MDA Counterfeit Part Lessons Learned - · PDF file1 Approved for Public Release 13-MDA-7351...

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Transcript of MDA Counterfeit Part Lessons Learned - · PDF file1 Approved for Public Release 13-MDA-7351...

  • 1Approved for Public Release 13-MDA-7351 (18 June 13)

    MDA Counterfeit Part Lessons Learned

    September 17, 2013Barry BirdsongDivision Chief

    MDA QSP

    SMTA 2013

  • 2

    Ballistic Missile Threat To HomelandAnd Pacific Region

    Growing and Unpredictable

    Threatens regional stability

    North Korean Road-mobile ICBM on parade

    April 2012

    North Korean Taepo Dong-2

    April 2012

    North Korean SCUD-B

    North KoreanNo-Dong Ballistic Missile

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    Todays BallisticMissile Defense System

    Satellite

    Surveillance

    Sea-Based

    X-Band Radar

    Aegis BMD

    SPY-1 Radar

    Forward-Based RadarEarly Warning

    Radar

    SENSORSSENSORS

    ASCENTASCENTDEFENSE SEGMENTDEFENSE SEGMENT

    BMDSBMDSThe Ballistic Missile Defense SystemThe Ballistic Missile Defense System

    C2BMCC2BMCCommand, Control, Battle Management and CommunicationsCommand, Control, Battle Management and Communications

    NMCCNMCC USSTRATCOMUSSTRATCOM USNORTHCOMUSNORTHCOM USPACOMUSPACOM EUCOMEUCOM CENTCOMCENTCOM

    Terminal High

    Altitude Area

    Defense

    Ground-Based

    Midcourse

    Defense

    Aegis Ballistic

    Missile DefenseStandard Missile-3

    SM-3

    DEFENSE SEGMENTDEFENSE SEGMENT

    MIDCOURSEMIDCOURSE TERMINALTERMINALDEFENSE SEGMENTDEFENSE SEGMENT

    GBI

    Sea-Based

    Terminal

    Patriot Advanced

    Capability-3

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    What commonalities are present in the MDA counterfeit parts occurrences to date?The company that bought the parts was not the prime contractor.The parts were bought from independent distributors.There were inadequate counterfeit inspection procedures in placeat the time of purchase.A robust visual inspection and marking permanency test would have raised suspicion and prompted further analysis.

    Additional analysis wouldve confirmed parts were counterfeitThe majority of the issues involved parts with the correct die.Almost half the issues involved parts still available in production.

    MDA Counterfeit Experience

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    Company A

    This independent distributor lists 817 suppliers on its line card, and can find parts through our extensive worldwide linked part searcher. Also as stated, all our products go through a rigorous testing process to insure 100% functionality.

    Company B

    This independent distributor lists 226 suppliers on its line card, is one of the fastest growing electronic distributors in the United States, has unlimited access to over 100 million dollars of electronic component inventory.

    In 2009, both these companies were residential suppliers with DoD customers.

    Independent Distributor Examples

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    Obsolescence as a Contributing Factor

    Obsolescence of parts drive contractors to buy from Brokers Average microcircuit life is 24 months on market 6-8 Month notice of last time buys are issued

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    Supplier Selection

    How many Independent Distributors are there in the United States? ERAI has 765 members (as of 7/18/11) Approximately 90% are Independent Distributors (~ 700) Approximately 60% are US-based (~ 430)

    Estimate there are between 2000 and 3,000 Independent Distributors in the United States An MDA study in 2010 of 158 OCMs found the top two Authorized Distributors were authorized for just over 60% of the OCMs. The top ten Authorized Distributors covered almost 90% of the selected OCMs.

    NEDA (National Electronic Distributors Association) joined with ECA (Electronic Components Association) to form ECIA (Electronic Component Industry Association). ECIA maintains a listing of authorized distributors, and allows a search of OCM part numbers to get an authorized distributor quote (www.eciaauthorized.com)

    GIDEP and ERAI report data suggests less than 20% of US-based distributors are ERAI members

    Approved for Public Release 13-MDA-7358 (18 June 13)

  • 8Approved for Public Release 13-MDA-7358 (18 June 13)

    Whats Being Counterfeited?

