Setting the supply chain standard slide share
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Kristal Snider from ERAI Inc discusses strategies for setting supply chain standards to prevent counterfeit electronic parts. ERAI provides data on counterfeiting incidents and parts most often counterfeited. New SAE standards on counterfeit electronic parts control plans include requirements for purchasing, material control, and reporting. Attendees can receive an offer for an ERAI BOM analysis to identify part risks.
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Setting the supply chain standard slide share
- 1. Setting the Supply Chain Standard Date: Thursday, September 15, 2011 Time: 8:00 am PT | 11:00 am ET | 4:00 pm London Kristal Snider Vice President, ERAI Inc. Member, SAE G-19 Committee 3899 Mannix Drive, Ste. 421-422, Naples, FL 34114 Tel: 239-261-6268, Fax: 239-261-9379 Email: ksnider@erai.com Setting the Supply Chain Standard Avoiding Cost and Mitigating Risk while Maximizing the Effectiveness of Global Standards Designed to Thwart Counterfeits
- 6. Strengthen Supply Chain Vulnerabilities STRENGTHS WEAKNESSES
- 13. SAE G-19 Organization Chart Who is involved?
- 14. Brokers Independent Franchise Commercial Defense Space Inspection Test Standardization Why we need AS5553/AS6081/AS6171 Distribution AS6081 Distribution AS5553 Distribution AS6171
- 15. Standardization Why we need AS5553/AS6081
- 17. Standardization: Purchasing 4.1.2. Assess Sources of Supply Recently Reported Parts & Suppliers
- 18. Standardization: Purchasing Supplier Risk Assessment with ERAI
- 19. Standardization: Purchasing Part Risk Assessment with ERAI
- 20. Standardization: Purchasing Assess and Maintain “Approved Suppliers”
- 21. Standardization: Reporting / Data Sharing 4.1.7 Reporting DOD Adoption: August 31, 2009 Incidents: 91% of reports via ERAI
- 22. Standardization: Reporting / Data Sharing 4.1.7 Reporting
- 23. Standardization: Purchasing BOMs have 0.5 - 5% match to ERAI-reported incidents
- 24. Standardization: Material Control 4.1.6 / F.1.4
- 25. Action Item Material Control Plan -Counterfeit parts have NO value -Provide Supplier with verification of the nonconformance -Allow Supplier the opportunity to verify findings & launch internal investigation -Counterfeit parts should be placed in quarantine ***The parts are evidence and should not be immediately destroyed*** - Counterfeit parts will not be returned -Supplier has the right to verify Buyer’s findings -Report the incident to ERAI or GIDEP
- 28. Action Item Monitor Updates @ERAI-Inc ERAI, Inc. Join Relevant Discussions Industry News Find out about upcoming Educational Opportunities
Editor's Notes
- ERAI is a global information services organization that monitors, investigates and reports issues that are affecting the global supply chain of electronics. The types of complaints typically filed with ERAI include: Contract Disputes Unresolved Debts Past Due Invoices Wire Fraud Identity Theft Credit Card Nonconforming Parts And most notably Suspect Counterfeit Parts We have more than 1,000 Member companies globally. NOTHING is reported by ERAI that is not first thoroughly vetted. Our data is documented and it is reliable. We maintain the largest database of known high-risk and suspect counterfeit parts in the world. ERAI is NOT a distributor. We do not buy or sell parts. ERAI is not a test lab or inspection service. We are not a quality standards organization. We are a market intelligence tool. We’re here to help companies minimize and measure risk.
- The VISCIOUS cycle
- ERAI can be used to meet the requirements set forth in AS5553 For example: In Section 4.1.2 the organization is required to assess potential sources of supply. Sources of supply encompasses both parts AND suppliers. So as you can see in this screen shot: ERAI maintains a database of reported high risk and suspect counterfeit parts. You can use this data to measure risk against parts you need or may need in the future. ERAI also maintains a database of reported companies. If a company has been reported to ERAI, depending on the nature of the grievance, your organization may opt to identify that supplier as HIGH RISK. Both of these are steps you can take to assess the sources of supply. 09/15/11 17:51
- We reviewed the types of incidents that are frequently reported to ERAI at the beginning of today’s presentation. What I want to emphasize here is that all complaints filed with ERAI are documented and thoroughly investigated. All reported companies are contacted and are given the opportunity to respond to the complaint that is filed against them. Once an incident IS reported by ERAI in the form of an ERAI Alert and the data is added to our database, it is NOT removed. If the incident is RESOLVED, we will update the status of the complaint accordingly. But the incident WILL remain in our database INDEFINATELY. Both Members of ERAI and Non-Members can file complaints, But ONLY MEMBERS can access that data via our website. This screen shot serves to demonstrate what a reported company’s ERAI profile might look like.
- This is an example of what you can expect to see from an ERAI Reported Part Alert. We collect data regarding: The part number: Manufacturer: Date Code: Lot Code: And any other applicable product identifiers. In most incidents we have collected inspection/test reports, photos, evidence of die analysis, x-rays. As with reported companies……Members and NON Members alike can report high risk parts via our website BUT Only Members can access the data. This is what the standard means when it says to evaluate your sources of supply.
- 4.1.2 B require the Buyer to specify a preference to procure parts directly from either the OCM or an Authorized Franchise Supplier whenever possible, but it recognizes that this is NOT always possible. Independent Distributors play a vital role in the supply chain. When procurements need to be made from the open market, the Standard directs the user to maintain a register of Approved Suppliers that meet a key set of criteria. ERAI can not only help you weed out unsavory suppliers but we can also help you build and maintain your approved supplier list. This is an example of a profile belonging to a distributor that you may want to consider as an Approved Open Market Supplier.
- Over 4,000 counterfeit incidents have been reported by our organizations. Respectively, approximately 9% have been reported through GIDEP, that means 91% - or – roughly nine out of every ten counterfeits incidents is reported by ERAI. The Bureau of Industry & Security has reported a rise in counterfeit incidents sequentially EACH year for the past four years. It is NOT YET clear if the rise in the number of counterfeit incidents is due to: Better identification of suspect counterfeit parts More industry involvement which has lead to more reporting Or if it is because there are in fact more counterfeits in the supply chain.
- What is clear is that 2011 is on track to nearly double the number of reported incidents from 2010 Reporting = Ability to measure counterfeit activity.
- AS5553 calls for the control of suspect counterfeit parts to ensure they do not re-enter the supply chain. In addition to this requirement, the standard offers guidance that will aid your organization in developing a Material Control Plan. Parts that are returned find their way back into Open Market.
- Implement a Counterfeit Part Material Control Plan Speak with your attorney and include language in your purchase order terms and conditions
- ERAI will keep you informed and plugged in.