first line of defense against counterfeits - hammond

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American Electronic Resource, Inc. First Line of Defense Against Counterfeits Robert Hammond, President and CEO Corporate Headquarters 3505 Cadillac Avenue, Building A Costa Mesa, California 92626 USA [email protected] www.aeri.com © 2009 AER, Inc. Discover the Difference

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Presented at October 1, 2009 Counterfeit Workshop

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Page 1: First Line of Defense against Counterfeits - Hammond

American Electronic Resource, Inc.First Line of Defense Against Counterfeits

Robert Hammond, President and CEO

Corporate Headquarters3505 Cadillac Avenue, Building ACosta Mesa, California 92626 USA

[email protected]

© 2009 AER, Inc.

Discover the Difference

Page 2: First Line of Defense against Counterfeits - Hammond

Discover the Difference

Using an Independent Distributor as a Defense Against Counterfeits

Page 3: First Line of Defense against Counterfeits - Hammond

Discover the Difference

Part Search Engines/Supplier Knowledge

In this example, the suppliers with the desirable quantities are known to sell poor quality components. Note: This is a military part number and there are many Asian distributors that display large quantities available.

Page 4: First Line of Defense against Counterfeits - Hammond

Perform a thorough background check on all new suppliers. Most broker organizations are very small and do not have established quality control procedures in place. We have more than 10,000 brokers in our database. Of those only 200 have more than 10 employees and quality control procedures for their staff. That leaves us 9,800 to fall victim to. Many brokers are working out of their home. All someone needs is a phone, fax and e-mail address and they are in business.

1) Verification of address to be a legitimate place of business.

2) Investigation of industry related memberships to establish how long they have been in business. If a broker has been in the industry for a substantial length of time then they should be a member of one or more industry group. The ERAI is the most common membership for an established distributor. Part search engine memberships also assist us to determine a suppliers length of time in the industry.

3) Check at least 3 references. This includes a question about the length of their business relationship, how many transactions have been completed and the dollar amounts of the transactions. If the supplier offers a reference with minimal transaction history, that is a bad sign.

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Broker Purchasing Steps

Page 5: First Line of Defense against Counterfeits - Hammond

Eliminate all non-franchised distributors in China from AVL. The Chinese government controls the franchise channel leaving the open market with all of the low quality and used parts. Before our “No China” policy in 2005, 50% of our purchase orders from the region were counterfeits.

Request verbally and in writing that suppliers do not supply parts from China. It is important to do both to show our seriousness about the “No China” request. There are many brokers that will lie to make a buck. We caught one lying when we received a box from a US broker with parts wrapped in a Chinese newspaper.

Track and eliminate suppliers who provide counterfeit components. Our largest accomplishment in the fight against counterfeits has been our practice of removing vendors from our AVL that have sent counterfeits to us more than once. Many of our competitors do not like to close doors for fear of losing sales, but we know that these losses will be regained with increased confidence from our customers.

Check known part history with each new customer requirement for it’s counterfeit status on ERAI and GIDEP.

Discover the Difference

Broker Purchasing Steps

Page 6: First Line of Defense against Counterfeits - Hammond

Discover the Difference

Broker Purchasing Steps

Track all supplier history and use a rating system which encourages purchasing fromthe best suppliers.

Page 7: First Line of Defense against Counterfeits - Hammond

Quality control technicians must be thoroughly trained in counterfeit detection. There are

numerous conferences, publications and now, the ability to be trained and certified to

the IDEA-STD-1010-A standard through the IDEA-ICE-3000 exam process.

Use of microscopy during the QC process. The

counterfeiters are hoping we are not trained and

do not use a microscope. Their work looks

great to the naked eye, but once they alter the

part a microscope has no trouble pointing

it out. A well trained quality control technician can

catch 98% of all re-marked parts. It is not that

hard with a little training and experience.

Forged relationships with test facilities for

procedures from a simple de-capsulation to 100%

functionality testing.

