Special Report – Next Generation Anti-Counterfeit Mitigation Process

Special Report

Next Generation Anti-Counterfeit Mitigation Process Combatting Counterfeit Components Counterfeiting Risk for Embedded Electronic Components Obsolescence Management: The Cost of Legacy Systems Testing, Testing‌Which Test Works?

The Future and the Best Mitigation Strategies‌

Published by Global Business Media

Market Leaders in Counterfeit Avoidance IN-HOUSE GLOBAL TESTING FACILITIES

Counterfeit components are a global problem.

Astute provide a truly global solution. Many of our competitors talk about the testing procedures they offer but very few actually run their own equipment in-house. At Astute we pride ourselves on the continual investment we make - over £1m to date on cutting edge test equipment, enabling us to offer a truly unique and comprehensive global quality programme.

• High Powered Microscopy • Marking Permanency & Dynasolve • ED XRF Spectrometry • Real Time X-Ray • De Cap/ Lidding- Chemical & Physical • Scanning Electron Microscopy (SEM) • Solderability Testing Our customers enjoy total peace of mind that our independently-owned equipment gives us complete control to ensure counterfeit-free consignments every time, with a 10 year guarantee. But don’t take our word for it – feel free to visit us and see for yourself how our testing facilities provide global reassurace.

Email us at: testcentre@astute.co.uk

01920 484 838 • www.astute.co.uk • sales@astute.co.uk

SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

SPECIAL REPORT

Next Generation Anti-Counterfeit Mitigation Process Combatting Counterfeit Components

Contents

Counterfeiting Risk for Embedded Electronic Components Obsolescence Management: The Cost of Legacy Systems Testing, Testing…Which Test Works?

Foreword

2

Mary Dub, Editor

The Future and the Best Mitigation Strategies…

Combatting Counterfeit Components

3

Geoff Hill, Managing Director – Astute Electronics Ltd

A Danger to Security and Safety Deferring Obsolescence Increases the Risk of Counterfeit Alternatives Combating Counterfeiting Through Developing Standards Supply Chain 21st Century Published by Global Business Media

Published by Global Business Media Global Business Media Limited 62 The Street Ashtead Surrey KT21 1AT United Kingdom Switchboard: +44 (0)1737 850 939 Fax: +44 (0)1737 851 952 Email: info@globalbusinessmedia.org Website: www.globalbusinessmedia.org Publisher Kevin Bell Business Development Director Marie-Anne Brooks Editor Mary Dub Senior Project Manager Steve Banks Advertising Executives Michael McCarthy Abigail Coombes Production Manager Paul Davies For further information visit: www.globalbusinessmedia.org The opinions and views expressed in the editorial content in this publication are those of the authors alone and do not necessarily represent the views of any organisation with which they may be associated.

Material in advertisements and promotional features may be considered to represent the views of the advertisers and promoters. The views and opinions expressed in this publication do not necessarily express the views of the Publishers or the Editor. While every care has been taken in the preparation of this publication, neither the Publishers nor the Editor are responsible for such opinions and views or for any inaccuracies in the articles.

© 2012. The entire contents of this publication are protected by copyright. Full details are available from the Publishers. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying, recording or otherwise, without the prior permission of the copyright owner.

Counterfeiting Risk for Embedded Electronic Components

6

Mary Dub, Editor

Total Number of Individual Suspect Parts Exceeds a Million Highly Sophisticated Counterfeiters The Importance of Upscreening The Important Difference Between Class B and Class S Micro-Circuits

Obsolescence Management: The Cost of Legacy Systems

8

Don McBarnet, Staff Writer

So What is Obsolescence?

Why is Obsolescence Management so Important Now? Obsolescence – Sometimes a Product of Slow Acquisition and Long Delivery Times The Date Coding Minefield Rand Corporation Research into Managing United States Air Force Software Obsolescence

Testing, Testing…Which Test Works?

10

Meredith Llewellyn, Lead Contributor

The Importance of SC21 Replacing Obsolete or Counterfeit Parts that have Failed Software Obsolescence Problems The Legacy System Paradox: Maintaining Systems can Become Very Costly Indeed The Worrying Risk of Catastrophic Failure

The Future and the Best Mitigation Strategies…

12

Mary Dub, Editor

Armed Service Committee Recommended Mitigation Strategies The Role of Private Sector Organisations such as ERAI The Department of Defense Open Architecture Approach The Importance of Balance Between Pro-Active and Reactive Obsolescence Management Obsolescence Monitoring

References 14

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SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

Foreword T

his Special Report reveals a new and

the intricate complexity of electronic component

alarming global trend generated by the fast

obsolescence. This sometimes overlooked problem

growing global market in electronic components:

is the expensive Achilles heel in any austerity policy

counterfeiting. As this report documents, there is

that seeks to reduce upfront costs by retaining

growing evidence from sources as distinguished

legacy systems and maintaining them at high

as the United States Senate Armed Services

evels of readiness.

