By Dale Lillard, President, Lansdale Semiconductor, Inc., Phoenix, AZ

The only way a manufacturer can confidently be sure that an end user of its product is not getting a counterfeit is to sell the product directly to them without using a middle sales channel and to never restock returned product for resale.

This can be difficult for large manufactures who use distributors in their sales channel. Precautions must be taken to ensure that the distributors recognize their responsibility in preventing counterfeit product being returned to them for restocking. In light of the magnitude of the problem, I recommend that restocking be discontinued as it is very difficult for them to detect counterfeits, and once the product leaves the control of the distributor or manufacturer, it can be replaced with counterfeits and the substitution not be detected. Warehouse security also needs to be enhanced to make sure product is not replaced with counterfeit parts by unscrupulous employees which might not be caught by standard inventory count monitors.

Manufacturers must control reject material and establish a process that ensures that all scrap product in any form is truly destroyed, ensuring that it does not leave the operation and fall into counterfeiter's hands. Monitors should be in place ensuring inventory flow-thru balances out so that all rejects are accounted for and destroyed, particularly by subcontract manufacturers.

The manufacturer must also ensure that their sales channel follows the guidelines and audit them accordingly. They must not sell product that is not sourced directly from the manufacturer. No one would accept a knee replacement if it was not from the original manufacturer or a blood transfusion with blood not from the blood bank. So why would we accept electronic products from unauthorized sources, particularly military products whose failure can have life or death consequences?