DMSMS Standardization 2011 - Integrated Methods of Counterfeit Risk Mitigation

Integrated Methods of Predictive
Obsolescence, Standards Management,
and Counterfeit Avoidance

Mr. Rory King, Design & Supply Chain, IHS Inc.
Mr. Greg Jaknunas, Design & Supply Chain, IHS Inc.
Thursday, September 01, 2011
DMSMS Standardization 2011
3:30 PM to 5:00 PM Concurrent Sessions
Standards and Databases for Counterfeit Mitigation
Session Chair: Mr. James Stein - Defense Standardization Program Office
Copyright © 2011 IHS Inc. All Rights Reserved.

About IHS Inc.
A Leading Information Provider

• Founded in 1959: To provide product • Tens of thousands of customers and hundreds
catalogs for aerospace engineers
of thousands end-users in 180+ countries
• Today: Leading global source of critical • Customers include nearly 70% of US
information and insight dedicated to Fortune1000; 80% of Global Fortune 500
providing the most complete and trusted
information and expertise Strong, Growing Products and Financials:
• Public, NYSE: IHS (2005)
• Employs 5,100 people in 30 countries • Revenue: $1.1B (2010)

Areas of Expertise & Content
Energy & Design & Defense, Risk & EHS & Country & Industry Commodities,
Power Supply Chain Security Sustainability Forecasts Pricing & Cost

2

Counterfeits by the Numbers
Magnitude of a growing, global problem

$1.7 Trillion = Total Value of Global Counterfeits & Pirated Products
…and 2.5 Million = Jobs Lost or Not Created as a Result
According to: Frontier Economics, 2011

$100 Billion or 10% = Amount of Global Technology Counterfeited
According to: Alliance for Gray Market and Counterfeit Abatement and KPMG International, 2005

$1.4 Billion = The Retail MSRP of U.S. Counterfeit Seizures in 2010
According to: US Customs & Border Protection, US Immigration and Customs Enforcement, 2011

40% Impacted = Percent of U.S. Defense Impacted by Fake and/or
Damaged Parts
According to: U.S. Government Accountability Office (GAO) , 2010

26,794 = Counterfeit Electronics Incidents Reported from 2005-2008
According to: U.S. Department of Commerce, Bureau of Industry & Security, OTE, January 2010


A Big Deal
Risks to Company, Brand, and Performance

What is the Impact of Counterfeit Electronics?
(% Respondents)
Undermine compliance claims 44%
COMPANY

Compromise device/product security 37%
BRAND

Expose contractual liability 42%
&

Expose product safety / legal liability 55%
Damage brand / reputation 71%
PERFORMANCE OPERATIONS

Product launch delays 36%
PRODUCT

Production line stoppages 57%
&

Customer returns/recalls 67%
Product quality/reliability failures 84%
Increase product dev’pt time/costs 38%
FINANCIAL

Add to unit costs 51%
Inhibit sales / customer sat 62%
&

Reduce expected product life 64%
Increase warranty/maint. costs 65%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Source: Benchmarking Counterfeit & Inferior Grade Components,
Supply & Demand Chain Executive & IHS Inc., April 2009
Copyright © 2011 IHS Inc. All Rights Reserved. 4

A Huge Deal
Loss of Life and National Security in Jeopardy

Shown: DailyTech LLC, June 17, 2011
Source: Benchmarking Counterfeit & Inferior Grade Components,
Supply & Demand Chain Executive & IHS Inc., April 2009


Where are they going?
U.S. Defense Electronic Parts Supply Chain


No Supplier is Immune from Risk
Lack of accountability and traceability allows counterfeits to enter

“It is not uncommon, however,
for authorized distributors to
purchase parts outside of the
OCM supply chain in order to
fulfill customer requirements –
58 percent purchase parts from
other sources.

Specifically, 47 percent of
authorized distributors procure
parts from independent
distributors, 29 percent procure
from brokers, and 27 percent
procure from Internet-exclusive
sources.”
Source: U.S. Department of Commerce,
Office of Technology Evaluation,
Counterfeit Electronics Survey,
November 2009.
7

Objective: Stay in the Trusted Supply Chain
Best practices suggest a cascading level of degrees of risk

1. Direct from the Factory (OCM)
2. Approved Vendor / Manufacturer (AVL / AML)
3. Franchised and Authorized Distributors
4. Approved Independent Distributors & Brokers
5. ERAI Members
6. Low Risk and Qualified and Sources of Supply
• valid sources of real stock, replacements, or alternate designs
• from qualified government suppliers & manufacturers
• with healthy supply chain, inventory, and lifecycle status
• and vetted for bad supplier conduct or counterfeit part incidents
----------------------------------------------------------------------------------------
Stop Below this line is high cost risk! Redesign and emulation are “lower”
cost than (high risk) low cost unknown parts/sources.