Committee, of an active and growing trade in highly

Trusted component suppliers who can test the

wrought electronic components that are hard to

capability and provenance of electronic components,

detect, yet potentially prone to fail unexpectedly.

become crucial in a market place where even testers

The first piece in this Special Report looks at how

of components can fail to test or fail to detect bogus

counterfeiting has diversified from designer goods

high quality parts. How and why they need to test is

to electronic components. An estimated 1 million

the subject of the fourth article.

Chinese electronic parts are in use in US military

The final piece, as always, looks to the future. In the

aircraft, which endanger national security and put

fast changing market place of the latest technology

the safety of US military personnel at risk. And the

software, even the short-term future is hard to

lengthening of life projections of existing platforms,

assess. The conclusions put forward by the Senate

due to budgetary constraints, has increased the risk

Armed Services Committee are useful guides to

of counterfeit alternatives. Among the steps taken to

procedure and an untrusting sceptical approach to

combat the counterfeit problem is the development

any electronic component is undoubtedly critical.

of Supply Chain 21st Century (SC21) – a programme

Never have the watchwords ‘caveat emptor’ seemed

involving key military and aerospace manufacturers,

more relevant.

to monitor and ensure quality control across all products and services.

The second article looks at the extent of the risk posed by counterfeiting and what it means to national security in the United States. The third piece unravels

Mary Dub Editor

Mary Dub has covered the defence field in the United States and the UK as a television broadcaster, journalist and conference manager.

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SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

Combatting Counterfeit Components Geoff Hill, Managing Director – Astute Electronics Ltd

Astute Electronics’ Lines of Defence in Next Generation Counterfeit Mitigation Process Definition: “Counterfeit parts are defined as a product produced or altered to resemble a product without authority of right to do so, with the intent to mislead or defraud by presenting the imitation as original or genuine”.

Source: AIA March 2011 Special Report – Counterfeit Parts: Increasing Awareness & Developing Countermeasures

W

e should all be aware today of how counterfeiting has progressed and diversified from designer goods to electronic components used in safety critical and security led applications.

By far the largest percentage of counterfeit originates from China and is reported to be worth billions of dollars and, as a result, large revenues have been reinvested in counterfeit techniques leading to counterfeit devices becoming harder to detect.

Sources of counterfeit components include the following: • Recycling of e-waste • Uncontrolled excess inventory •U nauthorized/untested regrading of current product • Rejected manufactured product

outlining the budget and expenditure of the US based Department of Defence (DOD). This latest provision outlines punishments of fines of up to $30m and up to life imprisonment. The major emphasis of the NDAA Section 818 is to enforce contractors to buy through authorized sources and not from the open market. The provision does recognise this is not always possible and sets a framework for the use of a non-traceable supply route. However, the common approach has been for the business type to infer traceability of the component supplied, and there is a common misconception that franchise distributors will always supply components received direct from the OCM.

A Danger to Security and Safety It was reported in a US Senate Report released in June 2012, that an estimated 1 million Chinese counterfeit electronic parts were in use in US military aircraft directly jeopardising national security and safety of American military personnel.

The year long and subsequent 73 page investigation “Inquiry into Counterfeit Electronic Parts in the Department of Defence Supply Chain” went on to list a number of examples where suspected counterfeit parts were found within operational equipment. The Airforce estimated that 84,000 counterfeit electronic parts from Hong Dark Electronic Trade, a company in Shenzen, China were installed on DOD aircraft.

Source: Herald Tribune May 2012 As a result of the severity of these statistics, the US Government have introduced a provision into the NDAA FY2012 (National Defence Authorization Act), which is a United States Federal law

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Astute Electronics’s Robust In-House AntiCounterfeit Programme is mirrored in the UK and US facilities

Deferring Obsolescence Increases the Risk of Counterfeit Alternatives According to the Department of Commerce in the report from the Office of Technology Evaluation in 2009: “It is not uncommon, however, for authorized distributors to purchase parts outside of the OCM supply chain in order to fulfil customer requirements – 57% purchase parts from other sources. Specifically, 47% of authorized distributors procure parts from independent

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SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

It was reported in a US Senate Report released in June 2012, that an estimated 1 million Chinese counterfeit electronic parts were in use in US military aircraft directly jeopardising national security and safety of American military personnel.

distributors, 29% procure from Brokers and 27% procure from Internet-based exclusive sources”.

Source: US Dept of Commerce, Office of Technology Evaluation, Counterfeit Electronics Survey Nov. 2009 In our experience, a strong counterfeit mitigation technique is to classify both the product and the supplier, determining by order that the material is traceable.

However, electronic component manufacturers, like any other industry, are demand-driven and historically this has led to vast component shortages resulting in long lead-times. Add to this, rapidly advancing technologies are resulting in continuous and increasing obsolescence challenges.

