erai executive conference executive brief - “the big picture” of compliance, counterfeits, and...

The Big Picture

End-to-End Supply Chain and Design Capabilities toMitigate Risk and Enable Performance

Rory King, Director Design & Supply Chain, IHSGlenn Bassett, VP Strategy, Design & Supply Chain, IHSMark Snider, President and Co-Founder, ERAI Inc.

April 29, 2011

• Founded in 1959, IHS is a leading source of information and expert analysis inpivotal areas shaping today’s global businesses

• Employs 4,400 colleagues in 30 countries who speak 50 different languages

• IHS customers include nearly 70% of the US Fortune1000 and 80% of theGlobal Fortune 500

• Tens of thousands of customers and hundreds of thousands of end-users in over 100 countries

• Public (2005) NYSE: IHS

• FY10 revenue $ 1,075 million

IHS Inc.A Leading Information Provider

2

Just a few of our clientsThousands of users globally

Avid

Copyright © 2011 IHS Inc. All Rights Reserved. 4

“The presence of counterfeitelectronic parts in the DefenseDepartment’s supply chain is agrowing problem that governmentand industry share a commoninterest in solving.”

Carl Levin, D-Michigan, andSen. John McCain, R-Arizona

March 2011

Current Pressures: Counterfeiting a PriorityEarly in 2011 top senators launched the investigation


Current Pressures: Japan CrisisJapan produces roughly 60% of silicon wafers globally

Semiconductor Fabs

1 Aizu Wakamatsu, Fukushima ON Semiconductor (Logic) Fujitsu (Analog, Discrete, Memory) Texas Instruments (Analog, Optical)

2 Atsugi, Kanagawa Mitsumi (Analog, Logic)

3 Goshogawara, Aomori Renesas (Logic)

4 Gunma ON Semiconductor (Discrete, Logic) Renesas (Analog, Discrete)

5 Hitachinaka, Ibaraki Renesas (Logic, Micro, Memory)

6 Iwate Fujitsu (Micro, Memory) Toshiba (Discrete)

7 Kofu, Yamanashi Renesas (Analog, Logic, Micro)

8 Miho, Ibaraki Texas Instruments (Analog, Optical)

9 Miyagi Fujitsu (Logic, Micro) Rohm (Discrete, Micro)

10 Sendai, Miyagi Freescale (Logic)

11 Shiroishi, Miyagi Sony Semiconductor (Logic)

12 Tsukuba, Ibaraki Rohm (Discrete)

13 Tsuruoka, Yamagata Renesas (Logic)

14 Utsunomiya, Tochigi Matushita (Discrete)

Silicon Wafer Production

A

B

C

D

Shin-Etsu Kamisu, Ibaraki

Shin-Etsu Nishigo, Fukushima

MEMC Utsunomiya, Tochigi

SUMCO Yonezawa, Yamagata

Display Manufacturing Hitachi Displays Panasonic LCD Tohoku Pioneer

Resins, Films, Chemicals,Copper Clad Laminate…

Fukushima

Epicenter

A

B

D

C

1

3

2

4

Tokyo7

6

85

910

11

12

14

13

Source – IHS iSuppli


EU RoHS Recast

EU REACH & SVHCSIN List - Substitute It Now!

US California Proposition 65

EU Battery DirectiveENERGY STAR

ISO 14064 GHG Standards Norway PoHS

Carbon Disclosure Project (CDP)

Electronic Product EnvironmentalAssessment Tool (EPEAT)

Japan Green

Priority Declarable Substances List

(ASD PDSL)

Environmentally Preferred Products (EPP)

Regional Greenhouse Gas Initiative (RGGI)

PCF - Product Carbon Footprint

UN Stockholm PersistentOrganic Pollutants (POPS)

US FDA

China RoHS

Thailand’s “RoHS”

US EPA Executive Orders

Toxic Substances Control Act (TSCA)Health Canada / Canada’s Chemical

Management Plan

Customer RFP

Full Material Disclosure

Product Content Disclosure

Lifecycle Assessment (LCA)Water

Hazardous

Substances

Energy

Waste

DEHP-Free

Bisphenol-A “BPA Free”

Volatile Organic Compounds

Air Safety

Health

Security

Natural Resources

Argentina RoHS

EU RoHS and WEEE

Directives

Greenpeace

EU Medical Device Directive

EU RoHS and WEEE

Directives

Current Pressures: Environmental ComplianceRegardless of exemptions these have a ripple effect on materials used

Conflict Minerals


Example: Impact of Environmental Complianceon Through-Life Obsolescence Management

Business Pressures InfluencingProducts

Drivers of innovation and lifecycle decisions.