    Based on ERAI suspect counterfeit part reports from January 2012 through July 2013

  • 9Approved for Public Release 13-MDA-7358 (18 June 13)

    Integrated Circuit Breakout

    Based on ERAI suspect counterfeit part reports from January 2012 through July 2013

  • 10Approved for Public Release 13-MDA-7358 (18 June 13)

    Counterfeit Parts by Quality or Grade

    Based on ERAI suspect counterfeit part reports from January 2012 through July 2013

  • 11Approved for Public Release 13-MDA-7358 (18 June 13)

    Who is Being Counterfeited?

    Based on ERAI suspect counterfeit part reports from January 2012 through July 2013

    14 OCMs' make up 50% of the ERAI data, 200 OCMs listed for the remaining 50%.

  • 12

    MDA Contractor Audits

    Supplier Approval Weaknesses:- Failure to differentiate authorized vs approved.

    Authorized the manufacturer authorizes them to sell the product with full support.

    Approved the contractor approves them to sell the product.- Lower tier contractors still lacking in assessment procedures

    for independent distributors.- Authorized and unauthorized suppliers mixed together on the

    same procurement list with no differentiation. Training Weaknesses:

    - Failure to train all affected organizations.- Program Management, Quality Technicians, Procurement

    - Failure to schedule new hires for training.- Training is specific to only one part of the problem

    - Detection but not avoidance- Avoidance but not detection

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    3.7.1 Supplier/Vendor Selection and Surveillance

    No prior significant problems with quality or authenticity, as indicated by searches of available sources (e.g., GIDEP, ERAI, etc.).Documented supplier selection criterion to block or remove identified high-risk sources.Procurement practices which ensure purchase from the OCM or an authorized supplier whenever possible (even if purchase from an unauthorized supplier achieves cost savings).Rigorous Inspection and test procedures (details in the MDA PMAP)Procedures which address the containment of suspect and confirmed counterfeit parts, and notification of affected customers.

    MDA Supplier Requirements

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    Summary

    ALWAYS BUY PRODUCT FROM AUTHORIZED SUPPLIERS whenever possible

    ASSESS YOUR UNAUTHORIZED SUPPLIERS ON-SITE or DONT BUY

    REQUIRE MINIMUM INSPECTION AND TEST FOR ALL PURCHASES FROM UNAUTHORIZED SUPPLIERS

    FLOW DOWN COUNTERFEIT PARTS REQUIREMENTS TO YOUR SUPPLIERS (verify on site)

    USE THIRD PARTY TEST LAB AND ESCROW ACOUNT TO VERIFY PARTS ARE GOOD BEFORE PAYMENT IS MADE

    SUPPLY CHAIN EDUCATION AND TRAINING IS KEY

    14Approved for Public Release 13-MDA-7358 (18 June 13)

  • 15

    BACK -UP

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    Whats Being Counterfeited?

    16

    Active (Semiconductor) Parts

    Passive (non-Semiconductor) Parts Most counterfeited electronic parts

  • 17

    MDA Supply Chain

    Tier 1 = Prime Contractor

    MDA has over 650 contractors providing hardware to the BMDS42% are Tier 4 or lower

    Approved for Public Release 13-MDA-7358 (18 June 13)

  • 18

    MDA Requires(PMAP Rev B)

    Approved for Public Release 13-MDA-7358 (18 June 13)

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    MDA Requires(PMAP Rev B)

    Approved for Public Release 13-MDA-7358 (18 June 13)

  • 20Approved for Public Release 13-MDA-7358 (18 June 13)

    Counterfeit Memory Devices by Type

    Based on ERAI suspect counterfeit part reports from January 2012 through July 2013