The period between introduction and obsolescence of commercial devices has contracted to between 5-7 years, whilst military and aerospace platform lifecycles are frequently being extended beyond their original end of life projections, in some cases to over 35 years.

Current global defence cuts will exacerbate the obsolescence issue by extended life projection of existing platforms increasing the risk of counterfeit escapes.

Two examples of this are the F15 primarily designed in 1967, and expected to be in service within the US Airforce past 2025; and the well known Eurofighter currently produced today, designed in the mid-80’s and had its first flight on 27th March 1994.

Combating Counterfeiting Through Developing Standards However much we desire for obsolescence, long lead times and high cost redesign to be a thing of the past, in the first instance these issues will continue to be countered by the procurement of non-traceable components. Therefore, in the real world, Industry must recognise that a robust test facility is paramount when supplying nontraceable product.

Astute Business Ideology Diagram:

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Part of the Astute Test Suite (UK & USA).

Destructive testing using Nisene Jet-Etch automated acid decapsulator for Destructive Physical Die analysis, linking with the Keyence Microscope to provide clear unambiguous images identifying the die codes and manufacturer information

Astute Electronics, being a key supplier active within the UK Defence industry and Government/Industry bodies, continues to invest a considerable amount of resource in combating counterfeit electronic components in both its UK and USA distribution facilities.

Standards are currently being developed by industry bodies such as SAE to help provide guidance and accreditation in counterfeit mitigation programmes covering all elements of the supply chain from sourcing to test facilities and subsequent reporting and disposition.

A baseline standard for companies operating within the Military/Aerospace supply chain is ISO9001/AS9120 Rev A which acts as the Quality Management framework for the creation of the following standards: AS5553A: Counterfeit Mitigation (End User) AS6081: Counterfeit Mitigation (Distribution) AS6171: Counterfeit Mitigation Test Methods (Test Laboratories) Our current test processes and equipment go beyond what is now being introduced as standard for AS6081: •L ow Powered Microscopy (10-200 x magnification)

SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

•H igh Powered Microscopy (50-3000 x magnification) • High Temperature Solvent Test (Dynasolve) • ED-XRF Spectrometry • X-Ray Inspection • Decapsulation • Scanning Electron Microscopy* • EDS (Energy Dispersive Spectrometry)* • Solderability (wetting balance)* • Programmable device validation* * not part of mandatory AS6081 requirement The Reduction of Risk and Development of a Quality-Led Culture is Fundamental.

With all this in mind, Astute are continuing to develop Franchise agreements primarily with manufacturers associated with the High Reliabilty and Defence sectors. One of these manufacturers being Linear Technology Corporation, a semi conductor manufacturer exceeding $1.5 billion revenue, has committed to never moving any of its components to obsolescence which was reiterated by Alastair Boyd, UK Country Manager of LTC at ES Live in May 2012.

By partnering with such manufacturers, Astute can help influence design engineers at the front end and hopefully reduce a percentage of obsolescence challenges in the future.

Astute Business Ideology Diagram: As we have shown in the diagram on the previous page, the next generation of anti-counterfeit mitigation process is achieved by having a holistic view of the supply chain and its influences. Logistic and Supply Chain excellence is crucial in the next generation of secure supply chain partnerships.

Supply Chain 21st Century Recognising the need for improvements within UK plc, the ADS Group have brought together key military and aerospace manufacturers for the development of SC21 (Supply Chain 21st Century). Astute Electronics was one of the first Distributors to be recognised for its excellence on entering the programme in 2009. The award was given to Astute Electronics, having been supported by 9 Prime contractors making up the Key Customer Working Group, for our work across the whole of the business activities “One of the UK’s globally competitive strengths is the strength of the UK defence supply chain and the deployment of the ADS SC21 programme to

in the real world, Industry must recognise that a robust test facility is paramount when supplying nontraceable product.

demonstrate world class performance. This is ensuring Quality control in our products and services” – Phil Curnock, Project Manager SC21, ADS. Multiple lines of defence, as shown above, can be provided by key strategic partners who facilitate through life support programmes.

In addition to the already mentioned mitigation methodologies, the attention is now turning to the OCM to employ counterfeit mitigation strategies at the component level during manufacture. Examples of this include, but are not limited to: •A pplied DNA Science SigNature DNA Marking on components classified using the DLA code FSC 5962 (it is expected other commodities will follow), •T he Hardware Intrinsic Security (HIS) derived from Physical Unclonable Functions (PUFs).

• The US DOD Trusted Foundry Program The counterfeit issue is here to stay, the cost to industry is vast and the danger to human life is real. All parties need to recognise the issues and work in partnership to overcome current and future challenges.

