Tag Archives: counterfeits

Stopping the Fakes

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The US on Saturday (hey, good to know I’m not the only one working weekends) signed a seven-nation agreement to implement an infrastructure for preventing counterfeits. Other assignees include Australia, Canada, Japan, Korea, Morocco, New Zealand and Singapore, while the EU, Mexico and Switzerland appear to be about ready to come on board as well.

I’m not entirely optimistic this will staunch the flood of fakes pouring into the US — without China’s active involvement, that just cannot happen — but it’s good to be on the same page with the majority of our other trading partners. Perhaps together we can accomplish that which we cannot do alone.

 

 

The Free Flow of Fakes

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While it’s true that counterfeit parts are pervading all aspects of the electronics supply chain (not to mention consuming all amounts of oxygen from industry pundits such as yours truly), is it possible our sense of fear is overblown?

By fear, I don’t mean “risk” — that’s the inherent chance of failure taken by, knowingly or not, using a fraudulent part. Rather, I mean the “if I do this I might get someone hurt and/or lose my job” feeling.

Yesterday, the SMEMA Council, a group of electronics assembly equipment OEMs, admonished customers to use only authorized channels for replacement parts and service. By using fake parts, SMEMA said, the risk (there’s that word again) users take is that the assembly equipment OEM could void their warranty. That’s a tough nut to swallow, considering the price tag of new placement machines, testers and screen printers.

The question I have is, why would SMEMA even feel compelled to issue such a statement? Faked parts (one old friend says in China, copyright means the “right to copy”) are ubiquitous and systemic. Two US senators this week accused China of blocking a probe into counterfeit electronics by refusing visas to investigators, but it’s hard to know whether the US is truly wants to stop the flow of knockoffs goods or just put pressure on China in order to exact other reforms or negotiating leverage. Indeed, so-called fourth shifts are not only common, they have been for years. So forgive me for being cynical when a few bureaucrats say they want to do something about it now.

In my opinion, there’s no end in sight to the free flow of fakes because, in fact, America and Europe don’t really fear the potential outcome. For a decade, manufacturing programs have been shuttled en masse to China. And while OEMs pay lip service to the notion that their IP is their livelihood, they aggressively seek out the manufacturing partners of their competitors, thus simultaneously ensuring their IP will be shared and that their products will be commoditized.

Let’s put it another way. If company ABC contracts to China and learns a few months later that every Chang, Wang and Li is walking around with a cheap duplicate of their widget, ABC may snort and snarl a few times, but will it fire the folks involved in outsourcing? Highly unlikely. But if that widget never gets built, or ships late because a machine is down or an oscillator is unavailable, heads will roll. Supply chain employee is thus naturally emboldened to take risks that they otherwise might be unwilling to contemplate. The wheel is set in motion.

SMEMA is trying to reorient customers as part of a much-welcome attempt to demand accountability, and I wish them luck, but I don’t think it will make much difference. The corporate buyer culture has changed.

Don’t believe me? Just go to the EMSInsider group on LinkedIn and look at all the listings by members looking for spare parts. Utilizing only approved vendors is nice and all, but when product needs to be shipped before the quarter’s up, the AVL is an industry anachronism.

Shining a Light

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With all the talk about counterfeits — most of which takes the manner of the over-the-backyard-fence gossip — I was glad to see this announcement today.

A company that makes bearings announced the confiscation of over 30 tons of counterfeits at a non-authorized dealer in northeast Czech Republic. (The raid also uncovered faked products from other bearing manufacturers.)

It’s not so much that the rats were caught. It’s that SKF, the bearing maker, went public with the news.

Typically, companies prefer to keep such news hush-hush, probably so as not to unnerve potential customers. Shining the light is better, however. It makes clear the scope of the problem, the steps being taken to counter it, and most important, it reminds customers to buy only from authorized sources.

There aren’t a whole lot of measures we can take to protect ourselves from counterfeits. But the measures we can take are highly effective — provided we follow them, and all the time.