ERAI Executive Conference Executive Brief - “The Big Picture” of Compliance, Counterfeits, and Continuity: How obsolescence, environmental compliance, and counterfeits are all linked to potential DMSMS, price/availability, design, and supply chain dis

The Big Picture

End-to-End Supply Chain and Design Capabilities to
Mitigate Risk and Enable Performance
Rory King, Director Design & Supply Chain, IHS
Glenn Bassett, VP Strategy, Design & Supply Chain, IHS
Mark Snider, President and Co-Founder, ERAI Inc.
April 29, 2011

IHS Inc.
A Leading Information Provider

• Founded in 1959, IHS is a leading source of information and expert analysis in
pivotal areas shaping today’s global businesses

• Employs 4,400 colleagues in 30 countries who speak 50 different languages

• IHS customers include nearly 70% of the US Fortune1000 and 80% of the
Global Fortune 500

• Tens of thousands of customers and hundreds of thousands of end-
users in over 100 countries
• Public (2005) NYSE: IHS

• FY10 revenue $ 1,075 million

2

Just a few of our clients
Thousands of users globally

Avid

Current Pressures: Counterfeiting a Priority
Early in 2011 top senators launched the investigation

“The presence of counterfeit
electronic parts in the Defense
Department’s supply chain is a
growing problem that government
and industry share a common
interest in solving.”
Carl Levin, D-Michigan, and
Sen. John McCain, R-Arizona
March 2011

Copyright © 2011 IHS Inc. All Rights Reserved. 4

Current Pressures: Japan Crisis
Japan produces roughly 60% of silicon wafers globally

Semiconductor Fabs
Silicon Wafer Production 3 1 Aizu Wakamatsu, Fukushima
A Shin-Etsu Kamisu, Ibaraki  ON Semiconductor (Logic)
 Fujitsu (Analog, Discrete, Memory)
B Shin-Etsu Nishigo, Fukushima  Texas Instruments (Analog, Optical)
2 Atsugi, Kanagawa
C MEMC Utsunomiya, Tochigi
6  Mitsumi (Analog, Logic)
D SUMCO Yonezawa, Yamagata 3 Goshogawara, Aomori
 Renesas (Logic)
13 10 9
4 Gunma
11
Display Manufacturing D  ON Semiconductor (Discrete, Logic)
 Hitachi Displays 1 Epicenter  Renesas (Analog, Discrete)
 Panasonic LCD B 5 Hitachinaka, Ibaraki
 Tohoku Pioneer  Renesas (Logic, Micro, Memory)
6 Iwate
4
14 Fukushima  Fujitsu (Micro, Memory)
Resins, Films, Chemicals, 12 C  Toshiba (Discrete)
Copper Clad Laminate… 5 7 Kofu, Yamanashi
8 A
7  Renesas (Analog, Logic, Micro)
2 Tokyo 8 Miho, Ibaraki
 Texas Instruments (Analog, Optical)
9 Miyagi
 Fujitsu (Logic, Micro)
 Rohm (Discrete, Micro)
10 Sendai, Miyagi
 Freescale (Logic)
11 Shiroishi, Miyagi
Source – IHS iSuppli  Sony Semiconductor (Logic)
12 Tsukuba, Ibaraki
 Rohm (Discrete)
13 Tsuruoka, Yamagata
 Renesas (Logic)
14 Utsunomiya, Tochigi
 Matushita (Discrete)


Current Pressures: Environmental Compliance
Regardless of exemptions these have a ripple effect on materials used