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Contact Geoff Hill, Managing Director – Astute Electronics Ltd www.astute.co.uk

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Counterfeiting Risk for Embedded Electronic Components Mary Dub, Editor “We do not want a $12 million missile defense interceptor’s reliability compromised by a $2 counterfeit part.” Gen. Patrick O’Reilly, Director, Missile Defence Agency, November 8 2011

One circuit malfunction from a counterfeit part can result in unexpected catastrophic failure of vital life-saving systems on which aircraft and ships rely.

“

T

he systems we rely on for National Security and the protection of our military men and women, depend on the performance and reliability of small incredibly sophisticated electronic components. Our fighter pilots rely on night vision systems, enabled by transistors the size of paper clips, to identify targets. Our soldiers and marines depend on radios and GPS devices and micro electronics that make them work, to stay in contact with their units and get advance warning of threats that may be round the corner. The failure of a single electronic part can leave a soldier, sailor or airman vulnerable at the worst possible time. Unfortunately, a flood of counterfeit parts has made it a lot harder to prevent that from happening”.1 This alarming statement in this years US Senate’s prestigious Armed Services Committee Report tells just part of the story. The ubiquity of embedded integrated circuits in almost every system, weapon, sensor, vehicle, aircraft or ship reveals the frightening vulnerability of the United States and Western European armed forces to the driving force of obsolescence as relatively recent, yet old in electronic terms, systems begin to fail because, although the circuit may be up-screened for military use, it is vulnerable to the inevitable aging and difficult replacement that commercial circuits are a prey to. Secondly, there is the powerful undercurrent of the counterfeiting industry which adds to the pressure on supply chain managers and logistics engineers, because the worrying presence of counterfeit components in the commercial and industrial supply chain is an ever present danger that is almost undetectable to even the most diligent testing regime. Yet, of course, one circuit malfunction from a counterfeit part can result in unexpected

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catastrophic failure of vital life-saving systems on which aircraft and ships rely.

Total Number of Individual Suspect Parts Exceeds a Million The Armed Services Committee Report estimated that the number of counterfeit parts feared to be in the United States national security systems could top one million. What does this mean in practice? The specialist researchers on the report identified a number of critical platforms that probably were at risk. For example, suspect counterfeit parts in the US Navy, SH-60B Helicopter Parts originating from a company called Huajie Electronics Ltd in Shenzen, China.

These components were sold on by several middlemen and were supplied by a prime contractor to the Air Force in ignorance of their true origin. The trail of platforms that may be affected is a long one: counterfeit parts were found in US Air Force C-130J and C-27J. L-3 had bought thousands of suspect counterfeit parts from Hong Dark in Shenzen, China. These parts were used on Boeing’s 737 which was used for military purposes. It resulted in the ice detection module failing because of suspect counterfeit parts. Even trusted suppliers brought in to test potentially suspect electronic components like Tandex Test Labs in California had, in reality, failed to test them and then sold them on to BAE for use in critical platforms.

Highly Sophisticated Counterfeiters “What keeps us up at night is the dynamic nature of the threat, because by the time we have figured out how to test for these counterfeits, they have figured out how to get around it,” says Vice-President of Supply Chain Operations at Raytheon.

SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

For the system and testing engineers this unknown level of risk of failure is worrying. There is no way to predict how long a counterfeit circuit that may have passed the testing regime, but still be imperfect, will last and result in unexplained catastrophic failure. As Samsung, the semi conductor manufacturer summarised the problem: even vetted and up-screened semi conductor components have limited useful lives and this difficulty is compounded by the risk of obsolescence and counterfeiting.

Further, there are marking issues. Clear marking allows a buyer to note performance grade, for example, military grade parts that are carefully designed to work over a wider temperature range than industrial or commercial grade. However, re-marked parts may pass on initial testing but fail in the field.

The Importance of Upscreening As is so often the case with products for military applications, the item needs to be ruggedized for extreme environments. This rule of thumb applies equally to electronic components and microcircuits. Here, the process is called upscreening. Some monolithic microcircuits, also called integrated circuits, are designed for use in a wide range of applications and environments. Some applications are very benign while other applications require careful selection of the proper type of device to ensure system reliability. Semiconductor devices are designed and manufactured for various environments ranging from desktop computers to manned space vehicles. Each environment has very different requirements that must be addressed in specifying the microcircuits used in that environment.2

Clear marking allows a buyer to note performance grade, for example, military grade parts that are carefully designed to work over a wider temperature range than industrial or commercial grade.

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The Important Difference Between Class B and Class S Micro-Circuits Historically, military applications have utilised ceramic packaged microcircuits assembled and screened to either Class Level B or Class Level S (Space Level) as defined by MIL-STD-883 Method 5004 with Quality Conformance Inspection performed in accordance with MIL-STD-883 Method 5005. If requirements for radiation-hardened performance are ignored, the differences between Class B and Class S microcircuits are screening and lot acceptance. Class B microcircuits are the recommended class for microcircuits used in normal and severe environments.3 And for safety, the correct class must be tested and used for failsafe performance of a weapons system.

