the wrong way and right way of retaining a testing laboratory
DESCRIPTION
Counterfeit AvoidanceTRANSCRIPT
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Keith GregoryGreenberg & Bass
Kristal SniderERAI Inc.
December 1, 2010
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Counterfeit Overview
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Counterfeit Overview
2001 – China Admitted to WTO
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Counterfeit Overview
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Counterfeit Overview
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Counterfeit Overview-Portals of Entry
• Rapid access to millions of parts
• Minimal membership requirements
• Quick & easy access to a large audience of buyers
• Burn customer and re-register using a new name
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Counterfeit Overview-Impact
Impact of using counterfeit parts or materials• Potential loss of life• Espionage• Monetary loss• Liability• Lack of availability of products for customer use• Loss of customer/public trust• Brand damage
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Accountability is not an option
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What We Know
• There is a lack of dialogue between all organizations in the U.S. supply chain.
• Companies and organizations assume that others in the supply chain are testing parts.
• Lack of traceability in the supply chain is commonplace.
• There is an insufficient chain of accountability within organizations.
• Recordkeeping on counterfeit incidents by organizations is very limited.
• Stricter testing protocols and quality control practices for inventories are required.
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Communication is Key
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Communication is Key
Parts Availability
Purchasing Process
Supply Chain Traceability
Procurement Contract Requirements
Product Assurance
Material Control
Reporting
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Product Assurance
It should be established prior to procurement which party is responsible for product authenticity verification – Burn-In!
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What NOT to Do
The Wrong Way: Distributors and their customers should ensure that none of the following five methods are followed by them when choosing a testing facility:
The Distributor alone selects the testing facility;
The tests that are conducted are not sufficient to ensure whether the parts are valid;
The testing facility limits its liability;
The testing facility that is used is the only one that is used by the Distributor or its customer; and
The Distributor agrees to the testing facility’s terms and conditions without first reviewing them and then not trying to negotiate changes to them.
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What TO DoThe Right Way: In order to ensure that Distributors and their customers are protected from a testing facility’s negligence and to further reduce the possibility of consummating a transaction involving counterfeit or mismarked components, Distributors and their customers should adhere to the following five rules:
Distributor and Customer work together to select the testing facility and the type of testing;
The Customer is advised upfront that the costs of the components are at least somewhat dependent upon the cost of the testing;
Multiple testing laboratories are considered;
Terms of agreement with testing laboratory are negotiated and no limitations of liability are agreed upon; and
Discover the type of insurance maintained by testing laboratory and its level of certification.
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REVIEWProcurement contract language should include requirements which will help ensure that conforming, authentic material be provided!
• Traceability• Inspection and Test• Liability• Insurance requirements• Warranty• Specific product
specifications• Penalties• Confiscation/destruction
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Thank You!
QUESTIONS?
Keith GregoryGreenberg & [email protected]
Kristal SniderERAI [email protected]