Bisphenol-A “BPA Free” Customer RFP
China RoHS
Full Material Disclosure
EU RoHS Recast Energy Priority Declarable Substances List
(ASD PDSL)
Toxic Substances Control Act (TSCA) Waste Greenpeace
Health Canada / Canada’s Chemical
SIN List - Substitute It Now! Management Plan
EU REACH & SVHC
Security US California Proposition 65
Hazardous ISO 14064 GHG Standards
DEHP-Free Norway PoHS
UN Stockholm Persistent
Substances Organic Pollutants (POPS) Air Safety
Argentina RoHS Product Content Disclosure
EU RoHS and WEEE Thailand’s “RoHS”
EU Battery Directive
Directives
Japan Green ENERGY STAR Carbon Disclosure Project (CDP)
Volatile Organic Compounds
US FDA
Electronic Product Environmental Natural Resources
Regional Greenhouse Gas Initiative (RGGI)
Assessment Tool (EPEAT)
Health
PCF - Product Carbon Footprint
Conflict Minerals
Water Lifecycle Assessment (LCA)
EU Medical Device Directive
Environmentally Preferred Products (EPP)
US EPA Executive Orders


Example: Impact of Environmental Compliance
on Through-Life Obsolescence Management

Product Lifecycle Stages
Maturity
Decline

Growth Phase-Out

Introduction Obsolete

The Supply Chain Problem
Optimizing supply to meet demand.
Business Pressures Influencing
Products
Products Drivers of innovation and lifecycle decisions.

Parts/Materials


Example: RoHS’ Unplanned Lifecycle Impact
2M+ new parts. Major part changes. Cause of over 20% EOL in ‘06-07.
End of Life (EOL)
Specific to RoHS/Pb-free Environmental Compliance

EOL

2003 2004 2005 2006 2007 2008 2009

Product Change Notices (PCN)

PCN

2003 2004 2005 2006 2007 2008 2009

New Product Introductions (NPI )
Specific to RoHS/Pb-free Environm ental Com pliance
Market Shift
to EU RoHS

NPI

2003 2004 2005 2006 2007 2008 2009

RoHS in Force July 1, 2006

Economic Recession Imposed Major
Lifecycle Disruptions
Gross EOL by MONTH 2008 Gross EOL by YEAR ENDING 2004 - 2009
EOL by MFR due solely to
EU REACH SVHC 619 demand/sales forecast.
Lehman files Published
Chapter 11

206

0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2004 2005 2006 2007 2008 2009

Economic Recession and Chemical Restrictions:
The two most dominant factors in the 300% increase of End of Life (EOL) for electrical components exiting 2008.
Source: IHS Component Insight, 2010
4

Effect: Material Shortages and
Increased Lead Time (among other things…)
August 5, 2010

Recession triggered large inventory reductions –
primary reduction in non-compliant parts employed
by medical device companies

Shortages of key electronics components…
became pronounced in the first quarter FY10,
and continued in the second.

General Electric Co. said supply constraints for
electronic components used in its healthcare
equipment cost the company $50 million in
sales for the quarter.


Implication: Rising Lead Time = Key
indicator for Increased Counterfeit
Activity
"They ground aircraft and impact airplane safety.”

What do counterfeits do Incidents Continue to Rise
Increase warranty/maint. costs 65%
Reduce expected product life 64%
Inhibit sales / customer satisfaction 62%
Add to individual unit costs 51%
Increase development time/costs 38%

What do counterfeits cause?
Product quality/reliability failures 84%
Customer returns/recalls 67%
Production line stoppages 57%
Product launch delays 36%

What do counterfeits impact?
Damage brand / reputation 71%
Product safety / legal liability 55%
Expose contractual liability 42%
Compromise security 37%
“Jeopardize our missions
Undermine compliance claims 44% and soldiers safety.”
Source: “Benchmarking Counterfeit & Inferior Grade Components”,
Supply & Demand Chain Executive, 2009
Copyright © 2011 IHS Inc. All Rights Reserved.
11 11

Correlation: Counterfeits and EOL
Obsolescence and allocation pose significant risk

Source: IHS Inc. 2011


Conclusion: RoHS Was Very “Costly”
Compliance is really not the issue – Obsolescence risks are…

COMPLIANCE (explicit) SUPPLY CHAIN & DESIGN COST
Fines, Penalties, Recalls, Data, IT, Supplier Evaluation…. Obsolescence, Supplier Viability, Material Shortages, Continuity

Regulatory event = $160M+ government
Japanese
seizure of 1M+ product units due to high
Electronics OEM
cadmium concentration levels found in
Recall
system cables suspected to violate EU law.