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Obsolescence Management: The Cost of Legacy Systems Don McBarnet, Staff Writer

“Component technology development is almost exclusively focused on meeting the demands of the component manufacturers’ biggest customers in the consumer related markets, which need high component technology churn in order to develop the next generation of products…This means that the life expectancy of many components, many of which are also used in professional and industrial applications, has reduced dramatically.”4 Sir Ralph Robins, Chairman of Rolls-Royce plc. 1992-2003

If the product cannot be found at any price, there is the resultant challenge of reverse engineering the software for the obsolescent part to keep an aircraft flying or a weapon system tested and safe.

I

n the opening quotation, Sir Ralph Robins talks about the impact of obsolescence on the commercial and industrial market for aircraft and other products. It would be true to say that the phenomenon he is describing is equally if not more relevant in the military sphere, if the level of concern in the Department of Defense in the United States and the British Ministry of Defence is a useful guideline.

Part of Astute Electronics’ Test Suite (UK & USA)

So What is Obsolescence?

Inspection System – Non destructive testing in

Robins provides a useful starting point. In simple terms, it is the discontinuation or the recent and sometimes sudden unavailability of a component or item; this could be an integrated circuit for a jet engine control system, a piece of TFT (thin film transistor) glass for a cockpit display, or an “imperial” nut and bolt for an undercarriage.

Without the above, the engine, cockpit, or undercarriage will not be able to function.

Consequently, an item costing only a few pennies or cents can needlessly ground an aircraft costing many million of pounds or euros. As Robins sees it: the dichotomy facing senior managers and personnel is the balancing of financial and other resources between the implied cost, liability and adverse publicity from a grounded aircraft for instance, and the associated expenditure of reactive solutions, versus the expenditure to be budgeted for in proactively preventing the grounding from occurring in the first place.

Why is Obsolescence Management so Important Now? The reason why obsolescence is so important in the 21st century is that electronics continues to establish itself in an increasing number of applications as developing component 8 | www.defenceindustryreports.com

– Glenbrook Technologies Jewel Box 70T X-Ray the identification of broken wire bonds, lead frame form and die placement, identification of solder voids, clear identification and reporting of failures.

technology enables faster, more feature-laden and less power consuming products to be offered to a growing and increasingly voracious market, often at ever decreasing cost. But the power, size and dynamism of the non-military, commercial market has critical implications for the defence market. However, as the consumerrelated markets continue to grow exponentially, so the industrial, military and aerospace sectors’ relative importance to major component manufacturers has reduced, as global sales of components to those sectors has also reduced as a percentage of the total. The result is that the demand for components for military needs is a small and shrinking part of the global demand for electronic components. What is worse, this is happening at a time when many Western European armed forces are facing trenchant cuts in their equipment budgets and relying much more heavily on COTS (off the shelf) products to meet immediate needs. Further, legacy systems procured in the 70s and 80s

SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

with a 15-20 year life span are being expected to extend their operational life cycle. This creates a significant and expensive challenge to supply chain managers and logistics agencies that have to source the outdated and discontinued product. If the product cannot be found at any price, there is the resultant challenge of reverse engineering the software for the obsolescent part to keep an aircraft flying or a weapon system tested and safe. QinetiQ estimates that at least 22,000 different electronic component types are discontinued each year.

Obsolescence – Sometimes a Product of Slow Acquisition and Long Delivery Times The issue is further compounded frequently by the extended time it takes for a procured item or platform to move from first order, through development to delivery. Professional systems and equipment, by nature of their complexity, often have an extended time from concept to market and are expected to provide years, if not decades, of reliable service. However, their extended time to market and in-service life expectancy often means that many of the components designed into these systems and equipment can become obsolete even before the design stage has been completed, further increasing the time to market, often resulting in delayed deliveries to important customers.

The Date Coding Minefield With the extension of life of a legacy system comes renewed inspection and checking to establish whether it is sufficiently robust to continue safety in service.5 All electronic systems, be they commercial, military or professional, have reliability requirements, sometimes for the lifetime of the equipment or just to cover a guarantee period. The reliability of any system depends upon the “quality” of the design itself and also the suitability of every one of the components used within that system. Date coding is used as a method of checking and inspecting the potential life of an electronic component. Effective date coding is essential in order to aid the diagnostic process in the

event of equipment failure or unexpected short life. Date codes are also useful in establishing the age of a component before use and/or the approximate date when it was mounted in equipment – although this knowledge is often misused. Any component maker owns the date code that is applied to his/her product, and is able to design and code-in any information that is deemed to be applicable, usually applying this at a time corresponding to the final encapsulation process.

