U.S. counterfeit regulations could affect global tech supply chain
Summary: The proliferation of counterfeit goods in the tech market has been growing, causing the U.S. Department of Defense to take stricter actions.
New regulations on counterfeit goods from the U.S. Department of Defense could have significant ramifications for the international tech supply chain, among others.
A new report from IHS posits that 362 non-U.S. companies worldwide that are supplying the U.S. government could be directly impacted by counterfeit regulations, with many more indirectly affected.
Greg Jaknunas, senior product manager of supply chain solutions at IHS, explained in a report that this will likely happen as defense contractors place requirements on their suppliers, and those rules will ripple down to other suppliers on the food chain.
This could have a severe impact on other global industries as well considering that IHS noted non-U.S.-based suppliers accounted for more than $2 billion worth of items to the U.S. government during the five-year period between 2007 and 2011.
The proliferation of counterfeit goods in the tech market, in particular, has been getting more attention lately. In February, it was reported that the number of reported counterfeit parts have quadrupled since 2009.
Supply chain companies reported 1,363 separate and verified counterfeit-part incidents worldwide in in 2011, most of them being for commercial electronic parts that are widely used in the technology sector.
Furthermore, earlier this month, IHS also published findings that counterfeit semiconductors have seeped through corporations and the military, and that they are a $169 billion risk to the electronics supply chain.
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- Digital signage booming with social media opportunities looming
- All-in-one desktops driving demand for 2.5-inch hard drives
- Apple's Foxconn flap may pinch contract manufacturers
- Smartphone, tablet sales driving mobile, touchscreen chip markets
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Talkback
Counterfeit covers a broad range of topics
People keep saying that the counterfeiters are getting more sophisticated, but it's the beancounters and crooked managers that make it happen. The beancounters want the lowest-cost parts, no questions asked. They will go through a risk analysis to decide that using bad parts is cheaper even if they do get returns or get sued. To them, it's an acceptable trade-off, and the government keeps coming back to the same contractors that cheated them time and again. Colonels and generals who oversaw purchases end up with nice corner offices with those same companies after they retire from the military. It hasn't really changed much in the last 50 years. Nobody ever goes to jail, so it will just continue despite any new "regulations".
Build it to price, thats the problem
You mention power supply capacitors (unreliable at the best of times) I have first hand experience of this.
I was once involved with testing a large Static UPS which was destined for a hospital. These, as you probably know, have some huge Capacitors in them often running at high voltages.
During the testing one of these failed, "failed" is an understatement, the thing blew up like a bomb!
It destroyed itself and blew out a couple of windows but luckily nobody was hurt.
The manufacturer's technician was called in to carry out the inevitable "post mortem" on it and his comment on seeing it was "Oh coupling C's gone we've had a few of these pack up, we keep telling 'em they're not up to it, but they won't wear it"
And this was from a large, reputable,manufacturer and a unit costing 40,000+, I don't know what that is in dollars but it was an American manufacturer. Not that this problem is confined to the states it is world wide
An expensive, and vital piece of equipment, in a safety critical application.
It doesn't bear thinking about if it had failed in service, that's why we were testing it in the first place.
All this down to "beancounters".
As you rightly say no amount of legislation will stop it as long as there are people out there making a fast buck.
Why did George Washington get stiffed at Valley Forge?
*BINGO*
Given how much counterfeit technology is on the market now,
http://www.c-span.org/Events/Senate-Investigates-Counterfeit-Parts-in-Military-Equipment/10737425339/
why the sensationalizing of an act that desperately needs to be done?
It's about time
The government will jump up and down, then fire the wrong person
I don't understand
It also does not say what the effect would be, or why the effect would occur.
Please do the reader a few favours to help us follow the story.
Nothing new here. Keep moving.
Another story involved one of the hard drive makers a few consolidations ago. Somebody had a huge delivery with a hard deadline and made it by shipping . . . tiles. Pallet loads of ceramic tiles, instead of hard disk drives. Even more-or-less honest people get desperate and do amazing things.
In consumer affairs, counterfeiting can take the form of running a prized production line for a third shift off the books. Worse cases, though, include falsely marking known inadequate components that may wind up in medical gear, repackaging rejected return merchandise as new, etc. If a quality circle model is in place, it is quite possible that defective components won't even be statistically tested before a ruinous cluster of failures takes place.
Is one paranoid for thinking that some counterfeiting is not merely for illicit aggrandizement, but is deliberately crafted to cause harm? As far as DoD is concerned, I recall this particular question leading in the past to a "buy American," "know-your-vendor," and "test everything" policy that added significant program costs but assured (then) that fakes and defects were minimized. More recent acquisition policies seem trapped between naivete and mendacity--Gordon Gekko, call your office.
I beg to differ, somewhat...
Most of these problems arise when specific brand name products are used at design stage but substituted at production stage strictly for cost reduction purposes.