SAE International:
G-19 committee develops set of standards to mitigate counterfeits

IHS Standards Expert™ is a standards management solution providing desktop access to critical standards,
specifications, codes, and related documents from professional societies, trade associations, and national/international
standards developing organizations, with tools to manage standards across departments and divisions.


Purchasing Process Shall…
Assess risk… including reports from GIDEP and ERAI


Defense Adoption and Counterfeit Incidents
GIDEP and ERAI are the counterfeit reporting entities

DOD Adoption: August 31, 2009 Incidents: 91% of reports via ERAI

Source: IHS Inc. 2011

Link Between Counterfeits and Obsolescence
Greatest risk from counterfeiters targeting obsolete parts

As of May 2011, a minimum of
54% of IHS-ERAI reported
counterfeit incidents were
component lifecycle status of
EOL/Lifebuy or Discontinued.


Obsolescence Mgt: Component Level
Decision Support Research, Simulation, and Analysis
Semiconductor and Component Lifecycle Component Management tools, like
New Product Product Change End of Life (EOL) or
Introduction (NPI) Notification (PCN) Discontinuance (PDN)
IHS Parts Universe, combine
LTB Notice obsolescence forecasts, lifecycle
Maturity
Growth
Decline
documentation, and other decision-
LTB

Introduction
YTEOL Phase-out support information to automate and
Today
Obsolete
improve obsolescence management.

IHS 4DOnline Parts Universe provides single-point access to current technical, lifecycle, compliance and sourcing information for
millions of electronic components from over 1000 suppliers. It includes cross-references, datasheets, and environmental documents .


Obsolescence Mgt: Entire BOM/Platform
Decision Support Research, Simulation, and Analysis

Leveraging BOM Tools In PLM, PDM, Or In
This Case IHS BOM Manager Helps Move
From MPN To Affected BOM

With BOM Identified, End Unit Exposure
Can Be Correlated

IHS BOM Manager monitors components in your bill of material for availability, regulatory compliance, obsolescence and
counterfeit risks and cost reduction for a strategic, program-wide approach to component supply and logistics management .


Disasters: What About the Unpredictable?
Japan produces over 50% of silicon wafers globally

Semiconductor Fabs
Silicon Wafer Production 3 1 Aizu Wakamatsu, Fukushima
A Shin-Etsu Kamisu, Ibaraki
 ON Semiconductor (Logic)
 Fujitsu (Analog, Discrete, Memory)
B Shin-Etsu Nishigo, Fukushima  Texas Instruments (Analog, Optical)
2 Atsugi, Kanagawa
C MEMC Utsunomiya, Tochigi
6  Mitsumi (Analog, Logic)
D SUMCO Yonezawa, Yamagata 3 Goshogawara, Aomori
 Renesas (Logic)
13 10 9
4 Gunma
11
Display Manufacturing D  ON Semiconductor (Discrete, Logic)
 Hitachi Displays 1 Epicenter  Renesas (Analog, Discrete)
 Panasonic LCD B 5 Hitachinaka, Ibaraki
 Tohoku Pioneer  Renesas (Logic, Micro, Memory)
6 Iwate
4
14 Fukushima  Fujitsu (Micro, Memory)
Resins, Films, Chemicals, 12 C  Toshiba (Discrete)
Copper Clad Laminate… 5
8 A 7 Kof u, Yamanashi
7  Renesas (Analog, Logic, Micro)
2 Tokyo 8 Miho, Ibaraki
 Texas Instruments (Analog, Optical)
9 Miyagi
 Fujitsu (Logic, Micro)
 Rohm (Discrete, Micro)
10 Sendai, Miyagi
 Freescale (Logic)
11 Shiroishi, Miyagi
Source: IHS iSuppli 2011  Sony Semiconductor (Logic)
12 Tsukuba, Ibaraki
 Rohm (Discrete)
13 Tsuruoka, Yamagata
 Renesas (Logic)
14 Utsunomiya, Tochigi
 Matushita (Discrete)


BOM Alert/Notification Tools Offer Warning
Shown: Damaged tooling in the earthquake leads to obsolescence


IHS PCNalert Daily updates of PCNs, End of Life Notices , Supply Chain and Regulatory Events, as well as Counterfeit
Alerts for AVL parts to effectively monitor and quickly analyze potential sourcing and compliance risks


Applying Product and Supply Chain Events
Tools can aggregate all events that may impact your BOM/Program

Counterfeit

Design / Lifecycle Supply Chain Regulatory Counterfeit Part or
Event Failures Compliance Event Supplier Event


Immediate Counterfeit Notification
Part, BOM, Program alert to potential counterfeit risk in the market

Alert!

