Embedding Anti-Counterfeit in Company Culture

Avoid Reinventing the Wheel – Anti-Counterfeiting in the Semiconductor Industry must be embedded in the Company’s CultureGuest Blog by Steven Jeter, Electronics Industry Analyst

Companies often find themselves reinventing the wheel when filling or hiring for positions that have been vacant for an extended period. This is especially true when designating an individual to lead a company’s anti-counterfeiting efforts.

Seldom will you find companies in the semiconductor industry with the same internal positions for fighting counterfeit. Professionals I’ve met holding the key anti-counterfeiting position have been from the IP/Legal Department, Business Continuity, Quality Management, R&D, Corporate Security, Marketing, Logistics, Purchasing, and even Corporate Strategy. Sometimes the responsibility was bestowed on the individual by default because he was the first to encounter a counterfeit, because the person took a special interest in counterfeit activities and became known as the company’s subject matter expert, or the company felt it important to have representation at industry forums. In some cases, the responsibility was an additional duty and not formally written into their position description.

A persistence anti-counterfeiting effort is based on evidence and numbers, e.g., number of cases… number of Internet take downs…continued visible threats of counterfeit to a brand…etc. In addition to IP litigation for patent or trademark infringements, one can also estimate the ROI value for a company’s anti-counterfeiting actions. Unfortunately, these actions are normally just seen as cost activities. As such, a company’s anti-counterfeiting efforts may be tied to one individual’s time, effort, and passion given to the subject. When this happens, a future gap in anti-counterfeiting knowledge and effort is pre-programmed.

Without question, there are companies with a strong anti-counterfeiting culture with global awareness that is not tied to one individual’s effort. These companies have a defined position responsible for anti-counterfeiting, e.g., Brand Protection Officer, they develop best practices, write standards, engage industry forums, drive anti-counterfeiting operations, and most importantly, sustain the knowledge and culture necessary to mitigate the risks and impacts of semiconductor counterfeit to them and their customers.

SiliconExpert’s recent webinar “Counterfeit Risk & Mitigation Thought Leader Panel Discussion” exhibited important points about anti-counterfeiting.

The pursuit for anti-counterfeiting knowledge in the semiconductor industry remains high.The need to educate individuals on the basics of anti-counterfeiting in the semiconductor industry remains constant.

The Semiconductor Industry Association’s first major US / EU joint meeting to corroborate a basic understanding of semiconductor counterfeit took place in 2007.  During the 12 years since this meeting, the pursuit of knowledge of this phenomenon has gone from “What is semiconductor counterfeit?” and “Where is it coming from?” to the creation of globally recognized standards for avoiding counterfeit components, establishment of government sourcing rules and development of complex solutions for component tracking.

Companies and industry forums have transitioned from quarterly meetings to exchange data on fundamental counterfeiting methods to a global exchange of anti-counterfeiting guidance at the World Semiconductor Council (WSC) and the Government/Authorities Meeting on Semiconductors. The continuous expansion of knowledge and the sharing of it has permitted advanced training and operational planning with regional governments, customs, law enforcement agencies, supply chain intermediaries, and more. Overall, the industry has made great strides fighting counterfeit semiconductors.

Unfortunately, counterfeit continues to proliferate the market and there is no sign of it stopping. Therefore, we must continue to research, share, and strive for more knowledge. As a result, information on counterfeiting methods, advance tracking technologies, government laws and policies, best practices, counterfeit cases, etc. will continue to expand. It’s easy to understand how individuals new to anti-counterfeiting in the semiconductor industry could be overwhelmed from this ocean of information, especially if they have to reinvent the wheel… “What is semiconductor counterfeit?” and “Where is it coming from? People and priorities change in all businesses. Unless deeply embedded in the company culture, anti-counterfeiting is likely to lose attention and effectiveness as these changes occur.

If your company produces, acquires, or uses semiconductor products, an anti-counterfeiting program with a clear structure, established procedures, proper tools, recurring awareness training, and senior management support should be an integral part of your corporate culture. Your program must be capable of surviving any one individual involved in the program.

The following best practices proposed by the WSC should be considered:

Buy Authorized.Plan ahead when receiving Product Change Notifications or Discontinuations. Use authorized “after-market distributors” when necessary.Understand the potential counterfeit risks for your company and to your end users when sourcing from non-authorized distributors and when using product without 100% traceability.Establish strict procurement procedures that only allow authorized, proven distribution channels – ask for evidence of traceability, liability and warranty.Establish secure procedures for your scrap management and return material authorizations. Ensure they are followed at all times.Report suspicious parts / counterfeit parts to OCM and government agencies.Implement a counterfeit electronic control and a counterfeit mitigation policy.Spread anti-counterfeiting awareness in your company and at your sub-contractors.For parts bought outside authorized distribution chain: Implement a fraudulent part detection plan (Documentation and Packaging Inspection, Visual Inspection of parts, solvent Test for Remarking, Solvent Test for Resurfacing, Electrical and x-ray tests, etc.)Be aware analysis results of picture labels or a few pieces cannot be automatically applied to the remaining pieces of a shipment which are not tested. Such analyses are inconclusive and potentially misleading.

Counterfeit semiconductor products will be a part of the future. Take the proper steps to ensure the anti-counterfeiting knowledge necessary to mitigate and hopefully one day defeat this phenomenon is sustained. Don’t keep reinventing the wheel.