Quality     Knowledge     Reliability     Trust Managing a Complex Supply Chain – An Open Market Tools & Techniques <ul...
<ul><li>Personal History </li></ul><ul><li>President of a Full-Service Independent Distributor for over thirteen years </l...
<ul><li>COUNTERFEITING IMPACT </li></ul><ul><li>Costs Global Economy over $650 Billion/Year </li></ul><ul><li>Accounts for...
SUPPLY CHAIN IS COMPROMISED © Basel Action Network 2006 Woman cooking circuit boards over pool of molten solder. Thousands...
TYPICAL ELECTRONIC SUPPLY CHAIN OCM FRANCHISED DISTRIBUTOR BROKER/INDEPENDENT DISTRIBUTOR COUNTERFEIT SUPPLIER OEM Stock r...
Choose suppliers for your AVL that are committed to quality.   <ul><li>Addressing the Problem </li></ul><ul><li>Vendor Eva...
An Once of Prevention is Worth a Pound of Cure.  Quality Audit <ul><li>Do not be misled by brochures or well written e-mai...
<ul><li>Research Vendor Information </li></ul><ul><li>Bank & Trade References </li></ul><ul><li>D&B Report </li></ul><ul><...
Maximized efficiency and productivity.   <ul><li>Integrate Your IT System: </li></ul><ul><li>Real Time Vendor Evaluation <...
Expose hidden aliases automatically   <ul><li>Duplicate Company Information </li></ul><ul><li>Telephone number, fax number...
Quality and IT Example <ul><li>Quality Alert </li></ul><ul><ul><li>Item and Vendor </li></ul></ul><ul><li>Part Alert </li>...
Measured by professional standards.   <ul><li>Vendor Reliability & AVL </li></ul><ul><li>Approved Vendor List Example </li...
Consistent quality.  Attention to detail. <ul><li>Vendor Risk Mitigation </li></ul><ul><li>Example of Material Procured fr...
Integrate records into quality control process.  Documentation Control <ul><li>Vendor & Purchase Order Number </li></ul><u...
Quality is a major commitment <ul><li>Expect Quality </li></ul><ul><li>Component Testing Equipment  </li></ul><ul><ul><li>...
Order with confidence.   Procuring Material <ul><li>Pedigree/Traceability </li></ul><ul><li>Vendors Selected from weighted...
Aerospace Standard AS5553 <ul><li>Incorporates recognized best practices in: </li></ul><ul><ul><li>Component Management </...
COUNTERFIET PARTS MITIGATION PLAN RISK MITIGATION PEDEGREE/ TRACEABILITY AVL CONTROL & SOURCE SELECTION VISUAL INSPECTION ...
Questions? Dan DiMase Phone:  401 . 374-1914  Fax:  401 . 886-9735  [email_address]
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Counterfeit Part Avoidance

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This is a copy of a presentation I made recently at the CALCE counterfeit symposium at the University of Maryland. It addresses avoiding counterfeit parts in the open market.

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Counterfeit Part Avoidance

  1. 1. Quality  Knowledge  Reliability  Trust Managing a Complex Supply Chain – An Open Market Tools & Techniques <ul><ul><li>Counterfeit Part Avoidance </li></ul></ul>
  2. 2. <ul><li>Personal History </li></ul><ul><li>President of a Full-Service Independent Distributor for over thirteen years </li></ul><ul><li>Served as board member of IDEA </li></ul><ul><li>Chairman of IDEA Counterfeit & Substandard Parts Committee </li></ul><ul><li>President of ERAI, Inc. </li></ul><ul><li>Field Application Engineer in Franchised Distribution </li></ul><ul><li>SAE International G-19 Counterfeit Electronics Parts Committee Member </li></ul><ul><li>AIA AC-TF IPT </li></ul><ul><li>US Department of Commerce CACP Participant </li></ul><ul><li>Founding Member of and </li></ul>
  3. 3. <ul><li>COUNTERFEITING IMPACT </li></ul><ul><li>Costs Global Economy over $650 Billion/Year </li></ul><ul><li>Accounts for more than 5% of global merchandise trade </li></ul><ul><li>Loss of over 750K U.S. jobs </li></ul><ul><li>Interpol has linked counterfeiting to organized crime and terrorist financing </li></ul><ul><li>Predicted to grow over $1.2 Trillion by end of 2009 </li></ul><ul><li>Jeopardizes health & safety of consumers, national security threat, affects brand name & reputation </li></ul>The problem is not going away. Create a plan to address the problem.
