Traceability: a key logistics component

DigiKey’s VP of operational excellence, Teri Ivaniszyn, explains how the benefits of buying traceable products range from brand reputation to cost reduction.

DigiKey’s VP of operational excellence, Teri Ivaniszyn

The electronic components supply chain has evolved immensely over the past few years. That transformation involved challenges that continue to drive the need for greater accountability and transparency, including a rise in counterfeit activity.

Counterfeit products may appear very similar to the authentic version or even be refurbished components sold as new. It can sometimes be difficult to tell the difference, with little details such as packaging or a ‘not-quite-right’ appearance giving away the inauthenticity. Other times, the differences are undetectable without sophisticated technology.

In an era where competition is stiff and gaining consumer confidence is vital, traceability is critical to protecting a brand’s reputation. If a product is recalled or a malfunction occurs during testing, being able to trace the issue back to the manufacturer accurately and quickly can mean the difference between reaffirming customer trust or ruining reputation. As the IoT realm continues to grow, and within the medical, aerospace and automotive industries, the need for greater traceability is increasingly important.

In addition to bolstering and maintaining a brand’s reputation, sourcing traceable products can also save companies a considerable amount of money. If any faults arise with a product, the OEM or subcontractor can get a recall notice out quickly—reducing legal costs and mitigating
profit loss. Defects with genuine products can also be quarantined much easier than in counterfeit parts, curbing the amount of manpower and time spent on correcting an issue.

Top practices

The desire for traceability information has led to the creation of independent organizations and governing bodies that have established standards and certificationsthat ensure traceability back to the source. Two of the top industry associations working to address and mitigate this issue are the Counterfeit Avoidance Accreditation Program (CAAP) and the International Organization for Standardization (ISO).

Obtaining a CAAP certification means that an external auditing company has verified a distributor’s counterfeit controls and that the components are compliant with aerospace standard AS6496. Distributors should also have controls in place for disposition, inventory, receiving and customer returns, and these controls should adhere to AS6496 as well.

DigiKey follows industry best practices for distributors like only buying directly from franchised manufacturers to ensure the component is new, authentic and fully warrantable under the direct supplier, and that accurate, up-to-date technical information is readily available. We also hold valid part documentation for at least ten years to prove the traceability of the part and its authenticity and have this documentation readily available to any customer upon request.

If suspected or confirmed counterfeit products are identified in the supply chain, distributors should have documented processes in place to quarantine the products and report the findings to suppliers, customers and appropriate authorities.


Traceability commitment

One of the most important ways distributors can support engineers, designers and procurement professionals is by ensuring they have access to the highest-quality components on the market. We’re excited about the growing dialogue around traceability and the greater demand for authentic products.