PEI-Genesis’ senior VP and European MD, Jonathan Parry, explains why mission-critical industries need to fight the fake.
A perfect storm best describes the events of the last five-years that led to a global component shortage. Combine the US/China trade war, Brexit, rising copper prices, growing adoption of electric vehicles, record sales of industrial robots and a global pandemic, and you have quite the storm.
A consequence of component shortages is a rise in counterfeiting. Shortages, price hikes and obsolescence are driving some OEMs to take shortcuts. Research firm Havocscope estimates $169bn of counterfeit parts are in circulation. You don’t have to knowingly buy a fake to be affected.
Counterfeit parts include: parts that don’t conform to the original design; parts produced by unauthorised contractors; parts that are off-specification; and defective or used parts sold as new. For the user, consequences can range from mild (reduced accuracy in a desktop robot) to life-threatening (an unresponsive aircraft sensor).
PEI-Genesis is a distributor and manufacturer of cables and connectors with facilities in North America, Europe and Asia, supplying the military, industrial, medical, aerospace, transportation and energy sectors.
The company is uniquely placed to break the chain between component shortage and counterfeiting. PEI-Genesis holds $90m dollars of global inventory in component form. So, rather than hold finished products that could become obsolete, it can build millions of combinations of products using the parts. Combined with a highly automated manufacturing process that promises a 48-hour lead time and a minimum order quantity of just one, there’s no reason for customers to turn to counterfeits.
OEMs should be wary of the grey market. Buy from trusted distributors that have long standing relationships with major brands. For brands like ITT Cannon and Amphenol we must make sure we abide by their stringent quality standards. Customers can audit our manufacturing facilities at any time, and they regularly do, once a week or so.
Over time, this transparency means we’ve reached a trusted advisor status for many customers, particularly those in the defence sector. In such sectors, price is often a secondary consideration to safety and trusting a supplier to deliver parts that protect people’s lives becomes the primary objective.
Supplying cables and connectors into hazardous areas requires cradle to grave traceability. We track supplier shipments from the moment they enter the manufacturing facility to the finished product we send to customers. We inspect deliveries, matching the shipment to our records, and every person in the process wears an armband to log the movement of parts. This means we can trace a cable or connector back to when and where in the world it was produced, where the components came from and who quality-checked the product.
We live in turbulent times and industry faces difficult, but not insurmountable, challenges. Understanding the nature of fakes, choosing carefully where you buy parts and ensuring supply chain traceability is what’s required to create an equally perfect storm of countermeasures.