Design reliability = $1B+ recall logistics,
US Consumer warranty extensions, excessive
Products OEM rework/repair, while customer loyalty dipped
Recall to resolve reliability issues causing hardware
failure.
Source: UK MOD

SUPPLIER/MATERIAL COSTS SAFETY & SECURITY COSTS
Price Variance, Manufacturing Processes, Inventory/LTB… Reliability, Tin Whiskers, Counterfeits…

Tin Whisker Images Courtesy of the NASA

Copyright © 2011 IHS Inc. All Rights Reserved. Counterfeits and Inferior Grade Components 13

And… RoHS Was Just the Beginning…
The discontinuous sustainability and compliance shift

Bisphenol-A “BPA Free” China RoHS
Customer RFP
Conflict Minerals
EU RoHS Recast Energy Priority Declarable Substances List
(ASD PDSL)
Toxic Substances Control Act (TSCA) Waste Health Canada / Canada’s Chemical
Greenpeace

SIN List - Substitute It Now! Management Plan
EU REACH & SVHC
Security US California Proposition 65
DEHP-Free
Hazardous ISO 14064 GHG Standards Norway PoHS
UN Stockholm Persistent
Substances Safety
Organic Pollutants (POPS) Air
Argentina RoHS Product Content Disclosure
Thailand’s “RoHS”
EU RoHS and WEEE Directives EU Battery Directive
Japan Green ENERGY STAR Carbon Disclosure Project (CDP)
Volatile Organic Compounds
US FDA

Electronic Product Environmental Natural Resources
Regional Greenhouse Gas Initiative (RGGI)
Assessment Tool (EPEAT)
Health
PCF - Product Carbon Footprint
US EPA Executive Orders
Water Lifecycle Assessment (LCA)
EU Medical Device Directive
Environmentally Preferred Products (EPP)

Full Material Disclosure


Now… EU REACH is a Huge Deal
European Commission roadmap includes 106 priority SVHC by 2012

“Airbus UK’s director of operations and
compliance, said the cost of REACH had
been evaluated at several million Euro over
three years, with provisions up to hundreds
of millions of Euro over five years”…

“…[He] said there is a level of ambiguity
because it will depend ‘on the substances
that will finally be added to the candidate
list and in Annex XIV’. Airbus UK has set its
2009 REACH budget at some EUR12 million.”
Source: “EU and industry REACH different conclusions”, Jane’s, September 2009

15

Why “Hundreds of Millions” in Risk?
Material restrictions change the entire supply and demand picture

EU REACH “Chemicals” Sectors Impacted
Semiconductors

Communications

Energy & Utilities

“Substances” “Preparations” “Articles”
are individual are mixtures any object Electronic Devices
chemicals or solutions produced

Aerospace & Defense

Consumer Goods

Imported Manufactured Used
Chemical & Process

Medical & Healthcare


This is NOT exclusive to Any Industry
A typical hospital setting…

Deca-BDE?

DEHP?

Cadmium?

Phthalates?

Lead?


Medical Products Are Exposed to Risk
Complex Regulations  Long Cycles  Major Design & SC Analysis Required

Top 2010 environmental compliance 50% + of all redesign and Compliance requires comprehensive
drivers include the FDA and EU certification of medical products material composition, supply chain,
REACH, RoHS + Recast and MDD. would take more than a year. technical design and lifecycle data.

