Counterfeit Awareness and Avoidance Training. An overview of industry efforts to combat counterfeit parts.

5. Counterfeits -Origin

7. Counterfeit -E-Waste Laborer de-soldering circuit boards over a coal-fired grill. Rock in the box is where boards are hit to remove solder. Pliers are used to pluck off chips which go into various buckets. The boards are then tossed into a pile for open burning. © Basel Action Network 2006.

8. Counterfeit -E-Waste Workers extract plastics from discarded electronics in Guiyu, a few hours' drive northeast of Hong Kong. The city has 5,500 family workshops handling e-waste. © 2006 The Seattle Times Company

10. Counterfeit -Portals of Entry

11. All types of components are being counterfeited, even passives. % of reported counterfeits from ERAI database, 2004 to present Counterfeit -What is Being Counterfeited?

14. Counterfeit -Impact

15. Counterfeit Overview -Impact Dangerous Fakes How counterfeit, defective computer components from China are getting into U.S. warplanes and ships By Brian Grow, Chi-Chu Tschang, Cliff Edwards and Brian Burnsed The American military faces a growing threat of potentially fatal equipment failure—and even foreign espionage—because of counterfeit computer components used in warplanes, ships, and communication networks. Fake microchips flow from unruly bazaars in rural China to dubious kitchen-table brokers in the U.S. and into complex weapons. Senior Pentagon officials publicly play down the danger, but government documents, as well as interviews with insiders, suggest possible connections between phony parts and breakdowns. In November 2005, a confidential Pentagon-industry program that tracks counterfeits issued an alert that "BAE Systems experienced field failures," meaning military equipment malfunctions, which the large defense contractor traced to fake microchips. Chips are the tiny electronic circuits found in computers and other gear. The alert from the Government-Industry Data Exchange Program (GIDEP), reviewed by BusinessWeek (MHP), said two batches of chips "were never shipped" by their supposed manufacturer, Maxim Integrated Products in Sunnyvale, Calif. "Maxim considers these parts to be counterfeit," the alert states. (In response to BusinessWeek's questions, BAE said the alert had referred erroneously to field failures. The company denied there were any malfunctions.) In a separate incident last January, a chip falsely identified as having been made by Xicor, now a unit of Intersil in Milpitas, Calif., was discovered in the flight computer of an F-15 fighter jet at Robins Air Force Base in Warner Robins, Ga. People familiar with the situation say technicians were repairing the F-15 at the time. Special Agent Terry Mosher of the Air Force Office of Special Investigations confirms that the 409th Supply Chain Management Squadron eventually found four counterfeit Xicor chips.

17. Counterfeit -Impact

18. Counterfeit -Method Uncovered

19. Counterfeit -Where the industry has fallen short • Lack of dialogue between all organizations in the U.S. supply chain. • Companies and organizations assume that others in the supply chain are testing parts. • Lack of traceability in the supply chain. • Insufficient chain of accountability within organizations. • Recordkeeping on counterfeit incidents by organizations has been limited. • Stricter testing protocols and quality control practices for inventories are required. • DOD organizations have not had policies in place to prevent counterfeit parts from infiltrating their supply chain. © 2011 ERAI Inc.

20. G-19

21. Formation of G-19 (Sept. 2007) -Industry Working Together To Craft A Solution © 2011 ERAI Inc. Orbital Sciences Arrow Electronics Northrop Grumman Integra Technologies Honeywell Boeing Jabil SMT AERI ERAI IDEA AIA NASA JPL G-19

23. SAE G-19 Organization Chart

24. G-19 -A Multilayered Counterfeit Risk Mitigation Initative © 2011 ERAI Inc.

25. Brokers Independent Franchise Commercial Defense Space Inspection Test G-19 -Why A Three Pronged Attack? © 2011 ERAI Inc.

28. Counterfeit Parts Control Plan: SAE AS5553 Implementation Requirements … The organization shall develop and implement a counterfeit electronic parts control plan that documents its processes used for risk mitigation, disposition, and reporting of counterfeit parts …

29. SAE AS5553 Implementation Counterfeit Parts Control Plan: -Parts Availability Requirements … The process shall maximize availability of authentic, originally designed … parts throughout the product’s life cycle, including management of part obsolescence …

30. SAE AS5553 Implementation Counterfeit Parts Control Plan: -Purchasing Information & Verification Requirements … The documented process shall assure detection of counterfeit parts prior to formal product acceptance… … This documented process shall specify contract/purchase order quality requirements …

31. Solutions Example Procurement Clause SAE AS5553 Implementation … The seller shall establish and implement test and inspection activities necessary to assure the authenticity …

32. G-19

33. AS5553 Adopted By DoD

36. Industry Reports

37. Industry Initiatives AIA Counterfeit Parts Integrated Project Team Statement Counterfeit parts and materials can jeopardize the performance, reliability and safety of aerospace, space and defense products. Over the last several years, increasing amounts of counterfeit material have been introduced into the supply chain. Due to diminishing manufacturing source issues, the aerospace, space and defense industries may have difficulty in continuing to obtain manufactured products designed years ago to support fielded and new systems. The challenge of avoiding counterfeit parts and materials occurs when defense contractors and the government are obliged to purchase both electronic and non-electronic parts and materials to support fielded and new systems from independent distributors/brokers. Note: This document is in balloting

38. Industry Initiatives

39. Industry Initiatives - US Chamber of Commerce Coalition Against Counterfeiting and Piracy To fight the growing threat of counterfeiting and piracy to the economy, jobs, and consumer health and safety, the business community, led by the U.S. Chamber of Commerce's Global Intellectual Property Center, organized itself through a broad-based business coalition, the Coalition Against Counterfeiting and Piracy (CACP). Formed in 2004, the CACP has grown to more than 650 members, making it the largest business coalition of its kind. The coalition is committed to increasing the understanding of the negative impact of counterfeiting and piracy and to finding real solutions by working with governments, industry, opinion leaders, the media, and consumers. This year, the CACP is focusing on a few primary goals, which we believe will make a measurable impact in the fight against counterfeiting and piracy.

41. G-12 TechAmerica Engineering Bulletin (TB-0003)