Synergy Between Smart Manufacturing and the Secure Supply Chain (Part 2)

Estimated reading time: 17 minutes

The availability of exact traceability data has a profound effect on potential consequences of counterfeit incursion. This is illustrated from the following examples of real cases of counterfeit materials causing issues in the market, though details have been changed to protect the identify of those concerned.

In one example, there was a case of an automotive manufacturer who found that during the life-testing of a batch of airbag deployment sensors, some did not deploy correctly. The engineering team carried out an investigation and found the cause of each was down to a failure in a component within the deployment controller, which was immediately suspected as being from a defective batch, or even being counterfeit. Without traceability data being available, around 400,000 cars would have to be recalled in order to check whether they were affected, or, swap out the controller just in case. The number was decided based simply on the time range in which the faulty units were manufactured, what materials were there at the time, and the time that the materials could have continued to have been used, either side of those dates. With basic traceability and the available knowledge about which materials were used, and what other batches of products they were assigned to, the number of cars subject to recall was reduced to 15,000. In both these cases, however, the recall was a national public announcement, very damaging to the logos on the cars affected. Where exact traceability data is available, it can be used to discover patterns in the data that would indicate the cause of the defects. This may not necessarily be the material itself. In this example, with the use of exact trace data, the fault was tracked back to a specific operational process, and not in fact a specific material. All of the defective units had been through a specific process at a time immediately prior to when a faulty earth strap had been reported, and replaced, but no action had been taken to check products made during the time period for which the strap was not connected correctly. As a result, the corrective action procedure for dealing with this type of earth-strap fault was modified, and the exact quantity of 882 cars known to have been specifically affected were discretely “serviced” to replace the suspect controllers.

In a second example, random failures of a smart domestic central heating controller were being experienced in the market, increasing significantly over time. At the repair center, a commonly used IC was found to have irregular markings, with evidence that previous markings had been removed. The IC was determined to be counterfeit. Unfortunately, that same IC was in very common usage in many types of critical and non-critical products. In all, without traceability data, about one million products already in the market were at risk of failure due to the possible use of the counterfeit material. With basic traceability data, the applicable batches of materials that came from the same source were identified, which reduced the potential scope of the issue down to 50,000 products. With exact traceability, all of the counterfeit instances were found to have come from one common source material lot, and in all, represented just 3,000 products.

In both of these examples, exact traceability data, collected as part of the smart factory operation, was able to turn a potentially company-/brand-threatening issue into an unfortunate, but manageable situation. This ability is a major step forward, and is thought by many should be mandatory in the industry today. In itself, it is not a complete solution to the threat of counterfeit material ingress, as, after all, there were still the actual instances of counterfeit materials to deal with. Action taken had no effect on eliminating the risk of such occurrences happening again.

The Smart and Secure Supply Chain

In order to completely eliminate the ingress of counterfeit materials, it is necessary to strike back at the source, to bring accountability and even prosecution for those responsible. The use of exact traceability in assembly manufacturing is a very low-cost, yet definitive link between any counterfeit material found, back to the original packaging in which the material arrived at the assembly manufacturing site. This ability represents a critical enabler for the creation of an effective end-to-end secure supply chain, utilizing the latest security technologies, such as blockchain, to securely track counterfeit ingress from assembly, up through the supply chain, and by so doing, to discover the point of ingress.

Figure 2: Overview of the secure supply chain.

Any such technology needs to be available as a global standard; and to be sustainable, needs to provide benefit for each of those companies or entities that are involved.

The secure supply chain idea starts with the original material manufacturer, who creates a unique blockchain ledger for each unit of material packaging dispatched. It is probable that standard unit quantities will be packed into standard sizes of packaging, that is tamperproof, with unique labelling or other form of identification that is also tamperproof and uncopiable. Several technologies exist for this purpose. Standards are more related to the procedure and audit trail, rather than the selection of the technology itself. The blockchain will record the material package information, which should include all of the mechanical and electrical specification of the included materials—in effect, it is an electronic datasheet. Having been designed digitally, this data about the materials should be readily available without additional cost to the manufacturer.

Once shipped, distribution events are recorded into the blockchain. By its nature, no data that has been added to the blockchain can be changed or tampered with. Any damage to the secure package or label is recorded, rendering the material content insecure. Distributors may repackage materials, when the packaging is damaged or if the package contents need to be divided, but then it is the specific entity performing this action within the distributor that assumes responsibility for the contents of the new packages.

At the assembly factory, the security of the packing and identification are confirmed, and the blockchain data retrieved. As well as being able to check the path of the distribution of the materials, the assembly manufacturer also gets the digital information about the material itself, an essential constituent of smart material management.

The benefit to the assembly manufacturer is that should there be any quality or suspected counterfeit issue, the true entity responsible can be quickly and accurately identified. With this technology in place, there is a strong deterrent to those who would attempt to substitute inappropriate materials, as there is no doubt that on detection, they will be tracked and held responsible. In addition, the assembly manufacturer gains the digital specification for the materials, which previously had to be derived manually from data-sheets, being another contributor to delays for new product introduction where new materials were introduced, or, where a different material had been approved as a substitution or alternative. For the distributor, there is the return to the trusted status with the customer, as the source of counterfeit ingress can be traced through their distribution and back to the source, without suspicion.

For both assembly manufacturer and distributors, as counterfeit material ingress is ultimately eliminated, there is the reduced cost and need for testing. For the original material manufacturer, there are also benefits relating to their brand protection and trust from their customers. Though it may not be the responsibility of the material manufacturers that others may be creating counterfeits of their materials, customers will nevertheless tend to associate them and start to avoid the use of those materials, as the risk of getting an issue with a counterfeit would appear far greater. Though this is difficult to quantify, there is no doubt that such an effect will become very significant as time goes on, were nothing to be done to combat counterfeit ingress. The likelihood of a very significant event taking place related to a counterfeit material is surely just a matter of time if nothing is done.

The creation of the secure supply chain depends on the creation of industry standards and the cooperation of a significant number of companies within the industry, in the areas of material manufacturers, distributors, assembly manufacturers, digital secure infrastructure providers for blockchain, packaging and labeling specialists, and digital manufacturing execution system providers for smart factories.

Conclusion

There is a “perfect storm” brewing in the electronics assembly industry. Traditional tools such as MRP and ERP are unable to address material shortages in the industry, driven in no small way by the increase in flexibility of factories that is effectively reducing the lead time of material ordering. The industry as a whole is not in a position to be flexible based on the accumulation and expense of raw material stock or finished goods at the factory. Looking at the key business drivers, smart Industry 4.0 operation represents a long-term survival and growth plan for manufacturing in western countries, through the optimized control of automation for high-mix production with software. As a synergistic consequence, the secure supply chain concept is born, as direct accountability of counterfeit materials can now be tracked back to the source. With the creation of the path of accountability throughout the supply chain, counterfeit ingress can effectively be halted, as each detected attempt is likely to bring prosecution.

The secure supply chain in the modern digital smart factory is not confined to raw materials, but is also equally as applicable to sub-assemblies, internal or external—all of which combine to create the complete digital build record for every product produced. Living in a world where electronic devices and circuits interact with us in almost everything that we do today, it is essential to retain trust in our devices, in a way that is cost effective. Having the secure supply chain potential being driven by smart factory operations is a great example of the synergy of new technologies, such as IIoT, blockchain and Industry 4.0, supporting the business goals of sustainable, reliable local manufacturing.

Michael Ford is the senior director of emerging industry strategy at Aegis Software.

This technical paper was originally published in the proceedings of SMTA International 2018.

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