This article originally appeared in the September issue of Procurement Pro.
Procurement professionals are uniquely positioned to prevent counterfeit electronic components from infiltrating their companies’ supply chains, fostering a future without fakes.
Counterfeit electronic components are costly, risky, and downright dangerous. A single subpar component installed in an aircraft or automotive motor can lead to catastrophic outcomes, including bodily harm, reputational damage, and the disruption of entire manufacturing lines.
From 2021 to 2022, the number of reported counterfeit and nonconforming parts went up by 35%, even though global semiconductor sales stayed the same. When multiplied across the millions of counterfeit components that enter global supply chains annually, the magnitude of the problem necessitates immediate and decisive action.
Procurement professionals serve as the first line of defence against these counterfeit components. Krishna Ganason, Fusion Worldwide’s Director of Engineering, emphasises that establishing key quality metrics related to supplier qualification, onboarding, auditing, support, and supply management is the crucial first step.
By identifying these metrics, buyers can more effectively detect discrepancies in supplier practices or product quality. “Through robust supplier qualification and risk mitigation practices, procurement professionals can maintain stringent supplier controls to ensure high levels of product quality,” says Ganason.
Six steps to take now
Combating counterfeiting requires a multifaceted approach. Here are six steps buyers can apply to safeguard their supply chains:
- Establish rigorous supplier vetting policies. Implement stringent supplier vetting procedures to prevent counterfeit parts from entering the supply chain. Scrutinise seller credentials, conduct onsite visits to manufacturing facilities, and thoroughly review supplier performance histories
- Seek quality certifications. Engage with reputable and certified distributors holding certifications such as AS6081, which reflect robust anti-counterfeiting measures. Certifications like ISO 9001 signify the presence of comprehensive quality management systems, while aerospace’s AC 00-56B standard mandates that certified distributors ensure components meet stringent safety and performance criteria
- Prioritise quality over price: Avoid the allure of the lowest price. Collaborate with electronics distributors that can demonstrate a proven track record. For instance, Fusion Worldwide’s in-house quality control inspection team customises testing solutions to meet specific customer needs, quantities, and components. The engineering team employs advanced technology to assess the durability and lifetime performance of parts
- Verify data. Ask your supplier for datasheets, certificates of authenticity, and manufacturing details. If possible, you should also verify this information with the original equipment manufacturer (OEM) to ensure the legitimacy of those documents. Put automated systems in place and use them to flag any suspicious orders, unexpected price decreases or orders that arrive from unexpected locations
- Conduct visual inspections. Spotting potential counterfeits with the naked eye is difficult, but procurement can be trained on how to identify red flags that would indicate a potential problem. Signs such as mismatched fonts, typos, or poor-quality printing on packaging are all signs that the product inside may not be what you expected
- Stay informed on counterfeit trends. As counterfeiters become increasingly sophisticated, staying ahead of their tactics is essential. Educate yourself and your team about the latest counterfeiting trends and red flags. The Electronic Components Industry Association (ECIA) is one industry group that offers valuable resources and trend data on counterfeiting
In today’s global marketplace, the risk of encountering counterfeit electronics grows daily. These counterfeits pose serious threats, including safety hazards, malfunctioning devices, and brand reputation damage. Procurement professionals can act as the first line of defence against this escalating problem, shielding their companies from the detrimental effects of counterfeit components and the myriad challenges they present.
