Securing supply chains through data transparency and better market design.
The rise of counterfeiting in recent years has been astounding. The US economy loses some $250 billion annually with some three--‐quarters of a million jobs lost every year to what the Wall Street Journal has labeled as “nothing Short of an economic crisis.” The Pain reaches in to all corners of the economy, and the high technology manufacturing is no exception. Counterfeit electronic components can be found in all corners of high tech chain, from basic light switches and games to advanced medical scanners and telecommunications infrastructure. As electronic components find their way into more and more parts of modern life, the risk of counterfeit will threaten economic growth and consumer safety the world over. For the industry to successfully protect against this risk, we must understand its causes and how finds its way into the legitimate supply chain.
The threat of counterfeit components has never been greater. Counterfeiting is too profitable and too easy to stop. The high tech supply chain has never been more vulnerable, and the costs of counterfeit have never been so high.
Every time legitimate supply chains adopt a new approach to stop fakes, the criminal will adapt and defeat them. Markings, labels, testing all of these are just temporary defenses against highly motivated and well financed criminal syndicates.
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In the endless arms race of authentication and counterfeit, the counterfeiters will always win. Visual inspections may slow counterfeiters temporarily, but the criminals will always adapt and become even more sophisticated. The only defense that counterfeiters cannot defeat is one based on the one thing they cannot replicate: supply chain pedigree.
A part’s chain of custody resides in the databases of the legitimate manufacturers and distributors of the world.
Author John P. Brown is co-founder and VP of Marketing and Strategy at Verical, an emerging online electronic components marketplace. He brings a wide range of marketplace design and anti-counterfeiting. A term member of the Council on Foreign Relations, John focused on information management and infrastructure protection at the Department of Homeland Security and holds a BA, MPA and an MBA from Harvard. Learn more about Verical at http://www.verical.com/, blog: http://blog.verical.com, Twitter: @Verical, and email John at jbrown@verical.com.