The Only Way to Solve the Counterfeit Electronic Component Problem

By Logan Wamsley

For every sign of progress regarding attempts to fight counterfeit issues in the electronics manufacturing industry, the more it becomes apparent that the industry has a long way to go before this dangerous risk is fully mitigated.

For example, just this week, the U.S. Congress introduced the Secure E-Waste Export and Recycling Act (SERA), which is designed to stop the flow of e-waste and require domestic recycling of all untested and networking electronics — all material that often finds itself back in products such as phones and consumer electronics, but also critical products such as healthcare devices and even military equipment. According to military reports, it is estimated that 15 percent of all spare and replacement parts for its weapons, vehicles, and other such equipment are counterfeit in origin.

If the direct dangers to human health and safety were not enough, the counterfeit issue is also taking a significant toll on the national economy as well. Current estimates, such as the one offered by EBN, suggest that counterfeit electronic components are responsible for $5 billion in annual profit losses.

National recognition of the issue at hand is a step in the right direction, but to truly counter the rise of counterfeit components and the threat they pose to consumer safety, equal steps must be taken at the manufacturer level to ensure that each and every component purchased on the open market goes through authorized channels where each party has an open commitment to transparency and traceability.

The easiest way to ensure this is to purchase all the critical electronic inventory directly from its point of origin: the component manufacturer. Through the Partstat Last Time Buy Solution, for example, an OEM can acquire five, 10, even 20 years or more of critical electronic inventory direct from the component manufacturer in a single transaction. Additionally, as part of the solution, we in fact purchase this inventory, in full, on the customer’s behalf using our own working capital, allowing the OEM to use their on-hand capital to hire new employees, fortify infrastructure, enter into new markets — any initiative that would otherwise need to be put on hold. Lack of storage capabilities is not an issue; not only do we purchase the inventory through our own secure channels for the customer, we will also store it for as long as needed in our own facilities, including a custom storage vault, and ship it on a delivery schedule personalized for the customer.

Most importantly, however, a Last Time Buy Solution ensures, without any assumptions or predispositions, that the customer’s supply chain is insulated from compromising counterfeit inventory. Traditional counterfeit mitigation strategies, such as the analysis of date codes, packaging inspections, etc. can detect a number of counterfeits after the point of sale, but reactive strategies are no replacement for a proactive, secure supply chain management strategy that renders such burdens unnecessary.

Securing your supply chain and the integrity of your products should take priority over all other initiatives — but it’s nice to preserve working capital while doing it!