10 Ways PLM Helps Reduce the Risk and Cost of Counterfeit Parts

PLM_Counterfeit Parts, Photo: flickr.com/photos/sybot/

In a previous post, I likened counterfeit parts to a disease that must be vaccinated against.  There is no single fool-proof counterfeit prevention, but a combination of Product Lifecycle Management (PLM), careful testing/inspection, and advanced labeling technologies are a powerful formula to reduce the occurrence of counterfeits in manufactured products.

Of these three, PLM is often over-looked, as its processes typically occur furthest away from manufacturing. How can upstream design data management help reduce the risk of counterfeits that walk onto the shop floor from the loading dock?

  1. Maximize design quality. Designers who follow good practices lock-in part form, fit, and function, and this information is crucial to development of adequate product test and inspection procedures. PLM does not ensure proper designs, but it does help ensure continuous improvement of designs.
  2. Ensure reliable design data. Released designs have typically undergone numerous design cycles. PLM systems provide access and lifecycle controls to ensure that design data is safe-guarded. Robust document and CAD data management is a critical capability to ensure trust in your data. PLM systems also provide secure supplier collaboration over the internet, to help ensure that a counterfeiter is not handed your precious designs by a network hacker.
  3. Improve product quality. Even a well-built design could suffer from bad assumptions, which sometimes reveal themselves during use by customers. Product failures should be captured and analyzed for root cause, and that knowledge applied to future product designs. Some portion of failures could result directly from counterfeits. PLM systems can track events and often provide tools for quality analysis. As designs are refined, newer versions can be managed in specific configurations.
  4. Manage part obsolescence. Many products out-live their components in the market place. For example, aircraft and automobiles tend to out-live the electronics that keep them running. In most cases, newer components replace older ones as they disappear from the market, often resulting in product upgrades. But uncontrolled obsolescence can lead to unforeseen part shortages, and emergency purchases from less-than-trusted suppliers, opening a frequently used door to counterfeits. Managing replacement parts and product configurations is a core capability of PLM systems.
  5. Standardize and automate production planning. PLM systems provide tools to transform designs into manufacturing plans. Having consistent plans reduces the likelihood of human error from engineering, to procurement, to assembly, to final inspection. Of course, errors go beyond counterfeits. But, reducing errors also reduces one pathway for counterfeits to enter during manufacturing.
  6. Analyze impact of counterfeits. Since eliminating counterfeits is more art than science, it will eventually happen that one will make its way to a test, inspection, or assembly station. Having reliable and comprehensive design and process data with linkages to related data up and down the product, value, and work structures, allows a thorough analysis of how the fake got there, and how it should have been prevented sooner. PLM systems are terrific at capturing lessons learned, and ensuring that design, procurement, and production mistakes are not repeated.
  7. Continuously qualify suppliers. PLM can manage many automated processes in various states of completion, facilitating periodic analysis of supplier performance. Many PLM systems either provide or integrate with supplier score cards and portals, both of which help ensure clear and consistent communications, reducing the risks of mistakes that could allow counterfeits in.
  8. Pick your sourcing partners carefully. With a stable of quality suppliers, and standardized production processes, trusted partners can be identified and rewarded with larger portions of your business, which helps to reduce counterfeit risks and ensure reliable fulfillment.
  9. Reduce the number of parts. PLM systems provide search and data matching tools that help determine if one part is like another. Minimizing the numbers of unique parts in your database and your inventory reduces complexity, minimizes costs, and eliminates a source of errors that could allow counterfeits in.
  10. Integrate with industry part databases to ensure timely and accurate end-of-life and quality/counterfeit alerts.

While not a panacea, implementing PLM eliminates some percentage of the risks to your brand, and direct costs associated with counterfeit remediation. Assuming that five to seven percent of your supply chain is probably counterfeit, it’s worth adding up the risks and costs and considering how PLM technology might help.

Learn more about PLM and supply chain risk.

Photo Credit: Flickr (CC BY 2.0), Odd One Out by Sy Clark

About Fred Smith

Fred Smith is a Houston-based PTC process architect with particular interest in supply chain matters. He has spent almost 30 years romping around product development in the aerospace, medical device, energy, and software industries. He has a BS degree in computer science from the University of Missouri, and MS degrees in electrical engineering and computer science from Washington University in St. Louis.
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