3 Tips to Thwart Counterfeiters

As long as commerce has existed, so have thieves. Counterfeiters aren’t going anywhere in the electronics industry — and they are getting more sophisticated. It’s time for supply chain professionals to pick up the gauntlet and up their game in terms of evading the efforts of bad actors. Unless buyers do things differently, nothing is going to change.

In the past, the efforts of those making counterfeit electronic parts were nothing short of barbaric. It was common to blacktop completely different parts and pass them off as a rarer commodity. We saw old parts being misrepresented as new and standard commercial parts being represented as industrial grade. These counterfeiters aimed to pull the wool over their customer’s eyes long enough for the check to clear.

Now, the discernible differences between some counterfeits and the real thing are negligible. Further, there are more fake components in the product stream. In 2021, 101 wire fraud cases were reported to the ERAI, up from 70 in 2020 and 17 five years ago. With these new and sophisticated iterations, combined with more fraud, the chance that parts will be put into a product that might lead to a catastrophic failure is higher as well.

The temptation is to say “only buy authorized or franchised parts.” In a time where shortages are substantial, though, that may not be reasonable. I would recommend three things to focus on in terms of mitigating counterfeit components:

• Get educated on counterfeiting standards. The industry has developed a number of standards around counterfeit parts. Buyers need to educate themselves about the scope and focus of these different standards. There are currently more than two dozen that address various industries and areas of the supply chain. If you ask your distributor to test according to a particular standard, for example, make sure you understand exactly what you are asking and why.
• Understand your own Ts & Cs. Be sure to read and understand the terms and conditions of your organization’s contracts. Too often, a standard contract includes language in terms of specific parameters (such as asking that a part not be more than 18 months old, even though that part was the end of life four years before that) that may not be reasonable for a hard-to-find part. If you aren’t aware of your own policy and procedures, it casts a negative light on the organization because your suppliers and customers may wonder what other standards and requirements are slipping through the cracks.
• Focus on relationships. It may sound a bit old school but picking up the phone and talking to people goes a long way to building a trusted relationship. E-mails are more often ignored, and things get lost in translation. With e-mail, we are stepping away from those relationship connections — and one real key to counterfeit mitigation is knowing your supplier. You can’t build the right kind of relationship via e-mail. Also, don’t forget to forge relationships with your in-house engineers. If you know them, it’s more likely you can collaborate on a creative way of managing hard-to-find part scenarios.

Counterfeiters take advantage of people who are in a hurry and looking for quick answers. Take some time to understand what’s going on—and to look for solutions that don’t require making a risky buy from an unknown supplier. In the end, you’ll save time and stay ahead of the counterfeiters.

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