Product Lifecycle Stages

Products

Parts/Materials

The Supply Chain ProblemOptimizing supply to meet demand.

Introduction

Growth

MaturityDecline

Phase-Out

Obsolete


Market Shiftto EU RoHS

Example: RoHS’ Unplanned Lifecycle Impact2M+ new parts. Major part changes. Cause of over 20% EOL in ‘06-07.

2003 2004 2005 2006 2007 2008 2009

End of Life (EOL)Specific to RoHS/Pb-free Environmental Compliance

2003 2004 2005 2006 2007 2008 2009

New Product Introductions (NPI )Specific to RoHS/Pb-free Environmental Compliance

2003 2004 2005 2006 2007 2008 2009

Product Change Notices (PCN)Specific to RoHS/Pb-free Environmental Compliance

NPI

EOL

PCN

RoHS in Force July 1, 2006


2004 2005 2006 2007 2008 2009

Gross EOL by YEAR ENDING 2004 - 2009

2004 2005 2006 2007 2008 2009

Gross EOL by YEAR ENDING 2004 - 2009Gross EOL by MONTH 2008

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0

206

619

Gross EOL by MONTH 2008

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0

206

619EU REACH SVHCPublishedLehman files

Chapter 11

EOL by MFR due solely todemand/sales forecast.

Economic Recession and Chemical Restrictions:The two most dominant factors in the 300% increase of End of Life (EOL) for electrical components exiting 2008.

4

Economic Recession Imposed MajorLifecycle Disruptions

Source: IHS Component Insight, 2010


Recession triggered large inventory reductions –primary reduction in non-compliant parts employedby medical device companies

Shortages of key electronics components…became pronounced in the first quarter FY10,and continued in the second.

General Electric Co. said supply constraints forelectronic components used in its healthcareequipment cost the company $50 million insales for the quarter.

Effect: Material Shortages andIncreased Lead Time (among other things…)

August 5, 2010


Implication: Rising Lead Time = Keyindicator for Increased CounterfeitActivity

What do counterfeits do

Increase warranty/maint. costs 65%

Reduce expected product life 64%

Inhibit sales / customer satisfaction 62%

Add to individual unit costs 51%

Increase development time/costs 38%

What do counterfeits cause?

Product quality/reliability failures 84%

Customer returns/recalls 67%

Production line stoppages 57%

Product launch delays 36%

What do counterfeits impact?

Damage brand / reputation 71%

Product safety / legal liability 55%

Expose contractual liability 42%

Compromise security 37%

Undermine compliance claims 44%

Incidents Continue to Rise

“Jeopardize our missionsand soldiers safety.”

"They ground aircraft and impact airplane safety.”

Source: “Benchmarking Counterfeit & Inferior Grade Components”,Supply & Demand Chain Executive, 2009


Correlation: Counterfeits and EOLObsolescence and allocation pose significant risk

Source: IHS Inc. 2011


Tin Whisker Images Courtesy of the NASA

COMPLIANCE (explicit)Fines, Penalties, Recalls, Data, IT, Supplier Evaluation….

SUPPLY CHAIN & DESIGN COSTObsolescence, Supplier Viability, Material Shortages, Continuity

SUPPLIER/MATERIAL COSTSPrice Variance, Manufacturing Processes, Inventory/LTB…

SAFETY & SECURITY COSTSReliability, Tin Whiskers, Counterfeits…

JapaneseElectronics OEM

Recall

Regulatory event = $160M+ governmentseizure of 1M+ product units due to highcadmium concentration levels found insystem cables suspected to violate EU law.

US ConsumerProducts OEM

Recall

Design reliability = $1B+ recall logistics,warranty extensions, excessiverework/repair, while customer loyalty dippedto resolve reliability issues causing hardwarefailure.

Counterfeits and Inferior Grade Components

Source: UK MOD

Conclusion: RoHS Was Very “Costly”Compliance is really not the issue – Obsolescence risks are…


EU RoHS Recast

EU REACH & SVHCSIN List - Substitute It Now!

