Vice President Biden spoke at a White House ceremony recently introducing a new approach to regulating the food supply chain. In order to ensure foods are delivered safely to Americans, the administration is pushing for a broad set of supply chain controls that will increase visibility of foodstuffs all the way from farm to shelf.
The global electronics supply chain is far more complex than that of even the American food supply chain and far too globalized for any one country to regulate. Regardless, the supply chain is vulnerable but there is a solution. A market solution.
All counterfeit enters the supply chain from the secondary market, by way of primary market firms dumping their excesses to independent distributors or brokers. Once those legit parts leave the primary channel, they lose all traceability and are suspect. Until a few years ago, the independents/brokers would filter out the fakes with physical & visual inspections, but since sophisticated manufacturing techniques have made it to China and elsewhere, the fakes are simply too good for the middlemen to spot. Since many unscrupulous independents and brokers will mix bad parts in the good, you cannot ever be totally confident in a part coming from the secondary market.
Governments can regulate until they are blue in the face, but counterfeiters will always violate the supply chain as long as 1) buyers have shortages, and 2) the secondary market doesn’t evolve. There are lots of regulations on the books, but they have proven useless against the ferocious tide of counterfeit parts coming out of China.
Regulations don’t work, inaccurate forecasts are simply a fact of life, #1 is impossible — our industry’s only hope to for the secondary market itself to change.
Traceability is the key.
As long as independents and brokers do not maintain traceability on their inventory and publicize it to their buyers, counterfeit will remain a threat to the integrity of the electronics supply chain.
