Counterfeit Parts: Dangerous and Costly

Is your site putting personnel safety at risk and fueling downtime with the repair parts it buys? 

By Wally Wilson, CMRP, CPIM, Life Cycle Engineering (LCE)

Counterfeits show up in all areas of our daily lives, from name-brand clothing and accessories to electrical components and repair parts for industrial maintenance. According to the United States Chamber of Commerce (uschamber.com, Washington), counterfeit goods cost the American economy more than $400 billion annually. While items such as fake Rolex watches and fashion knock-offs may not pose a danger to the user, they’ll typically lack the level of performance genuine products would provide. Counterfeit maintenance, repair, and operational (MRO) spare parts, however, can create a serious hazard for equipment systems and facilities, and, most important, the personnel that work with and around them.

The bad news is your operations could be buying and using counterfeit parts and not know it. Counterfeits (or fakes) can look so much like original parts in their packaging, graphics, and engraved identification markings, that it’s nearly impossible to distinguish them from the real thing. The increasing flow of fake, after-market bearings from China and other Asian countries is a good example of this dangerous supply-chain situation. These items continue to create enormous headaches for major bearing manufacturers such as SKF, NSK, and Timken, among others. Many imported counterfeit bearings even come with phony certificates proclaiming that the items were manufactured in the USA and meet specified standards for American-made products.

The main source for counterfeit parts is the Internet, including websites such as eBay and Amazon. This is the first stop for many maintenance planners, given the difficulties in finding what may be categorized as “obsolete” parts for older equipment. Not buying parts on the Internet isn’t the solution, though. Fakes have also infiltrated the supply chain of some of the most trusted distributors.

Alas, maintenance and procurement managers often view the counterfeiting threat as a minor concern. When a bearing fails in a pump or small motor, there’s usually no safety risk, and the collateral damage can be minimal. When it comes to equipment failures in larger components, such as compressors, large-drive motors, and other major process equipment, counterfeits reflect a definite risk of injury to personnel, including operators and maintenance technicians. Sadly, increasing quantities of large-sized counterfeit bearings are said to be showing up on equipment in a wide range of today’s industrial operations.

Distinguishing ‘real’ from fake

The drive to reduce maintenance cost and equipment downtime will sometimes cause buyers who are sourcing parts for equipment repairs to engage suppliers that sell these items at low prices. The cost-reduction pressure has opened the door for the entry of substandard parts into the MRO supply chain and, ultimately, too many plant storerooms. The result is a seemingly neverending, vicious cycle. Installed on equipment, the counterfeits deliver shorter-than-expected service life, emergency calls to address equipment failures increase, and the culture of a maintenance department becomes (or remains) reactive.

In most cases, original replacement parts, if they are installed correctly and maintained properly, will perform longer and better than counterfeits. Reliability engineers and maintenance planners should be tracking the service life of all installed components and parts. Take, for example, a motor bearing with an expected service life of 60 months that’s only lasting 30 months or less. The equipment’s maintenance history can be a clue that you’re using substandard parts.

Other aspects to track or monitor in determining if counterfeits are being used include MTBR (mean time between repair) or MTBF (mean time between failure). Many organizations are implementing RCM (reliability-centered maintenance) programs to manage their production equipment. The problem, in many cases, is that they’re not using the data from these analyses to create valid strategies to address the root cause of their equipment failures, which might be associated with counterfeits.

Risk/Reward 101: Gambling on unknown suppliers can be a dangerous, often very costly game. Certifying a primary supplier provides the most effective preventive measures for ensuring that spare parts are genuine and will perform as expected.

The results of a root-cause analysis could also be an indicator that additional training is required. Alignment, lubrication, and preventive monitoring are areas that should have standard procedures to ensure the equipment is installed, operated, monitored, and maintained the same way by all of the maintenance technicians, which is crucial in combating counterfeits.

Monitoring the TCO (total cost of ownership) of equipment is also helpful. It can provide a business-case justification for upgrading to new technology or modifying current equipment to eliminate the need to embark on a treasure hunt for obsolete parts every time the need arises.

Note: In the case of bearings, whenever there’s an indication that a failed component is a counterfeit, legitimate suppliers can conduct an analysis to determine the cause of the failure and validate the part as original or counterfeit.

Reducing counterfeit risks

Don’t be complacent. If you understand the health of your equipment and you have trusted/certified suppliers, the risk of getting counterfeit parts is greatly reduced. Plant personnel, however, still must remain vigilant. Consider purchasers at a major aircraft manufacturer who thought they were buying name-brand ball bearings produced by a trusted American manufacturer, only to learn differently. The sub-standard imported products, i.e., fakes, were discovered during a positive material identification (PMI) inspection during the storeroom receiving process and a potential catastrophe was avoided.

The earlier in the MRO supply chain that counterfeit parts can be identified, the lower the risk the parts will get into your storeroom and production equipment.

Certifying a primary supplier for needed spare parts provides the most effective preventive measures for assuring that procured parts are genuine and will perform as expected. Keep in mind that we make suppliers reactive when we don’t properly maintain equipment.

In summary

When you understand the health of your equipment, it is much easier to implement a proactive maintenance program that reduces reliance on Internet and excessive expedited purchases. Being able to plan and schedule equipment downtime for repairs allows your suppliers to be true partners in your MRO supply chain. We expect our trusted suppliers to solve our problems and get parts to us quickly. If, for some reason, they can’t, sites may put their operations at risk by gambling on unknown sources. In the end, that can be a dangerous, very costly game.

It’s important for maintenance departments to never let their guards down.

Stay alert. Among other things, monitor equipment-repair histories and key performance indicators. Check your spare-parts inventory to make sure you don’t already have counterfeits in your storeroom, and that your procurement processes aren’t opening the door to new ones. Finally, always remember this: Deals that seem too good to be true can come back to haunt you. MT

Wally Wilson is a senior subject-matter expert in materials management and work management, planning, and scheduling with Life Cycle Engineering (LCE.com), Charleston, SC. He can be contacted at wwilson@LCE.com.