Thursday, April 10, 2008

NEDA joins ESCS to Combat Counterfeits at the CACP

Electronic Supply Chain Solutions Combats Counterfeits with some help from NEDA and the U.S. Chamber of Commerce’s Coalition Against Counterfeiting and Piracy.
ESCS President Matthew Heaphy said “I had the pleasure of sitting along side NEDA’s Vice President Robin Gray at the 4th Annual Summit on Counterfeiting in Washington DC. While NEDA’s focus is on its member franchised distributors and manufactures, ESCS is spear heading a movement among the aerospace certified distributors to urge others to recognize the importance of protecting the electronic supply chain from counterfeits. While ESCS was one of the early members. we are now 240th in alabetical order in a list of over 550 members. ESCS maintains a website called to educate it’s customers to make sound business decisions. As an independent AS9120 certified distributor ESCS focuses primarily on directly educating and protecting prime aerospace contractors by seeing that their special purchase order conditions and mil specs are flowed down to their sub contract manufactures, NEDA provides its franchised members and manufactures with valuable information to combat counterfeits. Whether the information is directed to the end user by ESCS or offered to the supply chain by NEDA both organizations agree the CACP is worth supporting. Click this link to hear more from ESCS President
While counterfeiting is not new to the electronics supply chain, what appears to be changing is the degree of proliferation of these parts into the authorized supply channel, notes Robin Gray, executive vice president of National Electronic Distributors Association (NEDA), Alpharetta, Ga. “Counterfeiting has been an ongoing concern for electronic component manufacturers. But until recently, the franchised distribution sector has been somewhat insulated from the problem,” he says. “We’ve seen a big change in the past couple of months: A lot more counterfeit product has been coming into the supply chain.”
Gray believes that most counterfeit product gets into the franchised channel as a result of OEM product returns. “Sometimes counterfeits get into the supply chain through the back door,” he says. “Customers mix product from their different sources, and then when they return inventory to authorized distributors, they may unknowingly be sending back counterfeit components.”
Distributors Take a StandRecognizing that it was time to take more aggressive action against the counterfeiting problem, NEDA recently joined Electronic Supply Chain Solutions and more than 285 businesses and associations that make up the U.S. Chamber of Commerce’s Coalition Against Counterfeiting and Piracy. Formed in 2004, CACP’s mission is to “increase the understanding of the negative impact of counterfeiting and piracy by working with Congress and the administration to drive greater government wide efforts to address this threat.” Gray reports that NEDA will take an active role on the CACP task force that is working with the government to help train business on spotting counterfeit components, as well as the authentication technology task force, which is working with vendors to develop ways to make it easier and less costly to identify fakes.
Outside CACP's purview, NEDA is collaborating with component makers on re-evaluating the returns process. “That is where distributors need to be particularly vigilant,” Gray says. “Once product is out in the channel, contaminated product can get back into an authorized source.” NEDA is also spearheading a public awareness campaign to educate the government and the public about the economic cost and social consequences that counterfeiting has on the United States.
While many buyers are simply swindled by the increasingly sophisticated methods used by counterfeiters to create look-alike products, some knowingly purchase “knock-off” goods, seeing little harm in buying a bootleg DVD, a fake “Gucci” handbag or even an imitation “Intel” chip. But the consequences are very real and are growing at an alarming rate, Gray says. Electronic Supply Chain Solutions Matthew Heaphy said “One of the major things that everyone needs to learn is that when a company invests its profits back into its products or services, that intellectual property deserves to be protected. When a company or parent allows the consumer to benefit from a counterfeit they not only cause losses directly, they also affect those in the distribution channel. I urge everyone to educate themselves first and then share your education with others. The ESCS website is a great place to start today!Excerpts of this article were combined with text from of Distribution Insider: An Industry Guide to Electronics Supply and Demand