  4. 4. SUPPLY CHAIN IS COMPROMISED © Basel Action Network 2006 Woman cooking circuit boards over pool of molten solder. Thousands of men, women and children handle imported electronic waste from North America and Japan in this way every day in China. Taizhou, China 2007. © Basel Action Network 2006 Circuit Board being cooked. Taizhou, China 2007 E-Waste is providing an unlimited supply for counterfeiters
  5. 5. TYPICAL ELECTRONIC SUPPLY CHAIN OCM FRANCHISED DISTRIBUTOR BROKER/INDEPENDENT DISTRIBUTOR COUNTERFEIT SUPPLIER OEM Stock rotation OCM Sale Sale Sale or RMA Sale Excess Sale RMA Sale Sale No One is Immune Sale Sale RMA RMA
  6. 6. Choose suppliers for your AVL that are committed to quality. <ul><li>Addressing the Problem </li></ul><ul><li>Vendor Evaluations & AVL </li></ul><ul><li>ISO 9001:2000 & AS 9100/9120 Certification(s) </li></ul><ul><li>Documented ESD Program & Procedures (ANSI ESD S20.20) </li></ul><ul><li>Component Traceability </li></ul><ul><li>Material Control </li></ul><ul><li>Quality IT Integration </li></ul><ul><li>Visual Inspection Program </li></ul><ul><li>Component Testing </li></ul><ul><li>Counterfeit Parts Control Plan </li></ul>
  7. 7. An Once of Prevention is Worth a Pound of Cure. Quality Audit <ul><li>Do not be misled by brochures or well written e-mails </li></ul><ul><li>Create an Independent Distributor Assessment </li></ul><ul><li>Review Broker’s Terms and Conditions prior to a purchase </li></ul><ul><li>Get everything in writing </li></ul><ul><li>Conduct Site Visit </li></ul>
  8. 8. <ul><li>Research Vendor Information </li></ul><ul><li>Bank & Trade References </li></ul><ul><li>D&B Report </li></ul><ul><li>Verify ISO9000/AS9100 Status </li></ul><ul><ul><li>http://www.qualitydigest.com/content/iso-database </li></ul></ul><ul><li>Read Blogs </li></ul><ul><ul><li>http://www.orafec.org/ </li></ul></ul><ul><ul><li>http://www.brokerlynx.net/ </li></ul></ul><ul><li>Check CAGE Code </li></ul><ul><ul><li>https://www.bpn.gov/bincs/begin_search.asp </li></ul></ul><ul><li>Search GIDEP & ERAI </li></ul><ul><li>Review Vendor Website </li></ul><ul><li>Google Earth Satellite View of Vendor Location/Warehouse </li></ul>
  9. 9. Maximized efficiency and productivity. <ul><li>Integrate Your IT System: </li></ul><ul><li>Real Time Vendor Evaluation </li></ul><ul><li>System Reports Tied to Vendor for Real Time Performance </li></ul><ul><li>Items Should Have Full Traceability to Originating Vendor </li></ul><ul><li>Number of Purchase Orders </li></ul><ul><li>Number of Nonconformance's </li></ul><ul><li>Number of RMA’s </li></ul><ul><li>Total Dollars/ High Dollars </li></ul><ul><li>+/- Delivery Date </li></ul><ul><li>Employee and Industry Comments </li></ul><ul><li>System Checks to Link Aliases </li></ul>
  10. 10. Expose hidden aliases automatically <ul><li>Duplicate Company Information </li></ul><ul><li>Telephone number, fax number, & cell phone </li></ul><ul><li>E-mail address & website </li></ul><ul><li>Bank account numbers & beneficiaries </li></ul><ul><li>Federal ID number, state tax resale certificate, & VAT </li></ul><ul><li>UPS, FedEx and DHL account numbers </li></ul><ul><li>DUNS number </li></ul><ul><li>CAGE code </li></ul>
  11. 11. Quality and IT Example <ul><li>Quality Alert </li></ul><ul><ul><li>Item and Vendor </li></ul></ul><ul><li>Part Alert </li></ul><ul><li>Shipping/Receiving Alert </li></ul><ul><ul><li>Customized Per Required Specifications </li></ul></ul><ul><li>Popular Part Alert </li></ul><ul><li>RoHS Database </li></ul><ul><li>Special Instructions </li></ul><ul><li>Vendor Knowledge Database </li></ul>Quality is a full-time commitment.
