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Transcript of Supply & Demand Chain Executive Magazine

  • 1.Best practices and techniques for mitigating risksDate:Wednesday, February 23, 2011Time:8:00 am PT | 11:00 am ET | 4:00 pm London | 16:00
    • Counterfeit Avoidance -Yesterday, Today, Tomorrow...

Kristal Snider Member, SAE G-19 Committee Vice President, ERAI Inc. 3899 Mannix Drive, Ste. 421-422, Naples,FL34114 Tel:239-261-6268, Fax: 239-261-9379 Email: 2. Meeting Objective

  • Review available solutions/resources that can reduce the potential of acquiring a counterfeit electronic component.

3. ERAI -Overview

  • Founded in 1995
  • Mitigate Risk of Parts, Customers & Vendors
  • Provide up to date information on Counterfeit, Faulty & High-Risk Parts
  • Real-time Industry Monitoring & Reporting Services
  • Real-time High-Risk and Counterfeit Part Reporting
  • Bill of Material / Assembly Cross Checking against High-Risk Parts Database
  • Vendor & Customer Analysis
  • Proactively Prevent Losses & Reoccurring Problems
  • Access to Search Risk Mitigation Tools
  • Fair & Impartial Investigation Services
  • Stay Informed on Current Issues Affecting the Supply Chain

2011 ERAI Inc. 4. Counterfeit -Origin

  • 2001 China Admitted to WTO

5. Counterfeit -Origin 6. Counterfeit --Origin 7. Counterfeit -E-Waste

  • Laborer de-soldering circuit boards over a coal-fired grill. Rock in the box is where boards are hit to remove solder. Pliers are used to pluck off chips which go into various buckets. The boards are then tossed into a pile for open burning.
  • Basel Action Network 2006.

8. Counterfeit -E-Waste 9. Counterfeit -E-Waste 10. Counterfeit -Portals of Entry 11. Counterfeit-Portals of Entry

  • Rapid access to millions of parts
  • Minimal membership requirements
  • Quick & easy access to a large audience of buyers

2011 ERAI Inc. 12. All types of components are being counterfeited, even passives. % of reported counterfeits from ERAI database, 2004 to present Counterfeit -What is Being Counterfeited? 13. Counterfeit-Impact 14. Counterfeit- Impact

  • Impact of using counterfeit parts or materials
  • Potential loss of life
  • Espionage
  • Monetary loss
  • Liability
  • Lack of availability of products for customer use
  • Loss of customer/public trust
  • Brand damage

2011 ERAI Inc. 15. Counterfeit -Where the industry has fallen short Lack of dialogue between all organizations in the U.S. supply chain. Companies and organizations assume that others in the supply chain aretesting parts. Lack of traceability in the supply chain. Insufficient chain of accountability within organizations. Recordkeeping on counterfeit incidents by organizations has been limited. Stricter testing protocols and quality control practices for inventories are required. DOD organizations have not had policies in place to prevent counterfeit parts from infiltrating their supply chain. 2011 ERAI Inc. 16. G-19 17. Formation of G-19(Sept. 2007)-Industry Working Together To Craft A Solution 2011 ERAI Inc. Orbital Sciences Arrow Electronics NorthropGrumman IntegraTechnologies Honeywell Boeing Jabil SMT AERI ERAI IDEA AIA NASA JPL G-19 18. SAE G-19 Committee Members & Liaisons

  • US Government Members
  • DCMA
  • Defense Logistics Agency, DSCC
  • MDA
  • Navy-Crane
  • NSWC Crane
  • Tinker Air Force
  • US Army AMRDEC
  • Industry Members
  • 3M
  • Boeing
  • General Dynamics
  • Honeywell
  • L-3 Communications
  • Lockheed Martin
  • PerkinElmer
  • Plexus
  • Raytheon
  • Participating Industry Associations
  • AIA
  • ERAI Inc.
  • Independent Distributors of Electronics Association (IDEA)
  • Participating Test Laboratories
  • Center for Advanced Life Cycle Engineering (CALCE)
  • Evans Analytical Group
  • Hi-Reliability Microelectronics
  • Integra Technologies
  • Premier Semiconductor Services
  • Process Sciences
  • Silicon Cert Laboratories
  • White Horse International