Discover the Difference

Quality Control

Page 8: First Line of Defense against Counterfeits - Hammond

Discover the Difference

Simple Tools for Detecting Counterfeits

1. Minimum 30X Microscope with built in camera2. MIL-STD-883 Method 2015 acceptable solution for

part markings to withstand of consisting of 3 parts mineral spirits and one part alcohol

3. Acetone and cotton swabs4. Razor blade for scraping surfaces5. Bar code reader with simple software6. Micrometer7. Access to datasheets8. De-capsulation device

Page 9: First Line of Defense against Counterfeits - Hammond

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Packaging Inspection

1. Verification that the date code, lot code and country of origin on the parts match the information on the manufacturer’s label

2. Date codes that are impossible. Example 0657 or 0951

3. Misspellings on the manufacturer’s labels

4. Omissions of important information such as a lot code

5. Packaging meets the manufacturer’s specs for the parts. Some examples are; a. Absence of desiccant or the humidity indicator card for moisture

sensitive components b. Parts on a reel of 2500 pieces that are specified to be on a reel of 2000

7. RoHS compliance marked on label, but the parts themselves are not marked with the correct RoHS designation

8. Manufacturers logos are correct and the proper style for the date of manufacture

Page 10: First Line of Defense against Counterfeits - Hammond

Discover the Difference

Packaging Inspection

9. Verification that the bar code on the label matches the part description. Often the counterfeiters do not know how to make a bar code so they copy one from another source which does not match.

Page 11: First Line of Defense against Counterfeits - Hammond

Discover the Difference

1. Separation of all production lots

2. 100% visual inspection of the product in it’s packaging (tubes, trays, reels) in order to locate non conformities.

3. Inspection of a sample group removed from it’s packaging using the derivation method Military Standard 414 (AQL 1%, Inspection Level IV). Samples are examined using microscopy. A marking permanency test (MIL STD-883 Method 2015), acetone test and scrape test are performed.

4. Documented inspection records kept.

5. Digital image storage of at least 1 part per lot

Part Inspection

Page 12: First Line of Defense against Counterfeits - Hammond

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Foreign Material in Mold Cavities

Examining the indents is our number one way of detecting counterfeit components. The counterfeiters have a very difficult time keeping the indents clean and consistent during their refinishing process. When sanding off the part number the depth changes. Blacktopping the parts often fills the cavities.

Page 13: First Line of Defense against Counterfeits - Hammond

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Comparing Mold Cavities

All of these parts have the same lot code on the tops. Compare the shapes and characters in the indents. Parts with the same lot code should all be identical.

Page 14: First Line of Defense against Counterfeits - Hammond

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Countries of Origin

Most parts, which are large enough to write a country of origin, display where it was manufactured somewhere on the part. It is commonly placed in the indents, but it can be written anywhere on the part. We have questioned the component manufacturers and all of them we have spoken to say that a part with the same lot code as another cannot be manufactured in different countries.

Page 15: First Line of Defense against Counterfeits - Hammond

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Texture

Plastic Electronic Components are typically made with a mix of fine glass and plastic. The surface of the molded package is textured when it is removed from the mold. The counterfeiters have come up with a very good mixture to create a similar surface on top of the original surface. With the naked eye it is almost impossible to determine the difference between the original surface and a fake surface. By taking a close look through the microscope there are many signs that can help you determine the authenticity of a component.

Natural with gritty texture Resurfaced with bubbly texture

Page 16: First Line of Defense against Counterfeits - Hammond

Often if you look at the edge of the parts you can see the change in texture from the blacktopping. The top of the part, where it has been blacktopped, is shiny and the side of the part has a duller finish.

Discover the Difference

Texture Examples

Page 17: First Line of Defense against Counterfeits - Hammond

Parts coming straight out of a mold will not have any marks that create a directional pattern. These types of marks are made when the counterfeiters are sanding off the top or bottom markings to prepare the part for remarking.

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Texture Examples

Page 18: First Line of Defense against Counterfeits - Hammond

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Imperfections

All of the manufacturers, which we have spoken to, state that they have high quality standards which preclude them from major imperfections. The part numbers are to be in a certain location on the part and they are not to be crooked, misspelled, or out of alignment. The logos are also monitored very closely and should not vary from part to part.

Left corner should be “B”

Page 19: First Line of Defense against Counterfeits - Hammond

The natural plastic and glass mixture does not come off of the surface with acetone. This part looked perfect to the naked eye. Once under a microscope we could see that the texture did not look like the natural plastic and glass mixture. To test our findings we took a cotton swab dipped in acetone and rubbed the surface for a few seconds. It was clear that there was some sort of foreign substance on the surface. The cotton swab should be completely clean.

Discover the DifferenceDiscover the Difference

Blacktopping

Page 20: First Line of Defense against Counterfeits - Hammond

The counterfeiters are getting more sophisticated every day. Due to an increase in returns they have now come up with blacktopping materials that withstand acetone. When we see a suspicious surface under the microscope, and acetone will not remove it, we take a simple razor blade and scrape both sides of the part. If the parts surface flakes off, like the part on the left, we know that it is blacktopped. A sure test is to scrape the bottom of the part to see if it behaves the same way as the top when scraped. The same part’s underside plastic (to the right) just received scratches. There was no flaking like the top which was blacktopped.

