News | Sept. 19, 2016

Operations personnel use new partnership to protect supply chains, prevent counterfeits

By Dianne Ryder

For more than a decade, an increase in counterfeit and suspected counterfeit spare parts has challenged Defense Logistics Agency’s quality-control and technical personnel. But DLA’s recent partnership with the National Intellectual Property Rights Coordination Center has improved DLA’s detection methods and increased the range of parts DLA can test for authenticity.

“DLA applies a multi-pronged approach to try to mitigate counterfeits,” said Art Beauchamp, program manager for counterfeit mitigation in DLA’s Logistics Operations directorate. “And we come at that from a lot of different angles; product testing, quality audits of vendors and supply-chain risk assessment are just a few.” 

Beauchamp said the IPR Center, part of the Department of Homeland Security, focuses on preventing the theft of U.S. intellectual property rights.

In 2012, an operational evaluation team analyzed the problem in DLA supply chains and issued recommendations. 

One recommendation was to deploy a group of DLA headquarters employees to DLA’s distribution centers to prevent an influx of counterfeit items. In 2013, the agency hired four test coordinators to staff DLA’s distribution centers: two in Susquehanna, Pennsylvania, one in Red River, Texas, and one in San Joaquin, California.

“They can’t do laboratory-type tests, but they can do first class-type testing”, according to Doug Fosnaught, a technical quality analyst in DLA Logistics Operations. “Visual inspections cover overall appearance and condition, workmanship and paint or coating finish. Typical dimensional characteristics would include length, width, diameter, thread pitch and style.  Marking inspections would confirm drawing specific marking requirements.” 

The test coordinators inspect items such as such as wheeled / tracked vehicle parts, surface vessel and submarine parts, aircraft frame and engine parts, auxiliary support equipment parts, electrical connectors and wiring harnesses. Although they aren’t permitted to power up electrical items, they can measure electrical resistance and continuity and can measure direct-current voltage for batteries.

“The term ‘counterfeit’ is more of a legal term. The test coordinators are helping us in terms of reducing non-conforming or suspect materials,” Beauchamp said. “They might identify a suspect counterfeit now, but it might not be for two or three years that the legal community says it’s a counterfeit. The test coordinators are trained to determine ‘high-risk candidates’ for counterfeit, although their actual job is to identify non-conforming or suspect items,” he said.

The high-risk procurement program determines which items are most subject to counterfeiting by using information from reports on product quality deficiencies, previous test data and external information the coordinators receive.

“Then we develop a list of national stock numbers that we give out to the test coordinators for them to inspect,” Fosnaught said.

The test coordinators inspect for quality deficiencies, examine items that are suspect or require verification and support the Counterfeit Material/ Unauthorized Product Substitution team. 

“The CM/UPS team is a group of subject matter experts from all different areas,” Beauchamp said. “Each primary level field activity has a fraud group — usually led by the fraud attorney — and they confirm what the test coordinators originally identified.”

Fosnaught said test coordinators can inspect a lot of the products with tools and technical drawings they have on hand.

“But if there are no drawings available, then all we have is the part itself,” he said. “We buy a lot of those parts, so one of the ways we try to get some relief and assurance is using Operation Chain Reaction to help us contact manufacturers.” 

Operation Chain Reaction is a comprehensive initiative that targets counterfeit items entering the supply chains of the Department of Defense and other government agencies.

The test coordinators photograph suspect or nonconforming items and send them to IPR Center personnel, who then forward the photos to the original manufacturers for identification. From the photos, the manufacturers can often determine whether the item is theirs or not.

“It’s not 100-percent foolproof, but it is some assurance that they’ve made the item,” Fosnaught said. “Sometimes these manufacturers have techniques or special markings that they’ve built into the actual product that only they know about.” “For the items we don’t have the technical data for — we don’t have the characteristics, the drawings or anything to tell us that, ‘hey, this thing is supposed to be 10 inches,’ or ‘hey, this thing is supposed to have a gold finish to it,’ — we can only see what we can see.”

If the manufacturer is unsure a product is its own, the test coordinators can pursue further testing or look at traceability documentation.

“We’ve expanded their tool kit by tapping into the IPR Center to combat counterfeits,” Beauchamp said.

With more than 5 million items in stock, Beauchamp said not every single item can be inspected, but HRP has helped narrow down suspect products and reduced the number of nonconforming items. “The coordinators identify the most vulnerable items out there — [those] vulnerable to counterfeiting,” he said.

To date, the test coordinators have been performing inspections as part of a pilot program.

“But we’re trying to expand it into a fully supportable program, because we see the advantage of working with the test coordinators,” Fosnaught said.