Counterfeit Components – Assessment Methodology and Metric Development

1. Counterfeit Components – Assessment Methodology and Metric Development • Supply Chain Risk Management • 10.04.2011

2. Supply Chain Security • iNEMI member products live in the middle of supply chains • Member products rarely begin or end a chain • We live in the middle of supply chains • Therefore, iNEMI members must play both roles: • As the consumer / customer • As the supplier / vendor • iNEMI is an ideal organization to test proposals or pilot novel concepts • Requirements for information from suppliers must also be delivered to their customers • More specifically, all customers will eventually need improved visibility into the pedigree of the electronic components, materials, and assemblies they use

3. Counterfeit Components Background Material and Context • Counterfeit electronic components are not new and have been around for many years • A rise in global trade of counterfeit components continues • Electronic components are used in many different products and counterfeit products generally fall into three categories: • Manufacturing shortfall/product shortages • High value products • Obsolete, discontinued, and legacy devices • Options / Upgrades

4. Scope of Work • Focused on those attributes which are of most value to the supply chain and the participating project members • Applicable to multiple spaces across the supply chain • The project will identify and develop methodologies with associated metrics to assess the overall extent of the counterfeit problem in the electronics industry. The output will enable iNEMI members to assess: • the risk of counterfeit use in their respective industries, • the risk of untrusted sources of supply in that industry and • generate the total cost of ownership associated with those risks... • The methodologies and strategies apply to all phases of the manufacturing cycle and supply chain. • Not only do counterfeit components have a serious impact on the OCM, but impact all upstream users from the legitimate component brokers to the OEMs that integrate these components to the end-user. • Metrics to assess the overall extent of the problem and anti-counterfeiting will be identified for all phases.

5. Project Is / Is Not Analysis

6. Outcome of Project • Description of assessment methodology • Documented pilot use of the methodology at some iNEMI members • Information needed for application of the methodology • Project report • Sharing Project Results: • The project team will determine what information will be shared outside of the team

7. Jim Arnold Jim.arnold@inemi.org