Top Bottom

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Blacktopping

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Page 21: First Line of Defense against Counterfeits - Hammond

Ceramic packages are not exempt from blacktopping. This part looked great to the naked eye. Our QC team noticed the texture discrepancy under the magnification of a microscope. The surface could not be removed with acetone so we scraped the surface with a razor blade. Scary fact: These were purchased from an aviation broker.

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Blacktopping/Ceramic Package

Page 22: First Line of Defense against Counterfeits - Hammond

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Once a counterfeit is detected a number of steps should be taken;

1. Suspension of purchases from the supplier, pending a supplier

quality investigation.

2. The counterfeit parts must be moved to a quarantine shelf for disposition. When legally possible parts should be destructed or made unusable. Keep five pieces as a sample for supplier evaluation.

3. The part number is marked in our data system as highly counterfeited to heighten the purchasing and inspection process for future orders.

4. Report the part to the Electronic Resellers Association and GIDEP as a precaution for other users of the same product.

Counterfeits Found

Page 23: First Line of Defense against Counterfeits - Hammond

De-capsulation is a very valuable tool for parts you are having difficulty determining if they are counterfeit. After performing all of the simple non destructive tests the part may be opened and the die can be verified. This does not guarantee all of the parts in the lot are the same, but it is a useful tool and is much cheaper than testing ($200).

Discover the DifferenceDiscover the Difference

De-capsulation

Page 24: First Line of Defense against Counterfeits - Hammond

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Separation of all production lots.

100% visual inspection of the product in it’s packaging (tubes, trays, reels) in order to locate non conformities.

Inspection of a sample group, minimum 25 pieces, or sample quantity derivation method Military Standard 414 (AQL 1%, Inspection Level IV) for lot quantities over 25. Samples are examined using microscopy, a marking permanency test (MIL STD-883 Method 2015), acetone test and scrape test are performed.

Digital images of 3 samples from each lot.

X-ray examination of up to 30 units looking for part-to-part consistency (die, lead frame, wire bonding)

De-capsulation of up to 3 pieces

Die images and component engineer’s comment on test results (consistent with datasheet, anomalous, or highly suspect)

Documented inspection records provided with each order.

Authentipro

Authentipro is a program designed for our customers who require 100% assurance that the product is authentic. The program highlights include;

Page 25: First Line of Defense against Counterfeits - Hammond

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Electrical Testing

It is very important that your company has a working relationship with a test house, however, you should not use a test house as your only counterfeit detection procedure.

Testing is not a 100% guarantee against counterfeits. A typical counterfeit is made from a used or old part that is basically the same. The only change might be the finish, date code, temperature range or manufacturer. The parts might test good with general testing, but once on the board they can fail. Different manufacturers and date codes have slightly different parameters which are not picked up during a general test.

Not all parts can be tested. Often times the testing can cost immeasurably more than the parts themselves. We have received quotes from test houses for $11,000 to test $500 worth of parts. Other times test houses have explained to us that they would have to hire additional staff and labor for months to develop a proper program for full functional testing.

Testing takes time. Buyers looking for hard to find parts often are already running on a late schedule with no time to spare. The additional week or more can cause line down situations.

Page 26: First Line of Defense against Counterfeits - Hammond

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Electrical Testing

There have been reports of test houses not actually performing the tests stated in their documentation. Many test houses are very busy and cannot keep up with the workload due to the rise in counterfeit components. Greed has reached into their organizations as well as the counterfeiters.

Test houses are reporting that brokers are ignoring their suggestions for deeper testing. Deceitful brokers are pushing for a pass test result by requesting the most simple test possible.

The manufacturer and test facility should communicate directly with each other to assure that the testing is being performed to the level of testing requested. The facilitator of testing has a large array of testing options and most broker organizations do not have engineering departments to determine what tests are necessary. Full datasheet testing is always recommended, but may not always be an option, dependent on price and availability of hardware and software.

Page 27: First Line of Defense against Counterfeits - Hammond

Locate top notch independent distributors

Audit your current suppliers facility and counterfeit avoidance strategy

Increase your counterfeit detection capabilities

Test all high reliability parts from non-franchise distribution

Discover the DifferenceDiscover the Difference

Conclusion

Page 28: First Line of Defense against Counterfeits - Hammond

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Qualifications

15 years in business

AS9120 Certified

ISO 9001:2000 Certified

ESD/ANSI S20-20.1999 Certified

IDEA Founding Member

ERAI 10 Year Member