Counterfeit Avoidance Series: ERAI's Perspective on First Signs

BRENTWOOD, N.Y. - Feb. 12, 2014 - PRLog -- Nowadays, the illegal act of component counterfeiting is nothing new in our industry, and it has continuously evolved over the last several years. A decade after the first real signs of counterfeit incidence, we invited ERAI, Inc. Co-Founder/Vice President Kristal Snider, a counterfeit identification and avoidance expert, to share her insightful perspective on this critical
issue. In Part I of our Counterfeit Avoidance Series, she takes us back to the mindset and environment in 2001 when counterfeit material first reared its ugly head. Within just a month of China becoming a member of the World Trade Organization (WTO) in December of 2001, the ERAI received its first counterfeit complaint, in which the surface of a part was altered. “No one was thinking about surface alteration, die repackaging, or backdoor coding back then. Standardization for quality processes and reporting protocols did not exist,” said Kristal Snider. “Electronic component distributors didn’t know at the time that this would become an ongoing, prevailing issue that would force them to re-learn sourcing, customer identification, and the way in which they make
purchases.”In January of 2002, the ERAI -- the industry's leading source of risk assessment information related to counterfeit electronics
and high-risk parts in the global electronics supply chain -- began collecting and publishing counterfeit and nonconforming data. Two years later, the association traveled to China to see first-hand the recycling and refurbishing activities that were fueling the supply of counterfeit parts. “On this trip, the full magnitude of this problem was truly felt by our organization. We then accelerated our efforts to educate and inform distributors, OEMs, CMs, and OCMs on the matter while promoting the need for dialogue,” said Ms. Snider.
In the early 2000s, as product obsolescence increased, independent distributors began to rely more and more on China for product because it was consistently available and some level of legitimate excess inventory existed. However, as
manufacturing in that country grew, the number of counterfeit parts began to spiral upward. Prior to this trend, there was no need for product testing beyond visual inspections, except for soderability. That would soon change.
At this time, the ERAI started to aggressively collect data on what was being reported, and stressed to independent distributors to report findings. At the same time, distributors were navigating tough waters as targets, carefully trying to manage their company reputation. “We learned over time that counterfeit avoidance is not limited to one sector,” said Ms. Snider. “Every single link in the supply chain is accountable.”What we in the industry would later realize is that the trusted relationship between distributor and customer -- which is at the
heart of this business – would be of paramount significance in counterfeit avoidance. In Part II of our series, to be released later this month, Ms. Snider will look back on just how the world of the independent
distributor changed after 2004, in order to maintain the delivery of quality product to its customers.