Dear Readers of the Tesat-Spacecom Parts Agency Newsletter,

please find below our latest Newsletter with news and insights into our way of working.

One focus of this edition is the topic of counterfeit EEE parts. Dr. Daniela Staerk of the EEE-Center explains how our customers benefit from the various methods Tesat-Spacecom puts in place to prevent counterfeit parts. Our implemented EEE supply model and long-term experience with handling EEE parts, Product Chance Notice (PCN) and Obsolescence Notice (ON) is the second subject this edition sets a focus on.

As in previous years the Tesat Parts Agency and EEE-Centre have a booth and are contributing with presentations to the Space Tech Expo in Bremen and the MEWS in Japan.
We would be pleased to see you there.

For any questions, for your feedback or topics you wish to be addressed in the next newsletter please contact Dr. Frederik Küchen.

E-Mail: This email address is being protected from spambots. You need JavaScript enabled to view it. Phone: +49 (0) 7191 - 930 - 2414

Tesat-Spacecom: With end-to-end processes against counterfeit components

The topic of counterfeit semiconductors and other faked high-tech components has become increasingly explosive in today's world and the latest technical developments. Just recently the European Anti-fraud Office (OLAF helps partners seize over one million counterfeit semiconductors in major Joint Customs Operation, 03.07.17) and international media reported about a century coup of European customs surveys and the securing of millions of counterfeit semiconductors.

As a high-technology company and a recipient as well as a distributor of such components, we see ourselves in a special obligation to obtain position: a short interview with Dr. Daniela Staerk, Head of EEE Parts Engineering and Radiation in the EEE Center.

Dr. Staerk, are we as Tesat-Spacecom affected in any way by these developments?

For our classic Hi-Rel EEE components, I can give an all-clear because of our very limited "end-to-end" process for the supply chain. We only procure from original manufacturers or franchised distributors! In the case of the current customs investigation there are components, which have been imported into the EU mainly through postal services or express couriers from dubious sources.
Furthermore, our network is very closely interlinked with suppliers both in the procurement and quality and engineering processes. In the complete process, a very high degree of transparency as well as traceability to the semiconductor wafer and the semiconductor factory are ensured and verified by our incoming goods inspection.

What exactly are counterfeit components?

Basically, all what is covered by the term “suspect counterfeit”, which means that the procurement process cannot entirely be traced back. For this reason it should be absolutely avoided to procure at brokers, who in many cases hardly know themselves who they received the goods from; and this is often not the direct manufacturer, but again another broker, mostly from China or Hong Kong.

On the obvious side a component becomes a counterfeit, if a direct proof can be provided. For this purpose, there are several starting points, such as, fake logos, counterfeit papers, wafer or electronic material from the so-called "gray market" (components declared to be unsuitable and still circulated) or an imitation chip.

Where do you see the reason for the counterfeiting problem on the market?

A main driver for the problem is the Obsolescence, which describes the discontinuation of components, although their needs have not yet been covered by the market. Especially in such emergency situations, one can quickly be tempted to leave the standard supply chain in order to get to the valuable components and to avoid a costly re-design.

Particularly more complex components or integrated semiconductors are expensive and scrap materials can easily be beautified and re-branded. In some countries there is a downright industry of recycling electronic waste. At first sight it is not always visible, whether a component has already been installed and operated for a long time, or not.

In any case of suspicion and action outside the standard supply chain, an enhanced incoming goods process with e.g. Additional analyzes and lifetime tests should be carried out to minimize the risk.

Are there any predictions for the future to deal with this problem?

Unfortunately, the number of new GIDEP (Government-Industry Data Exchange Program) alerts to counterfeit components per year has risen further in recent years. Due to the increased use of COTS (commercial-off-the-shelf) components in NewSpace and at low-cost projects, I see a rising risk due to the accompanying increased pressure on price and delivery time. At the same time, the customary transparency and traceability, which we expect from Hi-Rel suppliers, decreases. This makes it all the more important to ensure a clean supply chain process and sufficient quality and reliability tests before the defective parts are installed and cause major damage.

Thank you very much Dr. Staerk.

