Download Counterfeit Parts – Art Mester, The Boeing Company

The Counterfeit Parts & Materials
Challenge
15th Annual CQSDI
Cape Canaveral, FL
March 26-27, 2008
Lloyd Condra, Boeing Phantom Works
Tony Marino, Boeing Integrated Defense Systems
Art Mester, Boeing Integrated Defense Systems
Bill Procarione, Boeing Integrated Defense Systems
Bill Scofield, Boeing Phantom Works
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Outline
Engineering, Operations & Technology | Phantom Works
• Scope of the Problem
• Internal Controls
• External Activities
• Supply Chain Controls
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Scope of the Problem
Engineering, Operations & Technology | Phantom Works
Almost anything can be counterfeited
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Fasteners (bolts, nuts, rivets, fluid bolts)
Electronics (capacitor, resistor, Integrated Circuits)
Materials (titanium, composite chemicals)
Anything else (Electronic Assemblies, Pumps, Actuators, Batteries, etc.)
Counterfeiters are very creative
• Darwin rules
• There is no “final” solution
There are many sources of counterfeit parts and materials
• The supply chain is large and complex
• Aerospace has limited control
Impact of using counterfeit parts or materials
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Potential loss of life
Monetary loss
Liability
Lack of availability of our products for customer use
Loss of customer/public trust and image
Brand damage
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Scope of the Problem
Engineering, Operations & Technology | Phantom Works
Counterfeiting accounts for more than 8% of global
merchandise trade and is equivalent to lost sales of
as much as $600B and will grow to $1.2T by 2009.
Ref: Dept of Commerce
Counterfeit parts are usually ½ or less of the
street price for genuine goods. The intense
pressure on cost adds to the attractiveness
of counterfeit parts.
The true numbers are not known. Industry is attempting to
quantify the costs.
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A “Typical COTS” Microcircuit Product Flow
Engineering, Operations & Technology | Phantom Works
The COTS microcircuit chain is….circuitous. The
number of potential combinations of links is large, and
growing. The level of “control” is shrinking.
μcircuit
design
Dist.
Test
Ass’y
Fab
Avionics
OEM
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The Electronics Supply Chain
Engineering, Operations & Technology | Phantom Works
Parts mfrs.
OEMs
Distributors
Design
Fab
Ass’y.
Aftermarket
suppliers
Aerospace
captive
Aerospace
Integrators
Aerospace
Operators
Brokers
Commercial
Test
Aerospace
captive
Customers
Source
facilities
Beyond aerospace control
Commercial
Aerospace
repair shops
Every arrow is a potential
source of counterfeit parts!!
Within aerospace control
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Potentials Sources of Electronic Components
Engineering, Operations & Technology | Phantom Works
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Original manufacturers
Authorized distributors
Unauthorized distributors
After-market suppliers
Third-party test houses
Component source facilities
Other programs (excess inventory)
Other OEMs (excess inventory)
Emulators, etc.
Contract assemblers
Etc.
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The Boeing Approach
Engineering, Operations & Technology | Phantom Works
Counterfeit Product
Executive Steering
Committee
Art Mester
Tony Marino
Lloyd Condra/
Bill Scofield
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Internal Controls
Engineering, Operations & Technology | Phantom Works
• Requirements
• Develop enterprise-wide procedures and requirements
• Flow down to all appropriate links in the supply chain
• Implement verification processes and criteria
• Source Selection
• Lists of approved sources/ parts
• Other sources by exception and with specific approvals
• Confirmation
• Quality, Supplier Quality Labs
• Communication/Reporting
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IBA (Inter Boeing Alert)
Legal
Reporting
Authorities (FBI) Treasury Dept
GIDEP
NASA
FAA
IP Team (if required)
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External Activities
Engineering, Operations & Technology | Phantom Works
• Develop Industry Standards and Tools
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AIA (Boeing delegates)
GEIA
IAQG (International Aerospace Quality Group)
IEC (International Electrotechnical Commission)
Benchmark with Underwriter Laboratories with their Counterfeit
organization
• Implement with Customers
• FAA and commercial airline customers
• DoD and service operators
• NASA
• Verify Compliance
• Processes
• Criteria
• Report Occurrences
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Authorities (FBI) Treasury Dept
GIDEP
NASA
FAA
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Supply Chain Controls
Engineering, Operations & Technology | Phantom Works
At each portal of entry, we need assurance that the
pedigree of a given part is traceable through all of the
previous links in the supply chain to a known, credible,
and “authorized” source.
That assurance must be based on:
1. Aerospace industry consensus rules (documents,
etc.) that are
2. Applied consistently across all programs, and
3. Verified by agreed-upon processes and criteria.
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How Do We Do This?
Engineering, Operations & Technology | Phantom Works
• Involve all stakeholders
• Aerospace:
– Supply Chain: OEMs, integrators, operators, repair shops, industry
organizations, government, airlines and other operators, etc.
– Market Segments: commercial, military, space
– Geographic regions: North America, Europe, Asia
• Non-aerospace: part mfrs., distributors, industry organizations
• Develop rules
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Address issues within aerospace control
Insure a “level playing field”
Address issues unique to aerospace
Assure pedigrees of all parts
• Communicate
• Within aerospace
• Between aerospace and other industries
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