US California Proposition 65

EU Battery Directive

ENERGY STAR

ISO 14064 GHG Standards Norway PoHS

Carbon Disclosure Project (CDP)

Electronic Product EnvironmentalAssessment Tool (EPEAT)

Japan Green

Priority Declarable Substances List

(ASD PDSL)

Environmentally Preferred Products (EPP)

Regional Greenhouse Gas Initiative (RGGI)

PCF - Product Carbon Footprint

UN Stockholm PersistentOrganic Pollutants (POPS)

US FDA

China RoHS

Thailand’s “RoHS”

US EPA Executive Orders

Toxic Substances Control Act (TSCA)Health Canada / Canada’s Chemical

Management Plan

Customer RFP

Full Material Disclosure

Product Content Disclosure

Lifecycle Assessment (LCA)Water

Hazardous

Substances

Energy

Waste

DEHP-Free

Bisphenol-A “BPA Free”

Volatile Organic Compounds

Air Safety

Health

Security

Natural Resources

Argentina RoHS

Greenpeace

EU Medical Device Directive

EU RoHS and WEEE Directives

And… RoHS Was Just the Beginning…The discontinuous sustainability and compliance shift

Conflict Minerals


Now… EU REACH is a Huge DealEuropean Commission roadmap includes 106 priority SVHC by 2012

15

Source: “EU and industry REACH different conclusions”, Jane’s, September 2009

“Airbus UK’s director of operations andcompliance, said the cost of REACH had

been evaluated at several million Euro overthree years, with provisions up to hundreds

of millions of Euro over five years”…

“…[He] said there is a level of ambiguitybecause it will depend ‘on the substancesthat will finally be added to the candidatelist and in Annex XIV’. Airbus UK has set its

2009 REACH budget at some EUR12 million.”


“Substances”are individual

chemicals

Semiconductors

Communications

Energy & Utilities

Electronic Devices

Aerospace & Defense

Consumer Goods

Chemical & ProcessManufacturedImported Used

“Preparations”are mixturesor solutions

“Articles”any objectproduced

EU REACH “Chemicals” Sectors Impacted

Medical & Healthcare

Why “Hundreds of Millions” in Risk?Material restrictions change the entire supply and demand picture


Deca-BDE?

Phthalates?

Cadmium?

DEHP?

Lead?

This is NOT exclusive to Any IndustryA typical hospital setting…


Entering 2010, the top 3 regulatory drivers

influencing program / resource allocations?

Source: Benchmarking Medical Supply Chains, Supply& Demand Chain Executive, March 2010 (prelim.

Results)

0% 5% 10% 15% 20%

US FDA (e.g. CFR 21)

EU REACH & SVHC

EU RoHS/WEEE

EU Medical Device…

EU RoHS Recast / v2

China RoHS

Health Canada /…

RoHS - Other…

Toxic Substances…

Proposition 65…

87.5%

79.1%

77.0%

72.9%

68.7%

0% 20% 40% 60% 80% 100%

Technical Fit (e.g.Form, Fit, Function)

Material Disclosure &Composition

Compliance Status

Reliability

Lifecycle Analysis &Supply Continuity

4.5%

4.5%

8.0%

30.7%

20.5%

31.8%

0% 10% 20% 30% 40%

Less than 1 Month

1 - 3 Months

3 - 6 Months

6 - 12 Months

12 - 18 Months

More than 18 months

Figure 2: Redesign or certifying your

primary product/line would take?

Source: Survey of 17 of 18 Fortune 1000 TopMedical Products & Equipment companies and

50+ other manufacturers, “Redesigning MedicalSupply Chains”, Supply & Demand Chain

Executive, Thursday, October 15, 2009

Figure 3: To evaluate new or existing

parts for material compliance, which

factors play a role in part selection?

Source: Live Audience Poll Supply & DemandChain Executive Webcast "Redesigning Medical

Supply Chains" Supply & Demand ChainExecutive, Thursday, October 15, 2009

Top 2010 environmental compliance

drivers include the FDA and EU

REACH, RoHS + Recast and MDD.

50% + of all redesign and

certification of medical products

would take more than a year.

Compliance requires comprehensive

material composition, supply chain,

technical design and lifecycle data.

Medical Products Are Exposed to RiskComplex Regulations Long Cycles Major Design & SC Analysis Required


The Entire Medical Peer Group is WatchingWe held a Webcast called “Redesigning Medical Supply Chains”

… and only 1 did not join our webcast…

Over $80B in spend among the Fortune 1000…


20

What Steps Can be Taken to Mitigate Risk?Buyer and Supplier must collaborate on regulations, standards, and implementation thereof

Airworthy?