IHS-ERAI solution includes value-added services, critical information, and risk assessment tools about thousands of
parts and suppliers in order to profile potential counterfeit, substandard, and high risk parts.


These go to Industry & Government Reports
IHS exclusively provides single access to ERAI and GIDEP reports

AUTHORIZATION
REQUIRED
AUTHORIZATION
REQUIRED

ERAI notices GIDEP notices

Who is ERAI? Exclusive Partner of IHS
Leader in Counterfeit Part & Supplier Market Intelligence

ERAI Offers Thousands of Supplier & Part Incidents
An averages 25+ counterfeit incidents reported each week

Reported Parts

Reported Suppliers

Detailed ERAI Counterfeit Incident Detail
Part, Date Code, Lot Code, Photos, Documents, etc.


Disqualify or Be Alerted to Bad Suppliers
Past due invoices, wire fraud, faulty product for example…


Used to Locate Potential Vetted Suppliers
Independent Distributors and Brokers in good standing

Assess Capabilities and Test Accordingly
Industry Membership and Reporting?
Quality System and Processes?
Warranty and Insurance?
Supplier Qualification and Purchasing Process?
Non-Conforming Material Control?
Inspection and Test?
Efforts made to verify a Parts’ Authenticity before use?


Who are trusted supply chain sources?
What are all of the parts that meet our design criteria?

OCM & Aftermarket Sources

AVL/AML Approved Suppliers

Authorized & Franchised Distributors

Approved Independents & Vetted Open Market Sources

So, what alternate sources exist?
What are all of the parts that meet our design criteria?

Functionally Equivalent?
Equivalent Parts?
Upgrades? Downgrades?
Technical Specifications?
Compliance Information?

Locate Cataloged Items in 3rd-Party Reference Sources

What about Procurability and Qualification?
Government catalogued parts and sourcing data for millions of items

IHS Haystack Gold: Haystack Gold logistics management system contains parts and sourcing data for millions of items in the
U.S. Federal Supply Catalog and over 70 U.S. Army, Navy, Air Force and related databases. Augment existing component and
supplier data in internal PDM and ERP systems with XML and standard transport protocols


Determine Procure-ability – Look for Problem Items

Applying Procurement Intelligence
Zeroing in on supply chain risk to BOM and Platforms

Weapon System Platform Metrics
Total Platform NIINs 148,865
Matching Haystack Part Numbers 667,884
NIINs with Inventory 10,500
Parts found in QPD for all NIINs 490,134
NFTD Part Numbers for all NIINs 12,477
Part Number with 5/9 Status 159,838
NIINs with Status Other than Active 10,304
NIINs still in HSG 9464
Replacement NIINs in SegK 771
Inactive NIINs in NFTD 98
Total NIINs with No Data 69

Locate Cataloged Items in 3rd-Party Reference Sources

Government Qualified Products Database (QPD)
Parts and Vendors qualified to military specifications


Find Qualified Sources of Supply

Vendor Qualification
Part Numbers, Stock Numbers ,and Vendors Meeting Criteria


Find Government Qualified Parts, based on Military or Industry
Specifications

Qualification Requirements Analysis

IHS Military Specs & Standards: Collection of over 107,000 documents from U.S. Department of Defense (DoD) and related
government/federal agencies. DoD standards state requirements in performance terms in order to make maximum use of non-
Government standards and commercial technologies, products, and practices.


View Governing Specifications

Qualification Requirement: MIL-PRF


View Related Documents to the Governing Specification

Single Access to Related Standards
Cross-references to related documents


Additional Qualification Requirements:
Program Implementation of AS5553


Agility thru Tools and Decision-Support
Quickly and efficiently mitigate counterfeits and part/supplier risk

Supply Chain
and Lifecycle

Design Procurement


“In skating over thin ice
our safety is our speed”
Ralph Waldo Emerson


Thank You
Mr. Rory King, Design & Supply Chain, IHS Inc.
Rory.King@ihs.com

Mr. Greg Jaknunas, Design & Supply Chain, IHS Inc.
Greg.Jaknunas@ihs.com


DMSMS Standardization 2011 - Integrated Methods of Counterfeit Risk Mitigation

Recommandé

Recommandé

Contenu connexe

En vedette

En vedette (20)

Similaire à DMSMS Standardization 2011 - Integrated Methods of Counterfeit Risk Mitigation

Similaire à DMSMS Standardization 2011 - Integrated Methods of Counterfeit Risk Mitigation (20)

Dernier

Dernier (20)

DMSMS Standardization 2011 - Integrated Methods of Counterfeit Risk Mitigation