Rand Corporation Research into Managing United States Air Force Software Obsolescence The Rand Corporation researchers looked into the problems of the Air Force, who are particularly keenly hit by the issue of obsolescence.6 Why? “Nearly all the electronic and electrical components in Air Force aircraft and other equipment are tested and diagnosed using automatic test systems (ATSs), computer-controlled sets of instruments that generate inputs to the components, measure outputs, and identify problems. However, two related problems currently beset the Air Force’s test systems: increasing equipment and software obsolescence and the difficulty of managing the many specialized types of equipment.”

The Air Force’s ATSs are currently beset by increasing hardware and software obsolescence, which is compounded by the number and variety of legacy ATS types. In response to an overall Department of Defense policy, the Air Force is planning to modernize its component repair capabilities, re-hosting them on a much smaller number of modern common testing systems.

An example in the Rand analysis is the contrast between the Radar Electronic Warfare (REW) test station and the Depot Automated Test System for Avionics (DATSA). Both have very high sustainment costs (more than $2 million per year), but the DATSA repairs 350 UUTs (Units Under Test) while the REW repairs 22. Total estimated re-hosting costs would be $22 million for the REW but $111 million for the DATSA. The REW is therefore close to the point at which it would be cost-effective to re-host its entire workload over a ten-year period.

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Testing, Testing…

Which Test Works?

Meredith Llewellyn, Lead Contributor

“The sophistication of the counterfeiting is amazing to us. We’re finding you actually having to go down to the microns, to be able to figure out that it is a counterfeit.”

Raytheon, Vice-President of Supply Chain Operations (2012)7 “Counterfeiters are not dumb people. They know how to do counterfeiting. They know how counterfeiting is being detected. And they come up with ways of beating the detection system”. Thomas Sharpe head SMT Corp (2012)8

The best electronic component companies have many types of testing available and no doubt have one or two types of testing that they do not advertise too widely.

W

hether the problem for the Department of Defense or the British Ministry of Defence is one of fear of counterfeit components or need to replace counterfeits or obsolescence, the focus turns to the suppliers of electronic components and their capability to check their provenance and certify their capability. The best electronic component companies have many types of testing available and no doubt have one or two types of testing that they do not advertise too widely.

What does this involve? Quality of component testing can involve a multitude of penetrating tests. Non-destructive testing includes the use of energy-dispersive-X-ray-fluorescence analysis (ED-XRF) a type of X-ray spectrometer.9 X-Rays emitted from an X-Ray tube or radioisotope, excite the atoms in the sample material, which could be any solid, powder or liquid.

According to Astute, destructive testing sometimes involves using a Nisene jetetch automated acid decapsulator for destructive physical die analysis, linking with the Keyence microscope to provide clear unambiguous images identifying the die codes and manufacturer information.

Here the word decapsulator is used to describe the process of opening packs or layers of data.

Many test facilities like Asute have a rigorous and highly technical sequence of tests that can be applied to a component. And their skill and persistent effectiveness allows them to achieve trusted supplier status for the major prime contractors, like Thales, BAE systems, EADs, Cobham, Raytheon and Selex. Recognition for testing effectiveness is marked by accreditation to key industry bodies and meeting various industry standards, like AS9120.

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Global Quality Driven Distribution at Astute Electronics Ltd.

The Importance of SC21 SC21 (Supply Chains for the 21st Century) is a highly sought after award for excellence in the electronic component field. Managed by the ADS group and started in 2006 by the Society of British Aerospace Companies (SBAC) and its members, SC21 is a programme to improve performance across the UK aerospace industry.

Focused on small and medium sized businesses working within the aerospace, security, space and defence sector, the aim is to raise and maintain standards. The bronze, silver and gold awards are highly prized and the winners covet the accolade that the award brings. Suppliers and manufacturers that win these awards are among the elite in the global market.

Replacing Obsolete or Counterfeit Parts that have Failed Even trusted suppliers of electronic components cannot always source replacement or replica components for systems. Original manufacturers may have gone out of business or stopped producing the part without a stockpile. The complexity of these systems makes the task

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more difficult. For example, in aircraft testing equipment, when any part of a tester changes, the interfaces between different parts of the system become vulnerable. Languages, hardware, and communication protocols must all be compatible, and the specifics of each test in the TPS (Testing Procedure Specification) must be calibrated to the test instrumentation. As a result, updating either the component being tested or any part of the test equipment may require changes throughout the system.10

Software Obsolescence Problems TPS software has its own set of obsolescence problems. Many legacy test programs were written in older test languages, for example, the Abbreviated Test Language for All Systems (ATLAS), that are no longer widely supported.

Much code was written before modern standards for software development; many of the original programs are not modular, not well documented, and difficult to understand in general. In addition, the TPS software, and sometimes the language, is proprietary in many cases. Often, it has become expensive or impossible to continue to pay the original contractor for software updates, and it is extremely costly to reverse engineer the testing procedure without access to the original source code.

