Counterfeit electronics is a persistent matter that will be not easily go away, says Michael Cacheiro, vice president, supply chain management at Lockheed Martin. Incidents will continue to increase, as “counterfeit electronics used by the military increased by 250 percent between 2005-2008 and quadrupled from 2009-2012,” and 21 percent comes from authorized distributers.
He made his comments ten minutes from my office at the American Aerospace & Defense 2015 summit. During Cacheiro’s presentation on counterfeit electronics, he discussed how a majority of the threats result from people wanting to make a quick buck not thinking or caring that they may endanger the lives of the men and women that protect our country. According to him, entire cities are being set up to make and profit from counterfeit parts. Until we find a way to eliminate this issue, we will continue to see counterfeit electronics trolling around waiting to fail at the most inopportune moment.
Cacheiro made an interesting point: Part of the reason that this has gone all way up the ladder in legislation is because the industry is not properly planning the lifecycle of electronics. Tracking of the part after it is used hasn’t been addressed and it needs to be.
Of course, legislative law has emerged to try to mitigate the use of parts that will hurt the end user. Hearings that started in 2011 explained the dangers of counterfeit electronics in military systems. Written documentation of the hearings can be read here: https://www.gpo.gov/fdsys/pkg/CHRG-112shrg72702/pdf/CHRG-112shrg72702.pdf.
Within this document, highlighted is China’s involvement in the profiting of counterfeit electronics. It states, “Looking at just a slice of the defense contracting universe, committee staff asked a number of large defense contractors and some of their testing companies to identify cases in which they had found suspected counterfeit parts over a two-year period. They reported 1,800 cases covering a total of 1 million individual parts. Of those 1,800 cases, we selected about 100 to track backwards through the supply chain. So where did the trails ultimately lead? The over- whelming majority, more than 70 percent, led to China, and with few exceptions, the rest came from known resale points for parts that came from China.”
The hearings were followed by enacting section 818 in 2012 under the National Defense Authorization Act for Fiscal Year 2012. Now contractors are responsible for all parts that they sell. Everyone must use authorize and trusted distributors, which should slow down and mitigate any counterfeit part entering a system that might endanger someone’s life.
Cacheiro went on to point out that in the last few years, other legislation has come out requiring higher level of quality work. Defense Federal Acquisition Regulation Supplement (DFARS) requires that “contractors have a system that detect and avoid counterfeit electronics.”
Lockheed Martin uses GIDEPs, LMC/ Industry Forums, ERAI, and IDEA to help lessen the issue. Their approach, according to Cacheiro, is to prevent, detect, and mitigate. Their final approach is to control the end of life for the part. After getting a lesson on the laws and history of counterfeit electronics, Cacheiro points out that “careful planning of spares, obsolescence, and design refresh” is important.
It seems that without life cycle planning of the part, that part is now at risk of becoming an issue. It’s not just enough that people follow a guideline or law, but that they are well aware of the entire process: from beginning to end.
Legislation is not static, it is continuing to evolve to meet this threat, says Cacherio.