Open Market Sourcing Begins and Ends with Quality

As companies work to keep production moving in the midst of shortages, more industries are approaching the open market to source their electronic components. This route has become a necessary part of any resilient supply chain strategy. The global chip shortage, however, has led to increased counterfeiting activity and an influx of fake chips in the market.

When the supply is not adequate to the demand, it is a golden opportunity for bad actors to profit from customers' plight. While there is a degree of risk in the open market, there are ways to confidently leverage this sourcing channel to secure your supply chain and prevent line-down situations.

Reputable independent distributors make substantial investments in their quality management programs to protect customers from counterfeit components. Industries like aerospace and defense, medical, and automotive require elevated levels of testing and inspection to ensure authentic parts, and reliable sources offer these enhanced services. Through advanced testing equipment, inspector expertise, and ongoing education, independent distributors are the first line of defense against preventing substandard parts from entering the supply chain despite the growing threat.

Increasingly sophisticated counterfeits are evading detection at a rapid pace in the electronic components industry. According to ERAI, there was a ten percent increase in counterfeit reports from 2020 to 2021. However, it is also important to note that counterfeit reporting is voluntary, so these numbers may not paint the full picture of the challenge. Despite being optional, it is critical to report counterfeits to put an end to this ongoing dilemma. While counterfeits are a genuine threat in the open market, legitimate independent distributors are committed to their quality control processes to eliminate risk and promote a positive outcome for all involved.

When approaching the open market or assessing independent distributors, remember the importance of quality to your supply chain. Without a certified provider, you’re at risk of significant consequences including decreased product reliability, malfunction, premature failure, injury, product recall, reputation damage, and monetary loss. Because of this, evaluating independent distributors requires thoughtful consideration of your business’s needs. Gain confidence in the source of the parts by preparing a list of requirements to evaluate independent distributors, guaranteeing they satisfy your needs. When looking to enter the open market, the following considerations are vital. As a connected distributor, VADAS prioritizes each of the pillars below.

Supplier management: Ensure your distributor sources from approved, verified suppliers. At VADAS, we conduct thorough research and pre-qualify suppliers to confirm all products are procured from reputable sources.

Inspection and testing: The components you need should meet your requirements in a timely manner. We maintain industry quality certifications and our team members hold top credentials in their field and participate in ongoing training and development. VADAS thoroughly inspects each product and its packaging to confirm authenticity. Thorough testing is well worth the investment and time it takes to prevent a costly mistake.

Certified component quality engineers: Highly trained and experienced quality inspectors should perform testing services. VADAS is one of the few independent distributors to employ component quality engineers specialized in counterfeit awareness, detection, inspection, and customer-specific processes.

Value-added services: Look for a reputable independent distributor who can provide customized services. Our testing services span from custom counterfeit detection to solderability testing, DC/AC functionality, and more.

As the only public open market distributor, VADAS is equipped with an advanced quality management program. Our quality program establishes checks and measures to protect customers against substandard and suspect parts, ensuring reliable procurement and authentic components that our customers can trust to meet their production schedule.

Open market sources can create greater visibility in the supply chain, resulting in a more resilient supply chain. By prioritizing quality in each step of the sourcing process, partnering with independent distributors can help you mitigate risks and achieve your unique business goals. Additionally, remaining vigilant and taking the necessary precautions helps reduce the prevalence of counterfeits and improve the security of the market. Work with a trusted partner, like VADAS, to solve the future.