Reports of bogus parts entering the supply chain of reputable original equipment manufacturers (OEMs) have been flooding news outlets for years.
We’ve all heard the stories of dangerous accidents caused by shoddy parts. It’s said that phony auto parts cost the global automotive industry approximately $12 billion annually. That industry alone could employ an additional 250,000 workers if counterfeit parts sales were eliminated, according to the U.S. Federal Trade Commission. According to a survey of risk professionals carried out by Marsh & McLennan, 73% of North American firms say their supply chain risk has increased since 2005, and 71% say that the financial impact of this risk has also risen. So what can be done to mediate the problem?
Not long ago, the Construction Industry Institute (CII) hired a team of researchers to study the issue and deliver a detailed paper with recommendations for parts suppliers and manufacturers alike. Here are those suggestions.
Supplier pre-qualification, manufacturing surveillance, resident inspection, third-party verification, and unscheduled in-process inspections are all activities that manufacturers need to diligently perform or procure if they are to maintain supply chain integrity.
- Confirm and verify that every link in the supply chain is secure and observed. Responsible manufacturers have designed and implemented highly reliable and secure distribution networks that ensure product integrity. For branded products, trust only manufacturer-authorized distributors. The use of brokers, re-sellers, and unauthorized distributors (at any level in the supply chain) are common entry points for counterfeit products. An immediate supplier could be trustworthy, but could also be a victim of counterfeit entry points upstream. For non-branded products, a holistic approach to the more traditional quality control (QC) techniques is instrumental.
- The industry as a whole should adopt a zero-tolerance policy regarding counterfeiting. Report all incidences of counterfeiting to the appropriate authorities and never fail to support any law enforcement agency’s effort to prosecute to the full extent of the law.
- Train/educate procurement, quality management, and field personnel on the dangers of counterfeit goods. Teach them how to prevent their entry into the supply chain and to mitigate the damage they do if they are already present.
- Train/educate customs officials and other law enforcement agency personnel regarding measures against counterfeit construction goods and materials—not just the higher-profile retail products.
- Establish more stringent supply-chain management activities, such as enhanced supplier pre-qualification, more diligent sourcing practices, manufacturing surveillance, resident inspection, third-party verification, unscheduled in-process inspections, and any other exercises that will give owners and contractors more confidence in the integrity of the products they’re paying for.
- Use effective positive materials identification (PMI) processes—or other methods of validation—extensively throughout the supply chain.
- Put more emphasis on documenting the quality and integrity of the sourcing of raw materials and commodity items.
Here at Perfection Spring and Stamping Corp., we take our oversight duties very seriously. Our quality systems are certified to ISO/TS 16949:2009 Standards and we only purchase raw materials meeting proven ASTM, JIS and DIN specifications and standards. As a key supplier to a wide range of industries, our commitment is to provide the highest quality parts to exceed the design requirements and expectations of our customers, and ultimately their customers. To learn more about our commitment to supply-chain quality vigilance, please feel free to contact us at any time.
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