Senate to tackle counterfeit component market
One of many police raids taking place in the southern China, Guangdong province, led to a small all in one factory of fake SUN servers, with 1.2 million part assembly line leading to a “testing” area, which reminded me of my father’s radio shop in the 80s, onto an extraordinary accurate labeling and packaging area. This is one of dozen raids executed weekly in these areas but definitely not only, these non-drug related raids occur more frequently now in the India, parts of Eastern Europe and the US than we want to believe.
Years back, the huge counterfeit parts problem played into the hands of component manufacturers, as it kept OEM’s attached to official distributors and kept many distinguished manufacturers out of the pre-owned materials market but it seems that’s not true anymore. Both pre-owned materials and counterfeit components grew to huge market share of 20 billion dollars a year recently, shifting the way huge manufacturers look at this, not only by maintaining their brand brushed but also in terms of adjusting their assembly lines to match a huge market of hard to find components and part sourcing.
Joe Hardy, a private sourcing consultant, says that “with per part profit margin falling in recent years and the existence of part replacement choices from trusted sources. Component manufacturer feel they miss on a huge market driven by order instability due to low world demand”
An answer in a form we already know was recently suggested by business opinion leaders. Emerged out of recent senate panel committee considering adding language to the defense authorization act for 2012 that would hold contractors responsible for the costs of replacing a part that is discovered to be counterfeit, Said at a Nov. 7 press briefing by Sen. Carl Levin, D-Mich.
It’s entirely crucial that components will be tracked. Perhaps more importantly allow manufacturers fairly trade on their growing excess inventory.
SOX laws changed, leaving manufacturers to deal with the consequences of inventory management leading to either substantial write offs or time to market delays. A Transparent stock market like market could connect the material and product manufacturers in a bond that would benefit all.
Allocation would be easily made, counterfeit products will not be sold (they would be traced) and cost saving to manufacturers would be fundamental, allocation of materials not being manufactured would be possible without taking the risk of using counterfeit components in essential products.
Electronic component market is what tells us how good the gadgets and products we use are, it’s crucial for OEMs product responsibility as well as their social responsibility with tractability of parts and demand for cheap parts growing. No doubt tapping into pre-owned components market would be highly profitable to these manufacturers. OEM would know they could rely on component manufacturers to provide them with parts when they need to replace existing ones after a while.
surplus inventory – Peribanu is the leading second hand market place for the hi-tech industry. Over 1,200,000 products available for purchase right now!