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07 June 2018

Stamping out unauthorised parts from the aerospace supply chain

By Greig Duncan 

“A chain is only as strong as its weakest link” - supplier quality is at the absolute forefront of risk and quality assurance, this is particularly evident within high-consequence industries such as aerospace and defence.

There have been a number of recent victims of shortfalls in supply chain quality, including the Kobe Steel falsification of product quality data - which impacted aerospace and defence organisations, this has led to an increased focus on this business-critical area. Kobe’s products including thousands of tons of aluminium and copper strips did not meet agreed specifications. 

Modern defence weapon systems are fundamentally reliant on microelectronic devices and embedded systems for their operation. Any threat to the integrity of these components can result in significant harm to operations, people and systems.

The aerospace sector is one of the most highly-regulated industries, nonetheless, counterfeit parts are still creeping their way into the supply chain. Aside from the security and safety risks associated with including fake electronic components in military hardware, it has been estimated that a single incident stemming from a counterfeit part can cause up to 64 weeks of production line downtime and cost up to $2.1m to resolve.

Late last year, US aerospace supplier United Technologies Corporation (UTC) spent $1.06m to settle claims a subsidiary company sold counterfeit helicopter engine parts to the US Army.

The case centred on a Chinese electronics business that UTC came to indirectly own after its purchase of aircraft components maker Goodrich Corp in July 2012. The operation came to light when the Pentagon investigated a military helicopter crash in 2011, which killed two servicemen. The investigation revealed that the computer chips in the engine were fake, although they had not contributed to the crash. United Technologies co-operated with the government investigation and did not admit wrongdoing as part of the settlement. This was an example of a domino-effect where supply chain quality has impacted an OEM (Original Equipment Manufacturer) via a distributor.

Quality management and first article inspection software offer a robust method of control, although there is still a responsibility on companies to make sure that their company culture is driven by quality – both internally and within their procurement practices.

The aerospace industry looks set to find more innovative methods of identifying and ensuring approved parts are used in equipment. The University of Lancaster has created authentication tag technology, where unique atomic-scale IDs could be used in a range of sectors, including aerospace parts. Whilst, Battelle was awarded two fresh R&D contracts with the US Department of Defense to help keep fake electronics out of the military supply chain. The $23m in funding was awarded under the Microelectronics and Embedded Systems Assurance (MESA) scheme and will be used for research projects.

In 2010 and 2011 the DoD said it had identified upwards of a million counterfeit components in the military supply chain, while a report from market research firm IHS published in 2013 indicated there had been more than 12 million reports of counterfeit electronic parts in the prior five years. In 2016 the DoD published new rules– the Defense Federal Acquisition Regulation Supplement (DFARS) – to strengthen the process for acquiring electronic parts and to help prevent counterfeits ending up in military systems.

As Brexit continues to cause market uncertainty, this instability could have a knock-on effect in terms of rumours of manufacturers stockpiling supply chain parts to ensure smooth operations and increased cost pressures, which can also have an adverse impact on quality.

The implementation of AS9001 Rev D is on the horizon and this standard looks set to revamp the approach to supply chain quality in aerospace and defence. Request a demonstration of Q-Pulse to learn how Ideagen can help your organisation comply with this new standard.  You can also read more in our blog on AS9100 Rev D.

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