Too Good To Be True?A Counterfeit Story…
18 July 2019
Mike McRandall and Don McFarland – NSF-ISR, LTD
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Introductions
2
Mike McRandallBusiness Unit Manager, Aerospace
Don McFarlandTechnical Manager, Aerospace
Registration Management Committee – July, 2019 - Torrance, CA
What is Counterfeit?
An unauthorized copy, imitation, substitute, or modified part (e.g., material, part, component), which is knowingly misrepresented as specifiedgenuine part of an original or authorized manufacturer.
Note: Examples can include, but are not limited to the false identification of marking, labeling, grade, serial number, date code, documentation, or performance characteristics.
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Seem Legit…
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What is a Suspect Unapproved Part?
A part for which there is objective and credible evidence indicating that the part is likely an unapproved or counterfeit part.
Note: This includes articles shipped to an end user by an external provider who does not have direct delivery authorization from the approved production organization; new articles that do not conform to the approved design / data; articles that have not been manufactured or maintained by an approved source; articles that have been intentionally misrepresented, including counterfeit parts; and articles with incomplete or inappropriate documentation.
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I Didn’t See That Fix In The Manual
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Activity – Part 1
• On the next slide, 100 samples will be provided (Blue square only)
• In the allotted inspection time (20 seconds), you will quietly count the number of “different” items in the sample area (based on text color only)
• Keep your answer to yourself
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Count the different colored items
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Activity – Part 1
• How did it go?
• How many did you catch?
THERE ARE 21
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Some Items Are Easier To Catch
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Some Are More Difficult
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Some Even Require (Expensive) Testing…
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We Need To Acknowledge…
…this is NOT just a problem with electronic components
• Based on 2017 US CBP data, >2% of global trade is in counterfeit from one country
This is only what was caught…
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It Is NOT Just Electronics.
Registration Management Committee – July, 2019 - Torrance, CA 14Source: Conde Nast Traveler – John Grimwade
Historically, On Aircraft…
Detection Is The Last Line of Defense…
Verification and test methodologies to DETECT (not prevent) counterfeit parts:
• Visual external inspection (resurface, remarking, etc.) –e.g. IDEA-STD-1010
– Independent Distributors of Electronics Association’s Inspection Standard
• X-ray Inspection
• Metallurgical Analysis (e.g. XRF, Spark/Arc, etc.)
• De-capsulation and Cross-section
• Advanced microscopy (e.g. SA, SE, etc.)
• Leak testing
• Functional testing
• Performance testing (e.g. sheer, flammability, solderability, etc.)
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Once It Is Found…
• Segregate and control suspected or known counterfeit
• Ensure the products are not re-introduced into the supply chain– Legal aspects of keeping
parts that you wont pay for?
• Report through appropriate government and industry systems
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Activity – Part 2
• Same as before…
• In the allotted inspection time (5 seconds), you will identify the number of “wrong” item(s) in the sample area
• Keep you answer to yourself
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Find the “wrong” item(s)
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Activity – Part 2
• How did it go?
• How many “wrong” items did you catch?
In case you missed it, only 1 this time
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Activity - Debrief
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Activity – Debrief, cont.
• Fewer defects allows inspection to be more capable
• Prevention is more effective than inspection
• With respect to counterfeit, we (auditors) tend to focus heavily on “detection” / inspection programs
– Ignorance to other “prevention”- centric aspects?
The real reason for this activity is…
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…For the record
• That makes 4 meetings in a row
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Interesting…
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“An ounce of prevention is worth a
pound of cure”
- Benjamin Franklin
An Example We All Care About…
• US Secret Service created to “suppress counterfeit currency” (among others)
– Signed on 14 April 1865
– 7000+ in 135+ offices
• “Detection” prioritized
– Not everything (~$20+)
– Detection pens ineffective
– Daily detection through banks / carriers
• Engineering changes
– Design improvements for high denominations are more common / frequent
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Also Interesting…
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“An ounce of prevention is worth a
pound of cure”
- Benjamin Franklin
“An ounce of prevention is worth more than a
pound of cure.”
