Network Product Solutions, a veteran-owned start-up specializing in building social ecosystems empowering users to solve complex challenges, has launched the Trusted Global Buyers Network (TGBN). Unlike a part inventory aggregation engine or internet trading platform, TGBN harnesses the power of social media and online community for the first time in this industry to match buyers to member-rated sources of supply.
By the time a buyer reaches TGBN, they have most likely exhausted their own network of authorized channels and have little choice but to turn to the multi-billion dollar grey market. This market is comprised of both reputable and disreputable independent distributors and brokers.
"Today, buyers purchase parts from independent distributors primarily when they cannot find inventory at authorized sources,"said Ed Odette, founder and president of NPS. "TGBN offers buyers and engineers the ability to collaborate and share their experiences with suppliers by rating them based on their quality, compliance controls, trustworthiness, and warranty."
TGBN uses the knowledge and power of buyers worldwide - also known as crowdsourcing - to make transparent the good, the bad, and the ugly of the supply chain. TGBN members can engage with other members on forums to help make well-informed sourcing decisions, rate and review suppliers, and access and share best practices and resources. Powered by the IHS CAPS Universe electronic component database, the TGBN Dashboard offers members the opportunity to purchase inexpensive but critical part information on a part-by-part basis that can help them proactively mitigate risk.
"The technology has been there to mitigate false availability problems; the willpower has been missing," said John Becker, former Special Assistant to the Deputy Undersecretary of Defense (DUSD) for Logistics & Material Readiness (L&MR). "TGBN's approach opens up new ways to mitigate the problem."
The Grey-Market Elephant in the Room
Product obsolescence and end-of-life poses a serious problem for engineers and one that has contributed to a dramatic increase in counterfeiting. A part used by an engineer in their design today has, on average, three years before it is out of production. With an estimated 500,000 components going obsolete each year, buyers and engineers can't always get the parts from their normal sources. Of the over $300 billion semiconductor market alone, the grey market furnishes five to 10 percent of that. By not acknowledging the necessity of the grey market, manufacturers have left buyers to their own devices when determining what suppliers in the grey market they can trust.
The China Syndrome
Recycling e-waste, while an environmentally and socially responsible process, further contributes to the counterfeit problem. Of the nearly 50 million metric tons of e-waste generated worldwide, 70 percent ends up in China where it is often picked apart, re-marked, and sold as new.
A New Solution to the Problem
Knowledge of and access to tools to mitigate counterfeit risk and address obsolescence are not always readily available to small- and medium-sized business, in particular. Best practices, standards, and important oversight organizations such as SAE, IDEA, and GIDEP are all valuable resources for buyers. While decades of risk mitigation strategies have added some transparency to the situation, current efforts struggle to keep up with the dramatic rise in counterfeiting and increased sophistication of counterfeiters.
By offering a social networking platform for buyers and engineers to collaborate, the TGBN online community presents a unique and new approach in the fight against counterfeit electronic components.
PDF
