Using Modern Labeling Features to Reduce Electronics Counterfeiting

Electronics counterfeiting is a serious problem that ramps up in times of demand.
Electronics counterfeiting is a serious problem that ramps up in times of demand.

Counterfeiting of components is a major threat to your electronics business. When falsified components enter your manufacturing supply chain, dealing with the intrusion could prove costly and damaging to your reputation.

The fight to keep compromised and fake hardware out of the electronics industry is largely concerned with increasing visibility between trading partners. The features associated with modern barcode labeling technology deliver this kind of insight.

How and Why Does Counterfeiting Occur?

False components enter the supply chain due to a simple force: opportunity. When legitimate manufacturing can't keep up with demand for electronics parts, manufacturers may be willing to loosen their standards and try less-established partner organizations, according to EPS News. Counterfeiters take advantage of this more lax sourcing attitude and sell false parts.

Previous cycles of increased production have led to flooded markets and disappointed component makers, which has left them hesitant to scale up their capacity again. EPS News reported this attitude has created a dilemma for electronics makers. Manufacturers are much more likely to encounter counterfeiters when the legitimate parts market is stretched to its limits.

Manufacturer ACDi pointed out the real threat of false components: These parts sometimes work well enough to make it through testing and into finished products. Then, those goods may make it to the public, where the substandard, counterfeit hardware will become the kind of threat that demands a recall. Using the latest and most reliable methods to detect fraudulent parts is essential.

A circuit board with LED components.Are electronics components legitimate? It can be hard to tell.

What Can Modern Labeling Accomplish?

Having a centralized labeling system is a valuable anti-counterfeiting measure. A labeling solution connected directly to a single source of data truth, such as an enterprise resource management system, offers a consistent way to keep track of individual parts and the finished goods that receive those components. Modern features such as hard-to-replicate holograms and serialized numbers that can be verified, can be used when labeling components to enable authentication and make infiltration more difficult for counterfeiters.

Also, when your labeling solution can be extended to partner companies you can ensure accuracy and consistency along with increased visibility. This reduces the risk of counterfeiting and diversion and generates a clear picture of where hardware comes from. Traceability is a boon for today's electronics manufacturing supply chains, allowing companies to become more efficient and cut down on potential sources of confusion, such as data replication. False parts thrive when there is a lack of visibility in the supply chain. Advanced labeling solutions enable manufacturers to easily include critical data to help track and trace electronics throughout the supply chain. 

For more on Electronics Labeling check out our recent Q&A on the topic.

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Joe Longo

Posted By Joe Longo

Joe Longo is Electronics Industry Specialist with Loftware and has been working with Loftware enterprise customers in the electronics industry for over seven years. His customers include some of the largest electronics manufacturers in the world: Jabil Circuits, Flextronics, Celestica, Kemet, Plexus, GE and more. Highly knowledgeable about the key issues most EMS manufacturers are facing today, he provides in-depth studies and recommendations to electronics manufacturers on solutions to their labeling requirements.

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