The Legacy System Paradox: Maintaining Systems can Become Very Costly Indeed The Rand study on the impact of obsolescence and the problem of modernizing and sourcing components gives the US Air Force as an example. Air Force weapon systems contain hundreds of electronics LRUs (line-replaceable units) and thousands of electronics SRUs. Estimates for rehosting TPSs on common core testers vary, but even an optimistic estimate of $500,000 per LRU and $150,000 per SRU (shop replaceable unit) would put the total cost of rehosting in the billions of dollars. The time involved is also daunting; it can take as long as one and a half years to rehost a single TPS

The obsolescence problem, complicated by the counterfeiting issue, makes vigilance for trusted component suppliers the first priority.

for a complex LRU. Finally, not all components need to be rehosted. There are plans to retire certain platforms in the near future, which would eliminate testing for many of their components.

The Worrying Risk of Catastrophic Failure While the risk of catastrophic failure through inadequate testing and therefore grounding of aircraft or weapon system is remote, it should not be dismissed. The obsolescence problem, complicated by the counterfeiting issue, makes vigilance for trusted component suppliers the first priority. Pro-active management and mitigation of the risk of failure is required for, if the number of UUTs is too large, timely rehosting might be unobtainable at any price because of the existing demands on programmers and other rehosting resources.

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Market Leaders in Counterfeit Avoidance

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SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

The Future and the Best Mitigation Strategies…

Mary Dub, Editor

The Senate Armed Services Committee, in its report earlier this year, drew a number of conclusions about its investigation of the problem of counterfeiting and what needed to be done.

O

nce the problems of obsolescence, counterfeiting and unethical suppliers of substandard components are acknowledged, the potential pathway forward can be mapped out. The Senate Armed Services Committee, in its report earlier this year, drew a number of conclusions about its investigation of the problem of counterfeiting and what needed to be done. By listing the key recommendations, it becomes clear how important trusted and vetted suppliers of the highest quality components are to both prime contractors and the United States, Department of Defense.

Their first conclusion is that it is clear to their researchers that China is the source of counterfeit components. What is worse, the Chinese government has done nothing to stop or control the trade in counterfeit items.

The researchers noted that public sidewalks in some cities in China were covered with electronic parts harvested from e-waste. This contrasts with the clean working environments of legitimate manufacturers producing high quality units. The Armed Services Committee notes that, in their view, the Pentagon still does not know how serious the problem is. Furthermore, as a result of the extent of counterfeiting, the Pentagon should not rely on unvetted distributors of electronic equipment.

They note that weaknesses in the testing and inspection regime of many testing companies are exploited by the counterfeiters. And finally, they are alarmed that the Department of Defense (DoD) routinely failed to report suspicion of counterfeiting. And while they noted the importance of trusted suppliers, when a part had become obsolete and was no longer supplied by trusted and vetted suppliers, the Pentagon had no choice but to resort to independent electronic component distributors.

Armed Service Committee Recommended Mitigation Strategies The Armed Services Committee recommended that the United States increase the level of inspections of electronic components imported 12 | www.defenceindustryreports.com

Astute Electronics’ ED-XRF Spectrometry – non destructive testing for: Pb IN Sn ALLOY ON LEAD FRAME, Pb IN Sn ALLOY FOR BGA RoHS PLASTICS ANALYSIS, Pb IN Sn for SMD CERAMIc

into the United States. However, the counterfeit and sub standard components pass through so many hands that even a tough inspection regime may fail to identify them. Additionally, the Armed Services Committee advised the Department of Defense to seek assistance from the private sector as to whether a part is suspect. They also emphasised again the role of trusted suppliers.

And finally, they made the point that reporting all findings of counterfeit parts is also a useful tactic.

The Role of Private Sector Organisations such as ERAI As the Senate Committee recommended, the private sector has become more active in monitoring, investigating and reporting issues that are affecting the global supply chain of electronic components. Since 1995, ERAI has been the industry’s primary reporting and investigation service, providing information and risk mitigation solutions. ERAI provides a high-risk parts database for counterfeit, substandard and highrisk parts. There is also a searchable database of high-risk suppliers and customers and a means of material/assembly cross checking against high-risk parts database, with vendor analysis tools and information.

The Department of Defense Open Architecture Approach In the early 1990s, the United States made it policy to acquire all ATE (Acquisition and Tracking Electronics) hardware and software from designated ‘families’ and to design new

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testers as open systems. The intention was for each ATS to be able to test as many different components from as many different weapon systems as possible and thus to end up with the smallest feasible set of interoperable ATS families.

Current Pentagon ATS policy directs the services to develop a small number of ATS families. Each family is to be interoperable with commercial instruments and communications buses, support a variety of weapon system requirements through flexible hardware and software architectures, and be expandable and customizable without requiring basic architectural changes.