US FDA (e.g. CFR 21) Technical Fit (e.g.
Less than 1 Month 4.5% 87.5%
EU REACH & SVHC Form, Fit, Function)
EU RoHS/WEEE 1 - 3 Months 4.5% Material Disclosure &
79.1%
EU Medical Device… Composition
EU RoHS Recast / v2 3 - 6 Months 8.0%
Compliance Status 77.0%
China RoHS
6 - 12 Months 30.7%
Health Canada /…
Reliability 72.9%
RoHS - Other… 12 - 18 Months 20.5%

Toxic Substances… Lifecycle Analysis &
More than 18 months 31.8% 68.7%
Proposition 65… Supply Continuity

0% 5% 10% 15% 20% 0% 10% 20% 30% 40% 0% 20% 40% 60% 80% 100%

Entering 2010, the top 3 regulatory drivers Figure 2: Redesign or certifying your Figure 3: To evaluate new or existing
influencing program / resource allocations? primary product/line would take? parts for material compliance, which
factors play a role in part selection?
Source: Benchmarking Medical Supply Chains, Supply
Source: Survey of 17 of 18 Fortune 1000 Top Source: Live Audience Poll Supply & Demand
& Demand Chain Executive, March 2010 (prelim.
Medical Products & Equipment companies and Chain Executive Webcast "Redesigning Medical
Results)
50+ other manufacturers, “Redesigning Medical Supply Chains" Supply & Demand Chain
Supply Chains”, Supply & Demand Chain Executive, Thursday, October 15, 2009
Executive, Thursday, October 15, 2009

18 18

The Entire Medical Peer Group is Watching
We held a Webcast called “Redesigning Medical Supply Chains”

Over $80B in spend among the Fortune 1000…

… and only 1 did not join our webcast…

What Steps Can be Taken to Mitigate Risk?
Buyer and Supplier must collaborate on regulations, standards, and implementation thereof

Airworthy?

Regulations Standards Parts
20

Early Warning System to Avoid Risk
Robust supply chain traceability and alerting methods to mitigate risk

Challenge Economic downturn… …shortage… …fake parts…
Environmental Compliance

…mission failure!

Establish the Information, Tools, and Processes to Mitigate Risk
Qualify Manage Validate Report Redesign
+ Approve + Avoid + Detect + Resolve + Resupply

Establish infrastructure to Update processes, tools, and Validate, sample and test Procedures to notify Maintain controlled
mitigate risk through qualified information to avoid components for authenticity. stakeholders, report design/redesign cycles of
and approved designs, counterfeit and high risk Quarantine suspected occurrences, and resolve products. Optimize parts,
suppliers, & parts. parts. counterfeits. incidents. inventory, and suppliers.

Monitor Lifecycles PCN/EOL to Detect Issues Price/Lead Time Counterfeit Incidents
End of Life (EOL)

Maturity
Decline

Growth Phase-Out

Introduction Obsolete

2003 2004 2005 2006 2007 2008 2009


3 Essential Steps We’ll Discuss
 Establish the Tools, Processes, and People…
• Standards and Regulations Management

• Technology Value Chain Insight

• BOM and Parts Management

• Counterfeit Intelligence

 Identify and Mitigate Supply Chain Risks

 Avoid, Detect, and Resolve Counterfeits


Best Practice Workflow

1. ESTABLISH THE TOOLS,
PROCESSES, AND PEOPLE…
Rory King
Director, Design & Supply Chain
IHS Inc


Standards – A Lead Role in Risk Mitigation
SAE AS5553 within IHS Standards Expert

24


Did You Know-Standards Refer to Standards?
SAE AS5553 Standard: Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition

ANSI

EIA

MIL-STD

Did you know, AS5553 refers to:
-20+ primary references
-300+ secondary references

… a lot of critical information…
JEDEC

IEC

ISO QMS
25

IHS clients get standards in one place
Standards collections, revisions, alerts to updates…

26


Same with Technology Market Intelligence
IHS iSuppli iLibrary for clients


Market, Commodity, and Manufacturing Insight
IHS iSuppli provides technology value chain market intelligence

Source: IHS iSuppli 2011 – Do Not Use or Reproduce


Component Supply Health
Clients gain a view into health of critical components

Source: IHS iSuppli April 2011 Component Health Watch (CHW)


