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64 SMT Magazine • January 2016 The word "counterfeit" encompasses a wide range of activities that are happening continu- ously in an "underground" SMT supply chain. The risks and potential effects resulting from the use of counterfeit materials can be huge, threatening human life, as well as the success of any company in the electronics industry. Word on the street is that the occurrence of counter- feit materials is growing rapidly, which means, at some point, a critical mass will be reached. The best managers and engineers among us must surely realize that now is the time to get proactive on this issue before a serious compel- ling event occurs. Let's play detective and in- vestigate this dark side of manufacturing to try and find out what exactly can be done. The classic plot of any detective story is the task of discovering the motive, means, and op- portunity for the crime. In business, the motive is focused on the financial aspects of materials supply. After all, materials generally are 80–90% of the cost of a finished product. As manufac- turing costs decrease, the material costs become more significant. For example, shaving a cent or two off the cost of material in each product can be significant when scaled up to the level of materials used in high-volume consumer prod- ucts. At the other end of the scale, many indi- vidual materials have a high enough value to be a target for counterfeiting even when used in lower volumes. As well as the physical properties of the materials, test and qualification processes add value to a material, differentiating it from oth- erwise identical materials. In critical applica- tions, materials that have not been through prescribed testing or have not been handled in an approved way are disqualified from use. by Michael Ford MEnTor grApHicS VAlor DiViSion THE ESSEnTIaL PIOnEEr'S SurVIVaL GuIDE Lost in the System: How Traceability can Solve the Problem of Counterfeit Materials ColuMn