The unethical nature of the global market for electronic components makes it vital for the safety

The Importance of Balance Between Pro-Active and Reactive Obsolescence Management

of western and other

The issues around obsolescence and counterfeiting are not unique to the United States. Britain, along with other European states, has been suffering from similar problems. First, in the United Kingdom, the Defence Logistics support chain manual recognises the problem, which is important. It says that at some point in the equipment life cycle, anticipating and dealing with the problem will be considerably cheaper than waiting until later in the life cycle when a major redesign may be required, which threatens program availability11. Through actively managing obsolescence, an upfront ‘cost avoidance’ policy may be required. They accept, however, that no strategy can be fully proactive and there will always be an element of reactivity as a result of sudden changes in the threat, new capability requirements and the technology sector market forces. Striking the right balance in favour of cost avoidance and pro-activity versus reactivity will always be a hard call.

armed forces to use the most rigorous methods possible to ensure that only high quality electronic components

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are used in military and defence equipment.

Obsolescence Monitoring As the first step towards obsolescence management, the manual calls for active monitoring and reporting of the issue. This obviously echoes the moves in the United States to step up and increase monitoring and reporting of not only obsolescence issues, but also counterfeiting.

American network centric warfare and the British network enabled warfare depend on the use of the latest sensors, advances in communications and appropriate weaponry to deliver the operational dominance of airspace required in modern warfare. As austerity demands that legacy systems are kept in readiness, and that platforms commissioned decades ago are well maintained, the issues of testing and maintaining

all their embedded electronic systems will continue to be a challenging and dynamic task.

The unethical nature of the global market for electronic components makes it vital for the safety of western and other armed forces to use the most rigorous methods possible to ensure that only high quality electronic components are used in military and defence equipment. This means that money invested in new testing and inspection regimes by electronic suppliers is a valuable and resourceful step in providing a countervailing balance to those seeking to profit from unethical sales practices.

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SPECIAL REPORT: NEXT GENERATION ANTI-COUNTERFEIT MITIGATION PROCESS

References: 1

112TH CONGRESS SENATE REPORT 2nd Session INQUIRY INTO COUNTERFEIT ELECTRONIC PARTS IN THE DEPARTMENT OF DEFENSE SUPPLY CHAIN R E PO R T of the COMMITTEE ON ARMED SERVICES UNITED STATES SENATE, MAY 21, 2012 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON DC USA: 2012 Upscreening of Class B Microcircuits for Space Applications S Richard Biddle Texas Instruments Incorporated

2

Military Semiconductor Products Division PO Box 60448 M/S 3016 Midland Texas 79711-0448 http://www.navsea.navy.mil/nswc/crane/sd18/Pages/Microcircuits/Microcircuit%20Part%20Assessment.aspx

3

The Obsolescence Minefield A Guide for Senior Executives By Sir Ralph Robins 4

5

6

The Component Obsolescence Group http://www.cog.org.uk/PDF/booklets/Date%20Coding%20Minefield%20Issue%201%20Sept%202003%20(sample).pdf Methodology for Constructing a Modernization Roadmap for Air Force Automatic Test Systems Lionel A. Galway, Rachel Rue, James M. Masters, Ben D. Van Roo, Manuel Carrillo, Amy L. Maletic, John G. Drew - Copyright 2012 RAND Corporation 112TH CONGRESS SENATE REPORT 2nd Session

INQUIRY INTO COUNTERFEIT ELECTRONIC PARTS IN THE DEPARTMENT OF DEFENSE SUPPLY CHAIN

R E PO R T of the COMMITTEE ON ARMED SERVICES UNITED STATES SENATE

MAY 21, 2012 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, DC: 2012

7

112TH CONGRESS SENATE REPORT 2nd Session

INQUIRY INTO COUNTERFEIT ELECTRONIC PARTS IN THE DEPARTMENT OF DEFENSE SUPPLY CHAIN

R E PO R T of the COMMITTEE ON ARMED SERVICES UNITED STATES SENATE

MAY 21, 2012 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, DC: 2012

8

http://www.spectro.com/pages/e/p0105wp01.htm

9

Methodology for Constructing a Modernization Roadmap for Air Force Automatic Test Systems

10

Lionel A. Galway, Rachel Rue, James M. Masters, Ben D. Van Roo, Manuel Carrillo, Amy L. Maletic, John G. Drew - Copyright 2012 RAND Corporation http://www.mod.uk/NR/rdonlyres/514A0DD0-822F-4F6C-82AD-12954CB044DB/0/JSP886_Vol7_Pt813_OM_v30.pdf

JSP 886 THE DEFENCE LOGISTICS SUPPORT CHAIN MANUAL VOLUME 7 INTEGRATED LOGISTICS SUPPORT PART 8.13 OBSOLESCENCE

MANAGEMENT 11 Jan 2010

14 | www.defenceindustryreports.com

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