BEST PRACTICE WORKFLOW

2. IDENTIFY AND MITIGATE
SUPPLY CHAIN RISKS
Glenn Bassett
VP Strategic Business Development
IHS Design & Supply Chain


Risk Identification

• Some examples…

• Predicted Obsolescence
• i.e. Proactive Avoiding of Design Risk
• Component Health Risk
• i.e. Rising Costs and Lead Times, Allocation
• Lifecycle Event Risk
• i.e. EOL / Lifebuy Notice
• Supply Chain Failure
• i.e. Potential Impact of Japan Crisis
• Counterfeit Incident
• i.e. Suspected Counterfeit or High Risk Part


Moving From Risk Identification To Mitigation

• From Manufacturer & Commodity To End Units Impacted

• Identifying Components In My Business

• Linking Down To BOMS & End Devices

• Prioritize Key Components/BOMS/Devices

• Identifying Sources Of Inventory

• Leverage Alternate Sourcing Tools

• Identify Mitigation Plan Working With Suppliers

• Develop Counterfeit Mitigation Plan

• Longer Term Impacts


Moving From Manufacturer/Commodity To MPN

• Leverage Reference Database To Identify MPNs At Risk
• Analyze AVL For Linkage In Risk Components


Moving From MPN To BOM

• Leveraging BOM Tools In PLM,
PDM, Or In This Case IHS BOM
Manager Helps Move From MPN
To Affected BOM

• With BOM Identified, End Unit
Exposure Can Be Correlated
Shown: IHS BOM Manager


Prioritize Key Components, BOM, Devices

NPI Production Imminent
Proto-type / Pre-Production

In-production with near-term
delivery

• Prioritize End Unit Exposure
• Calculate Time Horizon / Revenue Risk Profile
• Prioritize Through End Unit Back To Component
Calculate Inventory Need & Priority


Where can I get this?

Where Does Current Inventory
Exist?
• Direct from the Factory
• Approved Vendor / Manufacturer
(AVL / AML)
• Franchised and Authorized
Sources
• Approved Independent Distributors Shown: IHS BOM Manager

• ERAI Members
• Valid Alternate Parts or Sources

Shown: IHS-ERAI


What alternatives exist?

Equivalent Parts?
Upgrades? Downgrades?
Functionally equivalent options?
Are they ROHS Compliant?


Choices

• AVL Or Alternate
• Authorized Channel Inventory
• Secondary Market

• Inventory Investment
• Bridge Buy
• Making Bets On Near Term Recovery Or Redesign
• Lifetime Buy
• Mitigating Greater Risk Time Horizon


Counterfeit Incident Tracking
ERAI and GIDEP are 2 sources of validated incident reports

Of reports made, 9% came from GIDEP and 91% from ERAI during the period shown.

The Last 6-Years of Component EOL
2009 – Economic Events Drive EOL: What About 2012

Manufacturer-Issued End of Life (EOL)
Distribution of EOL by Dominant Business Driver
Technology
100% < 25% of Change
90%

80%
Demand-Side Drivers
~90% of EOL in 2009
70%
Unspecified / Administrative
60% Supply Side
Organizational
50%
Innovation, Technology, and Manufacturing
40% Environmental Compliance
Demand-Side
30%

20%
Impact of RoHS
10% Compliance
0%

2004 2005 2006 2007 2008 2009


Moving From Risk Identification To Mitigation

• From Manufacturer & Commodity To End Units Impacted

• Identifying Components In My Business

• Linking Down To BOMS & End Devices

• Prioritize Key Components/BOMS/Devices

• Identifying Sources Of Inventory

• Leverage Alternate Sourcing Tools

• Identify Mitigation Plan Working With Suppliers

• Develop Counterfeit Mitigation Plan

• Longer Term Impacts


Best Practice Workflow

3. AVOID, DETECT, AND
RESOLVE COUNTERFEITS
Mark Snider
President,
ERAI Inc.


Our Commitment is Personal


ERAI Inc.
A World of Information at Your Fingertips

• Founded in 1995, ERAI is an information services organization that
monitors, investigates and reports issues affecting the global hi-tech
electronics supply chain.
• ERAI provides tools to mitigate risks on substandard parts, counterfeit
parts, vendors and even customers.
• Subscribers include OEMs, CMs, Distributors, OCMs, government
agencies and industry associations.
• Founding participant in SAE International G-19 Counterfeit Electronic
Components Committee and several sub-groups