Regulations Standards Parts


2003 2004 2005 2006 2007 2008 2009

End of Life (EOL)Specific to RoHS/Pb-free Environmental Compliance

Monitor Lifecycles PCN/EOL to Detect Issues Price/Lead Time Counterfeit Incidents

Early Warning System to Avoid RiskRobust supply chain traceability and alerting methods to mitigate risk

Qualify+ ApproveQualify

+ ApproveManage+ AvoidManage+ Avoid

Validate+ DetectValidate+ Detect

Report+ ResolveReport

+ ResolveRedesign+ ResupplyRedesign+ Resupply

Establish infrastructure tomitigate risk through qualifiedand approved designs,suppliers, & parts.

Update processes, tools, andinformation to avoidcounterfeit and high riskparts.

Validate, sample and testcomponents for authenticity.Quarantine suspectedcounterfeits.

Procedures to notifystakeholders, reportoccurrences, and resolveincidents.

Maintain controlleddesign/redesign cycles ofproducts. Optimize parts,inventory, and suppliers.

Challenge

…mission failure!

Economic downturn…Environmental Compliance

…shortage… …fake parts…

Establish the Information, Tools, and Processes to Mitigate Risk

Introduction

Growth

MaturityDecline

Phase-Out

Obsolete


3 Essential Steps We’ll Discuss

Establish the Tools, Processes, and People…

• Standards and Regulations Management

• Technology Value Chain Insight

• BOM and Parts Management

• Counterfeit Intelligence

Identify and Mitigate Supply Chain Risks

Avoid, Detect, and Resolve Counterfeits


1. ESTABLISH THE TOOLS,PROCESSES, AND PEOPLE…

Best Practice Workflow

Rory KingDirector, Design & Supply ChainIHS Inc


Standards – A Lead Role in Risk MitigationSAE AS5553 within IHS Standards Expert

24


Did You Know-Standards Refer to Standards?SAE AS5553 Standard: Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition

25

JEDEC

MIL-STD

EIA

ANSI

ISO QMS

IEC

Did you know, AS5553 refers to:-20+ primary references-300+ secondary references

… a lot of critical information…


IHS clients get standards in one placeStandards collections, revisions, alerts to updates…

26


Same with Technology Market IntelligenceIHS iSuppli iLibrary for clients


Market, Commodity, and Manufacturing InsightIHS iSuppli provides technology value chain market intelligence

Source: IHS iSuppli 2011 – Do Not Use or Reproduce


Component Supply HealthClients gain a view into health of critical components

Source: IHS iSuppli April 2011 Component Health Watch (CHW)


2. IDENTIFY AND MITIGATESUPPLY CHAIN RISKS

BEST PRACTICE WORKFLOW

Glenn BassettVP Strategic Business DevelopmentIHS Design & Supply Chain


Risk Identification

• Some examples…

• Predicted Obsolescence• i.e. Proactive Avoiding of Design Risk

• Component Health Risk• i.e. Rising Costs and Lead Times, Allocation

• Lifecycle Event Risk• i.e. EOL / Lifebuy Notice

• Supply Chain Failure• i.e. Potential Impact of Japan Crisis

• Counterfeit Incident• i.e. Suspected Counterfeit or High Risk Part


Moving From Risk Identification To Mitigation

• From Manufacturer & Commodity To End Units Impacted

• Identifying Components In My Business

• Linking Down To BOMS & End Devices

• Prioritize Key Components/BOMS/Devices

• Identifying Sources Of Inventory

• Leverage Alternate Sourcing Tools

• Identify Mitigation Plan Working With Suppliers

• Develop Counterfeit Mitigation Plan

• Longer Term Impacts


Moving From Manufacturer/Commodity To MPN

• Leverage Reference Database To Identify MPNs At Risk

• Analyze AVL For Linkage In Risk Components


Moving From MPN To BOM

Shown: IHS BOM Manager

• Leveraging BOM Tools In PLM,PDM, Or In This Case IHS BOMManager Helps Move From MPNTo Affected BOM

• With BOM Identified, End UnitExposure Can Be Correlated


Prioritize Key Components, BOM, Devices

In-production with near-termdelivery

Proto-type / Pre-ProductionNPI Production Imminent

• Prioritize End Unit Exposure

• Calculate Time Horizon / Revenue Risk Profile

• Prioritize Through End Unit Back To Component

Calculate Inventory Need & Priority


Where can I get this?

Where Does Current InventoryExist?

• Direct from the Factory

• Approved Vendor / Manufacturer(AVL / AML)

• Franchised and AuthorizedSources

• Approved Independent Distributors

• ERAI Members

• Valid Alternate Parts or Sources

Shown: IHS-ERAI

Shown: IHS BOM Manager


What alternatives exist?

