Fake, rattle and roll

Mike Richardson reports. Counterfeiting has become a global phenomenon as more component production migrates offshore. Failure to plan against the threat of counterfeit parts finding their way onto aircraft could leave manufacturers with production headaches or worse still, parts that could compromise the integrity of the entire programme.

However, help is at hand as a number of specialised anti-counterfeiting organisations now provide comprehensive methods of training and support, including product traceability throughout the supply chain, BoM health checks and detailed reports on whether parts are active, end of life (EoL) or no longer being manufactured.

Q: What kinds of trends are we seeing for counterfeit components in the aerospace industry? Are we seeing an upsurge in cases and if so, why?
Peter Marston, consultant to Rochester Electronics (www.rocelec.com): “As in all industries, there has been an alarming increase in the number of counterfeit components infiltrating the supply chain. A recent study by the Office of Technology Evaluation, a branch of the US Department of Commerce's Bureau of Industry and Security, predicts a continuing increase. As original manufacturers retire necessary components from production, users are forced to seek replacements elsewhere, leaving the door wide open for unscrupulous dealers to provide inferior products. The study recommends that only by buying from the original manufacturer or a trusted authorised distributor can customers be assured of authentic parts.”

Charles Battersby, consultant to Semelab and Component Obsolescence Group (COG) director (www.semelab.com): “Counterfeiting of components into the aerospace industry is not new. Before the Berlin Wall came down and the subsequent liberalisation of trade with China, many counterfeit products came from Eastern Europe. I witnessed counterfeits being built into aircraft systems at this time and have seen a number of bizarre product returns - many were badly disguised fakes with no real chance of ever working. Nowadays, supply routes have moved on with China and quite a number of other regions contributing to the trade.”

Roger Rogowski, alliance manager, United Kingdom Electronics Alliance (www.ukelectronicsalliance.org.uk): “Multiple factors contribute to the growth of counterfeit components. Increased levels of global trading, particularly manufacturing in low cost regions, has enabled the proliferation of counterfeits. Internet trading has also increased the speed and the ease that buyers and sellers conduct transactions, often with untried vendors. RoHS and increasing component technology churn contribute to availability problems, which counterfeiters are only too happy to help resolve, while low cost copying of semiconductor layouts makes counterfeiting increasingly profitable. Finally, the introduction of WEEE has increased the supply of scrap electronic equipment from which components can be extracted and re-marked.”

Q: Please provide examples of the kinds of damaging consequences counterfeit components can cause an aerospace OEM?
Marston: “Counterfeit components have the potential to cause personal injury and death through product failure, as well as manufacturing downtime. The loss of revenue from counterfeits is incalculable. Companies can guard against counterfeits by establishing inspection and testing protocols, personnel, and facilities, but this can only be done at great expense and with no guarantee that all counterfeit parts will be identified. It's even more expensive to redesign systems and products to match available components – and there is still the risk that those components will soon face EoL.”

Battersby: “Attributing a cost to the penetration of counterfeits is almost impossible to answer. Much depends upon the defences that the component buyer/specifier puts up against such problems. Fortunately, many system failures due to counterfeits will be found through the policy of having redundant backup systems built into all critical flight controls. All being well, a component failure will be flagged up without any danger to the aircraft. However, I believe that such double or triple failures have been seen resulting in loss of control, navigation, communication etc.”

Rogowski: “In terms of cost, average industry cost structures suggest the failure of a counterfeit component costing 40p might cost £40 when failing test at PCB assembly, £500 at system integration and £1,000 to £2,500 when operational. This excludes consequential loss liability, loss of customer goodwill and reputation. However, the consequences of system downtime or even critical system failure where counterfeit components are used in safety critical applications probably don't need spelling out.”

Q: Do companies make enough provision to plan for the danger of counterfeit components?
Marston: “Some companies do take advantage of EoL notifications from original manufacturers. However, even an end of production buyout may not satisfy future requirements, forcing buyers to turn to unauthorised distributors and the grey market. Some aerospace companies are starting to recognise the vulnerabilities of this sourcing route but are finding it difficult to change.”

Roger Buckley, business development at Eltek Semiconductors (www.eltek-semi.com): “Generally the aerospace equipment primes now require that their component suppliers take all precautions possible to ensure parts that are delivered are traceable parts or, if traceability has been lost within the supply chain, to ensure parts are tested to verify their authenticity.”

Q: What are organisations doing to address the issues connected with counterfeit components?
Marston: “Both the European Semiconductor Industry Association (ESIA) and the Semiconductor Industry Association (SIA) have established active anti-counterfeit task forces, circulating guidelines to manufacturers and end users. COG runs workshops and has published a guideline booklet: ‘Avoiding the counterfeit component minefield'. The UKEA runs seminars and has established an online database where instances of counterfeit components can be reported.”

Rogowski: “The UKEA is raising awareness of the issue by organising and speaking at seminars and conferences, and working with relevant government departments to improve liaisons, especially on sharing intelligence on known counterfeiting activities.”

Buckley: “With the activities of COG, UKEA and other organisations holding events and workshops there is now more awareness of the issues of counterfeit parts and electronics buyers are being given necessary resources to help avoid the costly problems of counterfeit parts being assembled into equipment.”

Q: Looking ahead, what do you see as the major counterfeit challenges facing the aerospace industry in 2010?
Battersby: “Just a continuation of the present scenario - but the players will move around the world. As one jurisdiction clamps down on their rogues, then more will appear in another region. We still have significant counterfeiting activity on our home ground.”

Marston: “Unfortunately, original manufacturers are retiring more and more components that are considered critical to the aerospace industry. Also, we see counterfeiters employing more sophisticated methods to manufacture inferior and/or non-working parts and pass them off as genuine. The best defence any user of critical parts has is knowledge – be aware of the threat and take steps to avoid counterfeit parts. Buy only from the original manufacturer or a trusted, authorised distributor.”

Rogowski: “At a time when economic challenges dominate boardroom agendas, it's vital OEMs don't lose sight of the financial consequences of failing to develop and maintain robust anti-counterfeiting policies. This needs a twofold approach: review and improve their internal processes, and mandate similar processes in their supply chain. Implementing an effective anti-counterfeiting management strategy could be one of the soundest investments an aerospace OEM could make!”