Who ERAI is not…

• ERAI is not a distributor
or parts broker
• ERAI is not a sourcebook
or online catalog
• ERAI is not a component
manufacturer or OEM
• ERAI is not a test lab
or inspection service
• ERAI is not a quality We do not
buy, sell, or test parts!
standards organization

Exclusive Partner to Only IHS
One provider of counterfeit alerts and supply chain risk mitigation

46

Why? IHS Clients
Thousands of users globally

Avid


What’s Being Counterfeited?

Source: ERAI Inc, 2004 to YTD Feb 2011

Source: IHS Component Insight, IHS Inc, 2011
* 2011 figures are projected annual estimates based on March YTD 2011 actuals and previous annual proportions.


What’s Being Counterfeited?
Part Classes with 1.5% or more of total incidents

Top Counterfeit Incidents Reported by Part Class
Classes with 1.5% or Greater Proportion of Total Incidents
Rank Minor or Leaf Class Major Class # Incidents % of Total
1 Operational Amplifier ANALOG IC 194 6.0%
2 Programmable ROM MEMORY IC 176 5.5%
3 Microcontroller MICROPROCESSOR IC 157 4.9%
4 Static RAM MEMORY IC 143 4.5%
5 Programmable Logic Device PROG LOGIC IC 140 4.4%
6 FET General Purpose Power TRANSISTOR 131 4.1%
7 Field Programmable Gate Array PROG LOGIC IC 109 3.4%
8 Line Driver or Receiver INTERFACE IC 100 3.1%
9 Analog to Digital Converter ANALOG IC 96 3.0%
10 Switching Regulator or Controller LINEAR REGULATOR 92 2.9%
11 Power Management Circuit LINEAR REGULATOR 80 2.5%
12 Peripheral Driver INTERFACE IC 60 1.9%
13 Digital to Analog Converter ANALOG IC 57 1.8%
14 Ceramic Capacitor CAPACITOR 56 1.7%
15 Microprocessor MICROPROCESSOR IC 54 1.7%
16 Dynamic RAM MEMORY IC 49 1.5%
52.8%
Source: IHS Inc, 2011
* 2011 figures are factored projected based on March YTD 2011 and previous annual proportions.

49

Industry’s Reported Counterfeit Incidents
ERAI and GIDEP are 2 sources of validated incident reports

50

Over 50 counterfeits in the last 14 days!
Shown: ERAI Reported Parts


How Risk Enters Your Supply Chain
Intended and unintended ports of entry for counterfeits

1. Many unsafe part & supplier “sources”
• Online Broker Search Engines

• Maverick procurement methods or spending limits

• Google

2. These are counterfeit ports of entry
• Rapid access to millions of parts

• Minimal membership requirements

• Quick & easy access to a large audience of buyers
Request for Quote
Request for Quote
3. Are you creating your own shortages? Request for Quote
…
…
…
• Multiple RFQ’s create false demand signals …
Request for Quote

• Leads to price increases and incentive for counterfeiting


No Supplier is Immune from Risk
Lack of accountability and traceability allows counterfeits to enter

“It is not uncommon, however,
for authorized distributors to
purchase parts outside of the
OCM supply chain in order to
fulfill customer requirements –
58 percent purchase parts from
other sources.

