In a Q&A session, Aerospace Manufacturing hears the views of Roger Rogowski and Ian Blackman, co-owners of Anti-Counterfeiting Forum to discover whether counterfeiting is still a serious problem for the industry.
The counterfeiting of components in the aerospace industry is nothing new, and yet now more than ever, a failure to plan against the threat of counterfeit items finding their way into the supply chain could compromise the integrity of an entire aircraft programme.
Q: Is counterfeiting still a recognised problem?
Rogowski: “It’s still a problem, but whether it’s as widely recognised as it should be is a moot point. It's certainly been recognised in the defence sector, which has been the main driving force behind the development and adoption of best practice in recent years. However, given that 71% of counterfeits are copies of obsolete parts, other sectors requiring long-life systems need to apply the same level of recognition of counterfeit risk as the defence supply chain do.
Blackman: “Reporting of suspected counterfeit devices continues to occur although there is a feeling that reporting suspected instances in the US DOD Supply chain incurs the risk of extra project reporting and the requirement to prove that due diligence had been applied within the Procurement process. So, some reporting may not occur. The effort being undertaken by aerospace companies to work in efforts to develop and publish anti-counterfeiting guidance surely demonstrates that the issue is a topical and critical one.”
Q: Are policing and customs policies making any impact?
Rogowski: “For electronics in the UK and Europe, there are problems because shipments of counterfeits are only going to be identified at the border with intelligence about where these shipments are coming from and how they are being shipped. This is a moving target because the counterfeiters will always try to stay one step ahead. To be effective means industry and the border forces maintaining regular dialogue about the current trends, but this isn’t happening because in recent years, resources involved in border control have been more focused on the problem of illegal migration.”
Blackman: “Where intelligence has been forthcoming some significant seizures have been found. The European Semiconductor Industry Association (ESIA) has supported some raids and have identified certain shipping routes and shipping practices that are regularly checked. However, the impact on the overall number of shipments is unknown.”
Q: What are component manufacturers and distributors doing to reduce the risk to buyers?
Rogowski: “Component manufacturers are collaborating to introduce covert and overt product security systems to enable their customers to distinguish between genuine and counterfeit parts. There's no doubt that, where goods have come through the authorised distributor network, the risk of counterfeits are reduced and so many of the non-franchised distributors have adopted counterfeit management practices to counter the threat. Sourcing through the grey market will always be with us, especially when sourcing obsolete parts and the counterfeit risk can be minimised by sourcing parts from non-franchised distributors whose internal processes are compliant to, or better still, who are certified to one or more of the recognised counterfeit management standards. Third party certification is still in its early days but more distributors are taking this route and this will benefit the supply chain hugely.
“A potential problem on the horizon is that with so many component manufacturer consolidations taking place in the last twelve months, it's probably inevitable that there will be significant product rationalisation and obsolescence in the near future and that will result in another wave of counterfeits.”
Blackman: “Component distributors are educating many users by promoting the best practice counterfeit management practices. Many UK-based component distributors are offering better service agreements to store items after last manufacture dates and to support product redesigns to reduce the need for grey market purchases although this is yet to make any significant impact.”
Q: Will a new customs regime post-Brexit change the risk?
Rogowski: “While Brexit negotiations haven't even started yet, it's difficult to predict how that might change the risk, except that the Prime Minister has said that the UK will not be part of the EU Customs Union. While we have free movement of goods, detection at the border is only going to be as good as the weakest link among 28 current member states, so there is a reasonable argument that, by bringing back control to our own border, we have greater control over detection. On the other hand, the UK Border Agency is already stretched to the limit and unable to pay much attention to incoming counterfeit electronic and electrical parts and taking on checking of all goods at the border is going to require additional resource.
“Another issue to watch is the Common Travel Area arrangement between Northern Ireland and the Republic because the Prime Minister has said that there will be no return to controls across the border post Brexit and that will be a vulnerable area unless full customs checks are put in place.”
Blackman: “The recent announcement to step outside the EU Customs Union and possible implications on World Trade Organisation membership are yet to be understood, but manufacturers and trade associations are fearful that the UK does not have sufficient resources to deal with customs independence nor will it be able to quickly put extra resources in place. The fact that duties are low or absent does not encourage customs to intercept packages routinely.”
Q: What can buyers and engineers do practically to help themselves?
Rogowski: “If they aren't already, buyers and engineers should be evaluating the level of threat to their own businesses and the chances are that they are significantly underestimated currently, especially in sectors engaged with health, safety and service critical applications. Having made that evaluation, if the cost/benefit is on the side of implementing an appropriate counterfeit management system, then they should seek advice about the steps to take.
“A good starting point would be our own Anticounterfeitingforum.com, which is probably the most comprehensive, current and objective free to access resource available on the issue. Our recent counterfeit management seminar was held in London on 22nd March and featured speakers that talked about how they set up and manage counterfeit management systems.”
Q: Do standards exist that can be passed down the supply chain?
Rogowski: “The major recognised international standards bodies including BSI, ISO, IEC and SAE have all developed standards for the management of counterfeits in the supply chain. Anyone interested in finding out more can view the full list of currently available standards on Anticounterfeiting.com.”
Blackman: “The effort that is required to read and understand these standards will be worth it if even one instance of counterfeit parts is intercepted prior to you delivering to your customer. The long-term confidence lost from such an occurrence are at least as significant as the performance and reliability concerns from shipping non-conforming product. It is also important to support procurement efforts to locate hard to find and obsolete products to select appropriate sources and minimise risk to products.”