconductor, and Mitsubishi facilities
  • Also, a cluster of quality issues at Amphenol Aerospace caused the company to halt distribution of many products as well as lay off over 90 people.
  • Additionally, one of the industries largest distributors, Avnet, struggled with the implementation of their new ERP system, causing them to delay shipments and double ship orders, which contributed to a cycle of other negative consequences.

As you may have experienced the repercussions of these few events first hand, or others like them, you know the impact it can have on your business. However, there are a number of ways to prepare for disruptions in the supply chain prior to an event. The smartest way to minimize disruption is to pre-prepare your contingency options for sourcing alternative materials. Doing your research by interviewing reliable alternative materials providers could be the difference between continued up time or a manufacturing disaster. Then begin to build partnerships with your emergency supply chain resource partners and proactively create contingency plan scenarios if resource needs were to arise.

When picking an electronic components supply partner, it’s critical to evaluate a few aspects of their business. Consider the time they have spent in their industry. It is important that the organization has years of experience solving nearly any type of supply chain crisis or disruption? Also, investigate their quality system by performing an audit.  Many of the alternative sources are not souring their parts from the manufacturer directly, therefore it is essential that you understand their quality processes. Make sure to take a close look at their counterfeit mitigation plan, as a counterfeit would lead to even worse circumstances than a lack of supply. Ideally a supplier would be certified to the AS6081 counterfeit avoidance standard in order to give you peace of mind. Lastly, ensure they are able to source and deliver in a timely manner. Some of the most reputable suppliers have multiple offices around the globe to maximize the availability and speed of delivery to key partners in critical need.

So with prior planning and proper vetting of supply chain partners, manufacturing down time can be minimized, or even avoided. Naturally, the less down time, the more profitable and efficient your manufacturing operation can be. The end result will be a stellar business reputation and a satisfied executive management team. Investigate those potential partners and put your plans in place to secure your production line.

AS6171 Counterfeit Detection Methods Standard Finally Released

SAE

What you need to know about the newly released AS6171 Counterfeit Test Standard

 

The Long Awaited AS6171 Counterfeit Test Method Standard has recently been published. After more than 7 years of development, the AS6171 has finally been released and promises to standardize practices across the industry. Many in the industry have been impatiently awaiting its arrival as, until this standards creation, there has not been a detailed procedural document for many of the in depth counterfeit methods currently being deployed in the industry (X-ray, XRF, decapsulation, SEM, SAM, etc.)

The Good News

The AS6171 Counterfeit Test Method Standard will give test engineers a trusted path and standardized guideline to verify an electronic component’s authenticity. This detailed instructional manual was developed by an industry cross section of leading engineers and subject matter experts in their particular fields. The volunteer development team has spent thousands of hours studying and determining the most important tests necessary to assess the authenticity for any given component. The standard answers the following questions:

• How to assess risk based on the application and the origin of the parts?
• What depth of testing should be applied based on the assessed risk?
• What test method should be executed on which type of part?
• How exactly should the test be performed?
• What equipment is necessary?
• How should the test operators be trained to assure proficiency?

The Questionable News

Having these answers is great for many in the industry, but not everyone is excited. There are some contentious issues related to certain aspects of the document. First, is the cost of the tests suggested. Now that this is an official industry standard, many in the industry will make these recommended tests mandatory for their suppliers. The level of engineering expertise and equipment costs to perform the testing is significant. For large companies, that have likely already created counterfeit electronic component test plans on their own, being forced to utilize another procedure may end up being counterproductive and more expensive.
Additionally, there are differing opinions on risk assessment methods to determine when and how to test a product. The risk evaluation tool developed for the AS6171 has had some criticism. If a risk assessment tool is not well designed an organization may pay excessive testing fees to test components destined to play a non-critical role in, for example, a Department of Defense coffee maker. However, of greater concern is, for example, a critical component in an aircraft may not get the proper testing based on the risk tool’s lack of accuracy.

Now that the AS6171 is finally published we can all begin to openly evaluate its value to the industry as well as address the possible pitfalls. The development committee already has a list of edits and additions to add to the next revision and will certainly improve the standard with each generation. This new standard is a compliment to the already existing group of SAE counterfeit mitigation standards (AS5553, AS6081). We can now potentially benefit from additional common language and industry evaluation of standards. Post a comment below to share your thoughts on the release of this AS6171 standard.

For more information on the AS6171 or to buy a copy, visit http://standards.sae.org/as6171/. Keep in mind when purchasing the document, that there is a main document and a “slash sheet” for each test method to explain the procedures in detail. Each slash sheet must be purchased separately.

AERI President to Present on AS6081 at DMSMS 2015 Conference

DMSMS 2015

The DMSMS Conference is a place where the government and its contractors come together to learn best practices for the management of "Diminishing Manufacturing Sources and Material Shortages"  AERI President, Robb Hammond, will be presenting a comprehensive overview of the AS6081 standard, which was created to provide guidelines for independent distributors of electronic components to avoid counterfeits.  The AS6081 standard, and an associated electronic component distributor, are integral pieces of a materials shortage plan.  If you or your company is concerned about the possibility of receiving counterfeit electronic components from your component distributor, AERI can help you come up with a plan to help you mitigate the dangers of a counterfeit escape.  For more information, please contact one of our search experts.  To find out more about the DMSMS 2015 conference, please visit http://www.dmsmsmeeting.com/index.html

AS6081 Speech Given by AERI President at SMTA/CALCE Symposium on Counterfeit Electronic Components

 

This video is a comprehensive overview of the AS6081 standard, which was created to provide guidelines for independent distributors of electronic components to avoid counterfeits.  If you or your company is concerned about the possibility of receiving counterfeit electronic components from your distributor, this video will help guide you in how to utilize AS6081 to  encourage safe buying practices.

 

Obsolete Electronic Components Help Maintain Long Revenue Stream

Distributors of Obsolete Electronic Components are able to help equipment makers continue to add revenue long after they made the initial sale.  This income is much larger for manufacturers than one might think.  Read to find out more on how to take advantage of this trend here.

AERI President to Speak about AS6081 Standard at CALCE/SMTA Counterfeit Conference

CALCE SMTA


AERI has been integral in the creation of SAE's AS6081 counterfeit avoidance standard and has been chosen to share about its creation, evolution, and current utilization by a AS6081 certified distributor.  The most important conference, specifically geared towards counterfeit electronic components, is the annual SMTA\CALCE  "Symposium on Counterfeit Parts and Materials"  Each year, hundreds of attendees, which include subject matter experts, government representatives, prime contractors, and original equipment manufacturers come together to share and learn more about the most alarming issue facing the electronic component industry.  Please join us at this essential counterfeit conference June 23-25th.  For more easy to understand information on how all of the counterfeit standards work together and why each one is significant, please click here.