- Warren Buffett
Is This “Prevention”?
• Controls for acquiring parts; from original manufacturers, authorized / franchised distributors, or other approved sources.
• Assuring traceability of parts and components to their original manufacturers:
– Original Equipment Manufacturer (OEM) or
– Authorized manufacturer (e.g. incase of PMA, direct delivery authorization)
Good enough?
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Even from the OEM / Source…
27
Suzhou New Hongji Precision
Parts Co Ltd (NHJ)
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Risk-Based Thinking
• Supply issues drive risk
– Expensive, High Demand, Low Supply
• Obsolescence monitoring, design decisions and parts selection / monitoring to be appropriate for service life of product
– Relationship with supply chain, to provide better visibility to market demands / changes
• Monitoring external sources (Access to databases, information letters from OEM):
– GIDEP – Government/Industry Data Exchange Program
– ERAI - Subscription service for supplier
– FAA / CAA notifications – SUPS Notifications
– OASIS (Through “watchlist”)
– News / “Google”
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Once Defined, People Need To Know
• Engineering personnel for risk and obsolescence management
• Purchasing / EP personnel in trusted source selection and requirements
• Inspection personnel for detection of counterfeit items (visual / test)
• All in program aspects, OPSEC and risk identification
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AS91XX – Clause 8.1.4
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AS91XX – Clause 8.1.5
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AS91XX – Clause 8.4.3
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AS91XX – Clause 8.1
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AS91XX – Clause 8.3.3
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The Standard Is Generic, but…
• The customer contract dictates “the requirement”– AS5553 - Counterfeit Electronic Parts; Avoidance, Detection, Mitigation and
Disposition
– AS6462 - Verification Criteria for AS5553
– AS6081 - Fraudulent / Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition - Distributors
– AIR6273 - Terms, Definitions and Acronyms – Counterfeit Materials or Electrical, Electronic and Electromechanical Parts
– ARP6178 - Fraudulent / Counterfeit Electronic Parts; Tool for Risk Assessment of Distributors
– ARP6328 - Guideline for development of counterfeit electronic parts; Avoidance, detection, mitigation and disposition systems
– AS6496 - Fraudulent / Counterfeit Electronic Parts: Avoidance, Detection, Mitigation and Disposition
– AS6171 - Test Methods Standard; General Requirements, Suspect/Counterfeit (SC) Electrical, Electronic, and Electromechanical (EEE) parts
– AS6810 - Requirements for Accreditation Bodies when Accrediting Test Laboratories Performing Detection of Suspect / Counterfeit IAW AS6171
– DFARS 252.246-7007 - Contractor Counterfeit Electronic Part Detection and Avoidance System
Lots of documents / standards, but same basic underpinnings
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Common Program Elements Include:
• Uses detection as a necessary component, but not the most effective one
• Is based on the organization’s context
• Is defined, but dynamic, and multi-functional
• Minimizes opportunity of deception, through prevention
• Uses a risk-based approach – high value, obsolescence issues, lead time / supply issues, etc.
• Improves awareness, to relevant interested parties
• Evaluates and improves controls of external purchases to prevent fraud
• Positively controls suspect / counterfeit parts, to prevents re-entry into the supply chain
• Confidential – “they” only have to get it right once
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As An Auditor…
• IAQG Evaluation Guidance Material includes:
PREVENTION MATTERS, so focus on it!
And, please don’t over emphasize detection…
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Thank You!References: AS91XX Standards, IAQG SCMH,
IAQG Evaluation Guidance Material, ERAI, IDEA, Conde, US Customs, US Treasury
Please contact us:
Mike McRandallAerospace Business Unit Manager
m. 734-904-0491
Don McFarlandAerospace Technical Manager
m. 734-645-8139
Registration Management Committee – July, 2019 - Torrance, CA
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