Equivalent Parts?Upgrades? Downgrades?Functionally equivalent options?Are they ROHS Compliant?


Choices

• AVL Or Alternate• Authorized Channel Inventory

• Secondary Market

• Inventory Investment• Bridge Buy

• Making Bets On Near Term Recovery Or Redesign

• Lifetime Buy

• Mitigating Greater Risk Time Horizon


Counterfeit Incident TrackingERAI and GIDEP are 2 sources of validated incident reports


Of reports made, 9% came from GIDEP and 91% from ERAI during the period shown.


The Last 6-Years of Component EOL2009 – Economic Events Drive EOL: What About 2012

Manufacturer-Issued End of Life (EOL)Distribution of EOL by Dominant Business Driver

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008 2009

Unspecified / Administrative

Supply Side

Organizational

Innovation, Technology, and Manufacturing

Environmental Compliance

Demand-Side

Impact of RoHSCompliance

Demand-Side Drivers~90% of EOL in 2009

Technology< 25% of Change


Moving From Risk Identification To Mitigation

• From Manufacturer & Commodity To End Units Impacted

• Identifying Components In My Business

• Linking Down To BOMS & End Devices

• Prioritize Key Components/BOMS/Devices

• Identifying Sources Of Inventory

• Leverage Alternate Sourcing Tools

• Identify Mitigation Plan Working With Suppliers

• Develop Counterfeit Mitigation Plan

• Longer Term Impacts


3. AVOID, DETECT, ANDRESOLVE COUNTERFEITS

Best Practice Workflow

Mark SniderPresident,ERAI Inc.


Our Commitment is Personal


• Founded in 1995, ERAI is an information services organization thatmonitors, investigates and reports issues affecting the global hi-techelectronics supply chain.

• ERAI provides tools to mitigate risks on substandard parts, counterfeitparts, vendors and even customers.

• Subscribers include OEMs, CMs, Distributors, OCMs, governmentagencies and industry associations.

• Founding participant in SAE International G-19 Counterfeit ElectronicComponents Committee and several sub-groups

ERAI Inc.A World of Information at Your Fingertips


• ERAI is not a distributoror parts broker

• ERAI is not a sourcebookor online catalog

• ERAI is not a componentmanufacturer or OEM

• ERAI is not a test labor inspection service

• ERAI is not a qualitystandards organization

Who ERAI is not…

We do notbuy, sell, or test parts!


Exclusive Partner to Only IHSOne provider of counterfeit alerts and supply chain risk mitigation

46


Why? IHS ClientsThousands of users globally

Avid


Source: ERAI Inc, 2004 to YTD Feb 2011

What’s Being Counterfeited?

Source: IHS Component Insight, IHS Inc, 2011* 2011 figures are projected annual estimates based on March YTD 2011 actuals and previous annual proportions.


What’s Being Counterfeited?Part Classes with 1.5% or more of total incidents

49

Rank Minor or Leaf Class Major Class # Incidents % of Total

1 Operational Amplifier ANALOG IC 194 6.0%

2 Programmable ROM MEMORY IC 176 5.5%

3 Microcontroller MICROPROCESSOR IC 157 4.9%

4 Static RAM MEMORY IC 143 4.5%

5 Programmable Logic Device PROG LOGIC IC 140 4.4%

6 FET General Purpose Power TRANSISTOR 131 4.1%

7 Field Programmable Gate Array PROG LOGIC IC 109 3.4%

8 Line Driver or Receiver INTERFACE IC 100 3.1%

9 Analog to Digital Converter ANALOG IC 96 3.0%

10 Switching Regulator or Controller LINEAR REGULATOR 92 2.9%

11 Power Management Circuit LINEAR REGULATOR 80 2.5%

12 Peripheral Driver INTERFACE IC 60 1.9%

13 Digital to Analog Converter ANALOG IC 57 1.8%

14 Ceramic Capacitor CAPACITOR 56 1.7%

15 Microprocessor MICROPROCESSOR IC 54 1.7%

16 Dynamic RAM MEMORY IC 49 1.5%

52.8%

Top Counterfeit Incidents Reported by Part ClassClasses with 1.5% or Greater Proportion of Total Incidents

Source: IHS Inc, 2011* 2011 figures are factored projected based on March YTD 2011 and previous annual proportions.