Benefit from our PCN/ON Management Expertise

Process Change Notice or Product Change Notice (PCN) and Obsolescence Notice (ON) are unavoidable in the EEE community. Some PCN’s and ON’s have caused serious negative impact on business for equipment manufacturers, especially in space business. Tesat has decades of experience in PCN and ON management as equipment manufacturer for risks mitigation and also benefits from the Airbus group EEE community input to obsolescence or product change information.

As Parts Agency, we actively employ this competence to mitigate the risk of PCN’s and ON’s on our customers´ business.

Our PCN/ON process managed by a PCN Management Board facilitates gathering of PCN’s and ON’s, identification of concerned components and their traceability within our organization. The board then classifies the PCN/ON as either major or minor and assesses the possible impact of every PCN and ON and communicates all relevant stakeholders, mostly the final part users, giving them some recommendations. The final part users perform an extensive assessment and put measures in place to mitigate the risk of any concerned PCN/ON.

As Parts Agency, we do not only wish to procure parts for you, but also to support you in mitigating the risk of product change by EEE manufacturers and also the risk of obsolete parts. For more details on how we can make this work for you, please feel free to contact us.

EEE Supply Models for your needs

Many customers expressed dissatisfaction about late delivery of EEE parts, which they procure. A significant part of these delays arise on the side of manufacturers usually for some reasons beyond their control. In an effort to avoid this and ensure parts availability at the right time, some of our customers have resorted to buying much larger quantities of some components than they actually need for existing projects.

We have taken this market demand and customers‘ feedback into consideration and have put in place our EEE Supply Model to help our customers avoid these problems. This model (depicted below) is applicable to all EEE parts procured in reasonably large quantities. It has been tested for several years in our transnational procurement organization and it has proven to be effective.

We place open orders at the EEE manufacturer as requested by our customer. The open orders cover parts in production and those in the manufacturer’s buffer stock (see diagram). Parts are regularly delivered from the manufacturer’s buffer stock to TESAT at a rate equivalent to our customer‘s need. Parts are delivered by manufacturer after completion of all inspections, however, specific inspections shall be done at TESAT to fulfill our customer’s requirements. The buffer stock at the manufacturer is maintained such that the needs of our customer for a defined period are covered.

Our EEE Supply Model ensures that our customer gets his EEE parts just in time, he pays only for the parts delivered, thereby avoiding delays and improving his cash situation. On the other hand, our EEE manufacturer can do better planning for his business and this helps us avoid delays. We invite you to discuss details of this supply model with us, so that we can work out an optimum arrangement for your needs.

MEWS30 – The 30th Microelectronic Workshop

From 18th to 19th of October 2017 the Japan Aerospace Exploration Agency JAXA invites participants and key players of the Japanese and also International space market to their 30th Microelectronics Workshop MEWS at Tsukuba International Congress Center in Japan.

The Tesat-Spacecom Parts Agency will participate and contribute to the conference, dealing the topic of this year’s MEWS “Space Microelectronics for Next Decade”.

You will find more information and also preliminary program here.

Space Tech Expo Europe

The Space Tech Expo Europe, which is a B2B Space Engineering event for aerospace and related industry will take place from 24th to 26th of October 2017 in Bremen, Germany. The whole European Space community is invited to participate in order to be informed about relevant matters of Space industry, to meet existing business partners and to make new contacts.

Also experts of Tesat Parts Agency and Airbus Defence and Space EEE centre will contribute with the following presentations:

“How to do business with …” – Panel Session
Dr. Martin Veith, Head of EEE Centre

Aimed at start-ups and Small and Medium-sized Enterprises (SMEs), this panel session highlights what they are looking for in the European supply chain, and will allow you to ask questions to professionals heading up their procurement and supply chain teams.

“Using Parts Agency Services to industrialize Space-equipment manufacturing”
Dr. Frederik Kuechen, Head of Parts Agency

The need to further industrialize space-equipment manufacturing is a fact. Shortages and quality issues of EEE parts regularly block the value stream and drive up costs. An intelligent supply chain, volume-based procurement, EEE parts engineering and warehousing services can overcome these constraints and reduce costs and risk.

We are looking forward meeting you there!
Register now here for free EXPO-Pass

Dates

• 18. - 19. October 2017
  MEWS30, Tsukuba International Conference Centre, Japan
• 24. - 26. October 2017
  Space Tech Expo Europe, Bremen, Germany
• 14. - 17. November 2017
  SEMICON Europa, Munich, Germany

Yours Tesat Parts Agency