Specifically, 47 percent of
authorized distributors procure
parts from independent
distributors, 29 percent procure
from brokers, and 27 percent
procure from Internet-exclusive
sources.”
Source: U.S. Department of Commerce,
Office of Technology Evaluation,
Counterfeit Electronics Survey,
November 2009.
53

Best Practices to Avoid Risk
Stay Within Your Trusted Supply Chain

1. Direct from the Factory
2. Approved Vendor / Manufacturer (AVL / AML)
3. Franchised and Authorized Sources
4. Approved Independent Distributors
5. ERAI Members
6. Valid Alternate Parts or Sources
• Distributors, Aftermarket Sources
• Alternate Parts - Upgrades, Downgrades, Equivalents…
• Manufacturers and Products sanctioned by qualifying authorities
• Government QML/QPL

Contractually define your expectations. Test accordingly.

Congress Investigation Launched
Early in 2011 senators launched the investigation

“The presence of counterfeit
electronic parts in the Defense
Department’s supply chain is a
growing problem that government
and industry share a common
interest in solving.”
Carl Levin, D-Michigan, and
Sen. John McCain, R-Arizona
March 2011


Industry’s Recognized Reports
GIDEP and ERAI are the counterfeit reporting entities

Recognized by the G-19 Recognized by U.S. Senate


IHS + ERAI Workflow
What it looks like to thousands of IHS users

AUTHORIZATION
REQUIRED
AUTHORIZATION
REQUIRED

ERAI notices GIDEP notices

Example: Alert to Infineon BTS716G
Customers alerted to counterfeit incident as reported by ERAI

Alert!

•Subscribers of IHS 4DOnline BOM Manager, COMET, and Parts Universe have access to
alerts from ERAI, GIDEP, and other sources.
•Subscribers to the IHS-ERAI solution provides ERAI membership, giving them access to
ERAI’s comprehensive market intelligence community, tools, and services.

Example: Infineon BTS716G
Alerts are accessible via the IHS product

Users Seamlessly Navigate to ERAI
IHS customers browse directly from IHS into ERAI products

It Provides Complete Reported Parts Detail
Provides access to ERAI market intelligence

Vet Real Stock from “Available” Parts
It limits risk exposure from fake sources and price games

Ability to Vet the Open Market
Example ERAI Member Details

Ability to Vet Open Market Sources
Qualify your suppliers

ASK YOUR SUPPLIERS…
Industry Membership and Reporting?
Quality System and Processes?
Warranty and Insurance?
Supplier Qualification and Purchasing Process?
Non-Conforming Material Control?
Inspection and Test?
Efforts made to verify a Parts’ Authenticity before use?

Search and Monitor Supplier Risk
A wide range of incidents pose serious business problems

Example: AAOK Electronics
Past due invoices, wire fraud, faulty product for example…

BOM Risk Analysis & Monitoring
via ERAI BOM Scrubber

BOM Analysis: Risk Identified
File is processed in seconds; can be monitored after

Report and Resolve Incidents
Comprehensive reporting of part and supplier complaints


Conclusion – Fight the Fakes
April’s digital edition of Supply & Demand Chain Executive magazine


Steps to Securing the Supply Chain
With market intelligence from IHS and ERAI

 Establish the Tools, Processes, and People…
• Standards and Regulations Management

• Technology Value Chain Insight

• BOM and Parts Management

• Counterfeit Intelligence

 Identify and Mitigate Supply Chain Risks

 Avoid, Detect, and Resolve Counterfeits


Thank You

Questions?

Rory King, Director Design & Supply Chain, IHS
Rory.King@ihs.com

Glenn Bassett, VP Strategy, Design & Supply Chain, IHS
Glenn.Bassett@ihs.com

Mark Snider, President and Co-Founder, ERAI Inc.
Mark@erai.com


ERAI Executive Conference Executive Brief - “The Big Picture” of Compliance, Counterfeits, and Continuity: How obsolescence, environmental compliance, and counterfeits are all linked to potential DMSMS, price/availability, design, and supply chain dis

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (9)

Recently uploaded

Recently uploaded (20)

ERAI Executive Conference Executive Brief - “The Big Picture” of Compliance, Counterfeits, and Continuity: How obsolescence, environmental compliance, and counterfeits are all linked to potential DMSMS, price/availability, design, and supply chain dis