3 Ways Counterfeit Parts Affect Your Electronic Manufacturing

<pTechnician working on circuit board.


Counterfeit parts are unfortunately not going away. Does it really matter to your assembly?

This is not a fun subject, but when it comes to manufacturing, especially electronic manufacturing, it’s one we have to talk about.

It is a complicated subject, driven by global supply and demand, and therefore, something that you might feel like doesn’t affect you much at all.

If you’re in electronic manufacturing, though, you are affected by it – and definitely not in a good way.

Your company’s quality reputation, your costs, and the potential risks you face are all affected by counterfeit parts, even if you’ve never had a single counterfeit part in your assemblies.

Here are three ways the counterfeit market is impacting your work, sometimes without your knowledge.

Quality and Reputation

Think you have never seen a counterfeit part? Never had one slip into your product? Truth is, counterfeit parts are much more common than most people realize and there’s a good chance you’ve unknowingly come in contact with one.

Whether they are identified as counterfeit or not, these parts run a substantial risk of negatively impacting your customer experience. Counterfeit isn’t exactly an appealing label.

But what if the counterfeit parts aren’t ever discovered until there’s a failure? Though they often fail quality tests, sometimes they don’t.

For a minute, let’s think beyond the risks counterfeit parts impose on public health and safety. If your name is on the product, the fallout for any failure becomes a risk to your company and its reputation.

Whether you knowingly used a counterfeit part or not, if one gets into your assembly and fails, the news media isn’t going to be tracking down that counterfeiter for a comment.

It’s your phone that will be ringing. Your quality that will be in question.

Counterfeit Parts Are Costing You Money

The laws of supply and demand are driving costs for your materials and labor all the time. The same is true even in the counterfeit parts market.

In the late 1980s and 1990s, manufacturing sources and materials for electronic components decreased while consumer demand exploded. This convergence left remaining manufacturers scrambling to keep up with demand and effectively opened the door for “gray market electronics brokers.”

Now, with a constrained market, even counterfeit parts can demand a price much higher than would exist in a balance supply-demand situation.

But since we aren’t in a balanced situation, manufacturers must invest heavily in counterfeit prevention, quality assurance, and risk mitigation. And of course these processes and tests aren’t free, nor are they ignored when your quote is calculated.

Let’s take that a step further and look at direct costs you, and other manufacturers are incurring as a result of counterfeit parts.

Loss of life or personal injuries are obviously the biggest risks. Less catastrophic but still costly is the increased likelihood that you’ll need to cover the costs of recalls or replacements. If a counterfeit part is discovered, manufacturing must stop and be replaced by expensive downtime for research and replacement. Further, depending on your industry, the discovery of a counterfeit part could result in large fines and penalties.

So even if you have been lucky enough to avoid counterfeit parts so far, your costs are still impacted by their presence in the market. What a bunch of bologna, right?

Then Again, Maybe Not

Wait, what?

That’s right, it’s possible you’ve dodged everything we’ve listed above so far. You’ve not had part failures traced back to counterfeit and your company reputation is solid.

Everything is working so probably you don’t have any counterfeit parts in your products, right?

Maddeningly, counterfeit parts do sometimes work. Plus, a bad part isn’t necessarily counterfeit. This makes the whole business of knowing if a bad part, is a counterfeit part, extremely difficult and confusing.

Parts can work during testing and sometimes even for a long time before failing, counterfeit or not.

The point is, just because you’ve not faced catastrophic failure, doesn’t mean your assemblies aren’t impacted by counterfeit parts. The risks and their potential costs to your reputation and bottom line are still out there.

In the face of all these risks and costs, what can you do?

You need to keep creating your products, but the landscape for counterfeit makes it all seem murky and unsettling.

The reason we want to share these with you isn’t to scare you.

It’s to let you know that a trusted ECM partner like Levison Enterprises exist to help you through managing these risks.

We aren’t going to be able to shut down the counterfeit market, but we can put our state-of-the-art testing mechanisms to work for you. We can offer access to our vetted suppliers for authentic parts. We can work together to identify counterfeit before it even as a chance to get in the door.

Whether your assemblies have been directly affected by counterfeit parts or not, we’d love to talk with you about ways we can ensure you never have to deal with them in the future.

Contact Levison Enterprises today to learn more.