Increase Traceability, Prevent Counterfeiting

Estimated reading time: 2 minutes

Michael Ford, senior director of emerging industry strategy for Aegis Software and I-Connect007 columnist, speaks about the increasing importance of traceability in manufacturing and throughout the supply chain, including how it affects such areas as counterfeit components and inventory management.

Nolan Johnson: What are the current concerns regarding the handling of counterfeits and component tracing through the supply chain, and how is IPC tackling them?

Michael Ford: At the time IPC started the standard for traceability, about five years ago, traceability had a very bad reputation in the industry, as it is something that operationally costs a lot of money, and many people will disagree on what data to collect and how to store it. We wanted to improve things so that traceability would become an everyday net benefit, in addition to the headline ability to discover the scope of any defects that might happen in the field and be able to narrow down the scope of rework or product recall, for example. We also wanted to use traceability for advanced quality purposes so that if, for example, we made 1,000 products, and one had a defect, we could discover the unique set of circumstances that caused the defect such that processes and parameters could be modified to avoid that condition—effectively a closed-loop quality feedback loop.

Those were the initial requirements. What we did not realize was how many counterfeit materials were out there in the market, and how much of a requirement there was by these parties to use traceability to combat that.

When we look at counterfeits, they can take many forms and are basically any material that is not as intended or presented. Examples range from areas where distributors have substituted or used alternate vendors, all the way to cases where dummy parts have been specifically manufactured. Sometimes, we find materials that were filtered into good and poor quality, where rejected parts had found their way back into the supply chain.

When companies are desperate to get components to complete production, opportunities for counterfeit materials increase. For example, if you are making a laptop with 2,000 components and there is just one tiny passive component missing, it’s game over in manufacturing to make that work order. In that situation, people will do almost anything to get that product made and out the door, including buying materials from the gray market, which simply means they don’t know the true source of those materials. There are bad actors who use these opportunities to try to make money through the substitution of counterfeit parts of some kind for genuine parts. We’ve seen many cases where people have found cloned chips— some that seem to work but not very well, and others that are little more than a plastic box with legs on it.

To read this entire conversation, which appeared in the August 2020 issue of SMT007 Magazine, click here.