Industry’s Reported Counterfeit IncidentsERAI and GIDEP are 2 sources of validated incident reports

50



Over 50 counterfeits in the last 14 days!Shown: ERAI Reported Parts


How Risk Enters Your Supply ChainIntended and unintended ports of entry for counterfeits

1. Many unsafe part & supplier “sources”

• Online Broker Search Engines

• Maverick procurement methods or spending limits

• Google

2. These are counterfeit ports of entry

• Rapid access to millions of parts

• Minimal membership requirements

• Quick & easy access to a large audience of buyers

3. Are you creating your own shortages?

• Multiple RFQ’s create false demand signals

• Leads to price increases and incentive for counterfeiting

Request for QuoteRequest for Quote

Request for Quote…………

Request for Quote


53

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

“It is not uncommon, however,for authorized distributors topurchase parts outside of theOCM supply chain in order to

fulfill customer requirements –58 percent purchase parts from

other sources.

Specifically, 47 percent ofauthorized distributors procure

parts from independentdistributors, 29 percent procure

from brokers, and 27 percentprocure from Internet-exclusive

sources.”

Source: U.S. Department of Commerce,Office of Technology Evaluation,

Counterfeit Electronics Survey,November 2009.


Best Practices to Avoid RiskStay Within Your Trusted Supply Chain

1. Direct from the Factory

2. Approved Vendor / Manufacturer (AVL / AML)

3. Franchised and Authorized Sources

4. Approved Independent Distributors

5. ERAI Members

6. Valid Alternate Parts or Sources• Distributors, Aftermarket Sources

• Alternate Parts - Upgrades, Downgrades, Equivalents…

• Manufacturers and Products sanctioned by qualifying authorities• Government QML/QPL

Contractually define your expectations. Test accordingly.Contractually define your expectations. Test accordingly.


“The presence of counterfeitelectronic parts in the DefenseDepartment’s supply chain is agrowing problem that governmentand industry share a commoninterest in solving.”

Carl Levin, D-Michigan, andSen. John McCain, R-Arizona

March 2011

Congress Investigation LaunchedEarly in 2011 senators launched the investigation


Industry’s Recognized ReportsGIDEP and ERAI are the counterfeit reporting entities

Recognized by U.S. SenateRecognized by the G-19

IHS + ERAI WorkflowWhat it looks like to thousands of IHS users

AUTHORIZATIONREQUIRED

AUTHORIZATIONREQUIRED

ERAI notices GIDEP notices

Example: Alert to Infineon BTS716GCustomers alerted to counterfeit incident as reported by ERAI

•Subscribers of IHS 4DOnline BOM Manager, COMET, and Parts Universe have access toalerts from ERAI, GIDEP, and other sources.•Subscribers to the IHS-ERAI solution provides ERAI membership, giving them access toERAI’s comprehensive market intelligence community, tools, and services.

Alert!

Example: Infineon BTS716GAlerts are accessible via the IHS product

Users Seamlessly Navigate to ERAIIHS customers browse directly from IHS into ERAI products

It Provides Complete Reported Parts DetailProvides access to ERAI market intelligence

Vet Real Stock from “Available” PartsIt limits risk exposure from fake sources and price games

Ability to Vet the Open MarketExample ERAI Member Details

Ability to Vet Open Market SourcesQualify your suppliers

ASK YOUR SUPPLIERS…

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?

ASK YOUR SUPPLIERS…

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?

Search and Monitor Supplier RiskA wide range of incidents pose serious business problems

Example: AAOK ElectronicsPast due invoices, wire fraud, faulty product for example…

BOM Risk Analysis & Monitoringvia ERAI BOM Scrubber

BOM Analysis: Risk IdentifiedFile is processed in seconds; can be monitored after


Conclusion – Fight the FakesApril’s digital edition of Supply & Demand Chain Executive magazine


Steps to Securing the Supply ChainWith market intelligence from IHS and ERAI

Establish the Tools, Processes, and People…

• Standards and Regulations Management

• Technology Value Chain Insight

• BOM and Parts Management

• Counterfeit Intelligence

Identify and Mitigate Supply Chain Risks

Avoid, Detect, and Resolve Counterfeits


Thank You

Questions?

Rory King, Director Design & Supply Chain, IHS

[email protected]

Glenn Bassett, VP Strategy, Design & Supply Chain, IHS

[email protected]

Mark Snider, President and Co-Founder, ERAI Inc.

[email protected]

erai executive conference executive brief - “the big picture” of compliance, counterfeits, and...

Business

redesigning

svhc sin list

previous annual

avl aml

conforming

governmentand

environmentally

demand chain