ERAI Risk Mitigation Tools to Address Today’s Complex Global Marketplace - Snider

A WORLD OF INFORMATION AT YOUR FINGERTIPS

Overview of Counterfeit and Substandard Parts in the Global Hi-tech Electronics Supply Chain

ERAI Risk Mitigation Tools to Address Today’s Complex Global Marketplace

October 1, 2009

Mark Snider PresidentERAI, Inc.

([email protected])www.erai.com

© 2009 ERAI, Inc.

®

© 2009 ERAI, Inc.

INTRODUCTION TO ERAI, INC.®

• Founded in 1995, ERAI is an information services organization that monitors, investigates and reports issues affecting the global hi-tech electronics supply chain.

• ERAI provides tools to mitigate risks on substandard parts, counterfeit parts, vendors and even customers.

• Subscribers include OEMs, CMs, Distributors, OCMs, government agencies and industry associations.

• Actively involved in a number of committees and task forces addressing the counterfeit issue.

A world of information at your fingertips

© 2009 ERAI, Inc.

ERAI’S FIRST COUNTERFEIT INVESTIGATION®

• First counterfeit part approximately 10 years ago• Toshiba (Japan) verses Samsung (Korea)• Mid Nineties sees increase of outsourced

manufacturing due to cheap labor markets• Taiwan, Singapore, Malaysia• Mexico• South America• India• China


© 2009 ERAI, Inc.

SOME ROOT CAUSES OF COUNTERFEITS®

• Chinese governments willingness to overlook the problem

• Enormous pool of cheap labor• The ROHS Initiative• E-Waste – The cost of going Green• Outsourced contract manufacturing driven by

price considerations over quality• Internet makes global market access easy


© 2009 ERAI, Inc.

TOTAL COUNTERFEIT INCIDENTS:®


3,868

8,139

9,3568,600

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005 2006 2007 2008 (est.)

OCMs, Distributors, Board Assemblers, Prime/Sub Contractors 2005 - 2008

US Department of Commerce – Preliminary Data (As of March 4, 2009)

ALLMOST PERFECT E-WASTE

A world of information at your fingertips© 2009 ERAI, Inc.

®

TC58FVM6T2AFT65Manufacturer: TOSHIBA

ALLMOST PERFECT E-WASTE


®

TC58FVM6T2AFT65 (TOSHIBA)

A World of Information at Your Fingertips© 2009 ERAI, Inc.

®

IS DETECTION EASY?

ERAI RISK MITIGATION TOOLS


®

THE WORLD LEADER IN COUNTERFEIT COMPONENT INFORMATION AND RISK

MITIGATION SERVICES

• Mitigate Risk Associated with Parts, Customers, & Vendors

• Counterfeit, Faulty & High Risk Parts Detailed Reports

• Bill of Material/Assembly Cross Checking Against High-Risk Parts Database

• Vendor and Customer Analysis• Proactively Prevent Losses & Recurring

Problems• Reporting and Tracking Data on Corporate

Identity Theft• Review Member Profiles for Membership Status

and Quality Achievements

© 2009 ERAI, Inc.

®

ERAI BENEFITS



®

HIGH RISK PARTS SEARCH STEP 1


®


HIGH RISK PARTS DATABASE


®

ERAI MATERIAL SCRUBBER


®

THE FILE



®

Step 1



®

Step 2



®

REPORT



®

Scrubber Management Suite


®

COMPLAINTS SEARCH STEP 1


®


© 2009 ERAI, Inc.

THE SUPPLY CHAIN IS COMPROMISED®

• Fab-less IC production continues to grow• Scrapping procedures can become

compromised• E-Waste is likely to continue to grow• No one is immune in the supply chain• RMAs from customers back to franchise or

factories• Stock rotations back to factory from franchise• Create a program to address the issue-it’s not

going away anytime soonA world of information at your fingertips

• Mitigate risk-parts, customers and vendors• Enhance quality management and

procurement practices• Proactively prevent losses, recurring

Problems• Stay informed with real time information on

hi-risk parts• Encourage your vendors and sub contractors

to get involved and be proactive

© 2009 ERAI, Inc.

®

SUMMARY


ERAI Risk Mitigation Tools to Address Today’s Complex Global Marketplace - Snider

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