  12. 12. Measured by professional standards. <ul><li>Vendor Reliability & AVL </li></ul><ul><li>Approved Vendor List Example </li></ul><ul><ul><li>Approved – Select Franchise Distributors and Manufacturers Direct </li></ul></ul><ul><ul><li>Provisional – Vendors with a Proven Quality Record </li></ul></ul><ul><ul><li>Trial – Vendors with Limited History </li></ul></ul><ul><ul><li>Quality Alert Vendor – Vendors with an Unproven Quality Record </li></ul></ul><ul><ul><li>Disapproved – Vendors with Reported Problems </li></ul></ul>
  13. 13. Consistent quality. Attention to detail. <ul><li>Vendor Risk Mitigation </li></ul><ul><li>Example of Material Procured from QC Alert Vendor </li></ul><ul><ul><li>Datasheets Pulled for all Parts </li></ul></ul><ul><ul><li>Minimum of Two Inspectors Review Material </li></ul></ul><ul><ul><li>Scrutinized from Order Process through Receiving </li></ul></ul><ul><ul><li>System Alerts for QC Alert Vendors </li></ul></ul><ul><ul><li>Testing as Required </li></ul></ul>
  14. 14. Integrate records into quality control process. Documentation Control <ul><li>Vendor & Purchase Order Number </li></ul><ul><li>Manufacturer Part Number, Manufacturer, & Total Quantity </li></ul><ul><li>Date Code, Lot Code, & Serialization (if available) </li></ul><ul><li>Quantity Breakdown per Package </li></ul><ul><li>Package Type (tubes, trays, reels, etc.) </li></ul><ul><li>Factory Packaging or Third Party </li></ul><ul><li>RoHS Status (Yes, No, Unknown) </li></ul><ul><li>Country of Origin </li></ul><ul><li>Pictures of Item and Packaging </li></ul>
  15. 15. Quality is a major commitment <ul><li>Expect Quality </li></ul><ul><li>Component Testing Equipment </li></ul><ul><ul><li>Memory Testers </li></ul></ul><ul><ul><li>Programmable Parts Testers </li></ul></ul><ul><ul><li>Inductors, Resistors, and Capacitor Measurement Equipment </li></ul></ul><ul><ul><li>Digital and Analog IC Testers </li></ul></ul><ul><ul><li>Hard Drive Test Equipment </li></ul></ul><ul><ul><li>RoHS – XRF Machine </li></ul></ul><ul><li>ESD Equipment </li></ul><ul><ul><li>Grounded workstations </li></ul></ul><ul><ul><li>Humidity Control </li></ul></ul><ul><ul><li>Ionizers </li></ul></ul><ul><li>Visual Inspection Systems </li></ul><ul><ul><li>Digital Microscopes &Video Capture </li></ul></ul><ul><ul><li>X-Ray </li></ul></ul>
  16. 16. Order with confidence. Procuring Material <ul><li>Pedigree/Traceability </li></ul><ul><li>Vendors Selected from weighted AVL </li></ul><ul><li>Real Time Vendor Performance </li></ul><ul><ul><li>Approved </li></ul></ul><ul><ul><li>Provisional </li></ul></ul><ul><ul><li>Trial </li></ul></ul><ul><ul><li>QC Alert </li></ul></ul><ul><ul><li>Disapproved </li></ul></ul><ul><li>Visual Inspection </li></ul><ul><li>Testing as Required </li></ul><ul><li>Documentation Control </li></ul>
  17. 17. Aerospace Standard AS5553 <ul><li>Incorporates recognized best practices in: </li></ul><ul><ul><li>Component Management </li></ul></ul><ul><ul><li>Supplier Management </li></ul></ul><ul><ul><li>Procurement </li></ul></ul><ul><ul><li>Inspection </li></ul></ul><ul><ul><li>Test/Evaluation Methods </li></ul></ul><ul><ul><li>Response strategies when suspect or confirmed counterfeit components are detected </li></ul></ul>
  18. 18. COUNTERFIET PARTS MITIGATION PLAN RISK MITIGATION PEDEGREE/ TRACEABILITY AVL CONTROL & SOURCE SELECTION VISUAL INSPECTION & TESTING MONITORING & REPORTING OBSOLECENCE MANAGEMENT DISPOSITION MATERIAL CONTROL & DISPOSAL GLOBAL SUPPLY CHAIN
  19. 19. Questions? Dan DiMase Phone: 401 . 374-1914 Fax: 401 . 886-9735 [email_address]

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