Representation from Government, Aerospace, Military, & Commercial 19. Brokers Independent Franchise Commercial Defense Space Inspection Test G-19 - A Multilayered Counterfeit Risk Mitigation Initiative 2011 ERAI Inc. 20. AS5553 Rationale 21. AS5553 -Requirements: 4.1 Counterfeit Electronic Parts Control Plan

  • Risk Mitigation
  • Disposition
  • Reporting


  • Design, Proposal, and Program Planning
  • Obsolescence Management (DMSMS)

AS5553 -Requirements:4.1.1 Parts Availability 23.

  • Assess potential sources of supply to determine the risk of receiving counterfeit parts
  • Has the organization/part been reported by ERAI
  • Maintain a register of approved suppliers
  • Do not buy from sources not identified on your AVL
  • Specify a preference to procure directly from OCMs or authorized suppliers
  • Audit suppliers to ensure they are maintaining effective processes for mitigating risk
  • Coming Soon:ARP6178
  • Ask for supply chain traceability
  • Be Careful - Paperwork can also be counterfeited
  • Flow down your requirements.
  • In the event that one or more supply chain intermediaries do not have a counterfeit part control plan compliant to this document, a risk analysis shall be required for every application of the part.

AS5553 - Requirements:4.1.2 Purchasing 24. AS5553 -Requirements: 4.1.3 Purchasing Information & 4.1.4 Verification of Purchased Product


25. AS5553 -Requirements: 4.1.5 In Process Investigation & 4.1.6 Material Control

  • shalladdress the detection, verification, and control of suspect counterfeit parts.
  • shallprevent suspect counterfeit parts from entering the supply chain / use.
  • shallpreclude suspect counterfeit parts from re-entering the supply chain.

26. AS5553 -Requirements: 4.1.7 Reporting

  • The documented processes shall assure that all occurrences of counterfeit parts are reported, as appropriate, to internal organizations, customers, government reporting organizations (e.g., GIDEP), industry supported reporting programs (e.g., ERAI), and criminal investigative authorities.
  • ERAImaintains a database of counterfeit and high-risk items. Data can besubmitted by anyone on the public domain of their website ( do not need to be members to report counterfeit and high-riskitems. Submitting companies remain anonymous in the reporting ofcounterfeit/high-risk items. Companies must be ERAI members to view thisdatabase. However, virtually all electronics-related companies/organizations,not just resellers, are candidates for membership.

27. Reporting 28. G-19 29. AS5553 Adopted By DoD 30. G-19 -ERAI Involvement

  • ERAI Serves On :
  • Original Member of G-19 (AS5553)
  • Member of G-19D (AS6081)
  • Member of G-19DR
  • Member of G-19CI(Continuous Improvement/AS5553 Rewrite to ensure document is applicable in both US and foreign markets)
  • Meeting Schedule:
  • Tuesday 10:00am12:00pm EST
  • G-19CI AS5553 Re-write
  • Bi-Weekly
  • Thursday 11:00am-1:00pm EST
  • G-19D AS6081 Development Team
  • Weekly
  • Other
  • G-19DR Distributor Assessment Manual/Survey Team
  • As Required

31. Summary

  • Employees need clear direction from management on combating counterfeits as well as written guidance on how to:avoid purchasing counterfeit parts; test, handle and track incoming and outgoing parts; and manage and dispose of suspected counterfeit components.


  • Thank You
  • Kristal Snider
  • Member, SAE G-19 Committee
  • Vice President, ERAI Inc.
  • 3899 Mannix Drive, Ste. 421-422, Naples,FL34114
  • Tel:239-261-6268, Fax: 239-261-9379
  • Email: