Protecting Your Supply Chain from Counterfeits & Liability

Reading time ( words)

For a few years now, it has been clear that many contractors are not adding new suppliers to their approved vendors’ lists the way they once did. In adopting this policy, they fail to recognize the value of trustworthy, independent distributors. By neglecting the advantages that independent distributors can offer to the supply chain, these firms potentially do themselves a grave disservice. Despite contemporary rhetoric, trustworthy independent distributors are an essential part of the landscape of modern procurement.

In the procurement departments of modern firms, it is common knowledge that line-down situations do occur. While, in a perfect world, this would not be the case, it is an unfortunate business reality. When OEMs, OCMs, and authorized distributors cannot provide parts, procurement personnel are faced with a few choices. They can go without procuring components, leading to slowing or even halting production. Alternatively, they can attempt to locate and purchase the needed parts on the open market from independent distributors, choosing one of two options when doing so: They can purchase through “trusted suppliers” or through suppliers that have not been audited by either their organization or any accredited third-party assessments.  

For the purposes of this column, the latter category of distributors will be termed “un-vetted suppliers,” as they have not been vetted by a government organization, nor have they been certified to an internationally accredited counterfeit avoidance standard. The use of these un-vetted suppliers could potentially come with serious consequences. Recognizing the impact of utilizing such suppliers, in December of 2011, the National Defense Authorization Act (NDAA), Section 818 was signed into law. This law requires defense contractors and subcontractors to:

“Establish qualification requirements…pursuant to which the Department may identify trusted suppliers that have appropriate policies and procedures in place to detect and avoid counterfeit electronic parts and suspect counterfeit electronic parts.”

Read the full column here.


Editor's Note: This column originally appeared in the April 2014 issue of SMT Magazine.

04/02/2021 | Bill Cardoso, Creative Electron

How about a little refresher on some of the most effective techniques for component inspection using X-ray? While other visual inspection techniques provide important insight into component quality and authenticity, nothing exceeds X-ray inspection for fast, accurate, non-destructive evaluation. The following are 10 ways to identify a fake IC using X-ray.

08/25/2020 | I-Connect007 Editorial Team

Michael Ford, senior director of emerging industry strategy for Aegis Software and I-Connect007 columnist, speaks about the increasing importance of traceability in manufacturing and throughout the supply chain, including how it affects such areas as counterfeit components and inventory management.

06/05/2019 | Michael Ford, Aegis Software Corp.

With the trend of shortening lead-times within the material ordering process, and the frequency with which urgent orders for materials from the grey market are made, there is increased opportunity for the ingress of counterfeit materials. The situation is made far worse when a genuine shortage of materials in the supply chain occurs. The consequences of not being able to eliminate the risk of defects getting through into the market will be disastrous for individuals as well as for the company brand image, not to mention the associated costs of recovery. It is only a matter of time, unless something very significant changes.