Components Shortage: Should I Use A Broker?

Desperate times are driving people to desperate measures. Unprecedented long lead times on SMT parts, components, and materials are driving more and more companies into considering using component brokers and independent distributors for out of stock, hard to find parts. If you are reading this, you may already be aware of the relative risk that using a broker or independent distributor entails. You may be wondering if it is worth that risk to keep your supply chain chugging along. The short answer is…it depends. In this article we’ll discuss our thoughts on using brokers and whether it is a valid choice for you and your company.

The Importance of Parts Counterfeit Prevention

Your product and your design’s reliability are some of if not the most crucial parts of your business. With a faulty or unreliable PCB Assembly, your supply chain schedule will be botched, you won’t make enough sales, and your reputation could be tarnished. Even worse than that, if your circuit board operates in a military, aerospace, or medical setting, a product failure could lead to major injuries and damage. With the increasing frequency of counterfeit parts in the marketplace, EVERYONE needs to be aware of how to avoid, mitigate, and prevent possible exposure to counterfeit components.

Anti-Counterfeit Policy

To avoid purchasing unapproved, suspect, or counterfeit parts, Vinatronic suggests it’s customers only buy components from Original Component Manufacturers (OCM), Original Equipment Manufacturers (OEM), Authorized Franchised Distributors, and Authorized After-Market Manufacturers. Doing so will drastically decrease risk levels of procured parts. If available, getting a Certificate of Conformance and test documentation from the original manufacturer are great records to have. If your company does not have one, I’d suggest putting together an approved supplier list for your purchasing and engineering team. Ours has been created over years and years of validation. Our suppliers are selected utilizing several different criteria, including inspection procedures for counterfeit detection. Possible criteria used to assess suppliers and their compliance for counterfeit avoidance may include ISO 9001 Certification, AS9100 Certification, AS5553 compliance (Counterfeit Electrical, Electronic, and Electromechanical (EEE) Parts; Avoidance, Detection, Mitigation, and Disposition), and AS6081 compliance (Fraudulent/Counterfeit electronic parts: avoidance, detection, and disposition).

What is a Component Broker

“Broker” is a bit of a catch all term but in general it refers to an independent supplier with no ties to the original manufacturer. They generally either resell parts, refurbish parts, or secure obsolete, out of stock, and end-of-life parts. Since they’re not authorized suppliers, you can never be 100% sure of the quality of the parts you get from them. They all contain varying levels of risk. These companies sometimes have their own stock but more often they have a network of vendors they pull stock from. In general, we don’t use brokers and advise our customers to do the same. In our case and business, the risk is almost never worth the reward. If a special circumstance exists and our customer does request it though, we have several trusted contacts that we can reach out to. These brokers have been used by our team and we can vouch for them. Although the risk buying from brokers can never be eliminated, utilizing vetted brokers decreases the risk of counterfeit and faulty parts. In circumstances like the current component shortage, brokers sometimes can’t be avoided. We’ve seen customers request to use them when they are the only way to source out of stock components, especially older end of life (EOL) parts. If you do choose to go with a broker for a component, there are several things you can look out for to decrease your risks.

Things to Look Out For

  • Source other than manufacturer or authorized sources
  • From suspect locations (e.g., China)
  • Variation from expected price (Too low or too good to be true)
  • Out of stock parts are all of a sudden available
  • Chain of ownership unverifiable
  • No Date Code
  • No CoC (certificate of conformance)
  • Obsolete items
  • Unknown supplier/No references
  • Different looking parts in lot
  • Markings do not match spec sheets or other parts
  • Alterations or resurfacing
  • Incomplete markings
  • Wrong size
  • Damaged or seemingly used parts
  • Quality difference in components

Counterfeit Mitigation

When using a broker or independent distributor it is always essential to make sure that the parts you are receiving are correct and reliable. This can be done through a combination of visual inspection, x-ray inspection, and testing. If parts are found to be suspect, they must be quarantined immediately.

Should You Use Brokers?

Like previously stated, it depends. Utilizing a broker for your parts will always carry risks and understanding those risks will help you and your company better understand whether it is the right choice for you. Vinatronic has a vetted list of brokers that it has curated over years of business. If you are looking for a component for your PCBA, feel free to reach out to us and we’ll put you in contact with our vendors. As always, we’d love to help with your PCB assembly and electronics manufacturing needs. Reach out to our team.

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