The supernatural supply chain - it's a SCARY place!

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A few months ago, I blogged about zombies in the supply chain. Now, it turns out, Zombies aren’t your only problem. Now you need to worry about ghosts!

I heard about this issue on TWIT (This week in Tech – a technology podcast). I followed up and found this story from the LA Times. The LA Times story is based on a post in Bunnie Huang’s personal blog. It goes something like this... Bunnie Huang, Founder of Chumby Industries was called in to look at a quality problem with one of his products, the Chumby one - a handheld digital device. It turns out that the memory card being used in the product failed the quality tests.

The failing memory cards were all Kingston branded and all from a single batch. When Bunnie tried to exchange the cards from that batch, Kingston refused because the memory cards had already been programmed. Not to be dissuaded, Bunnie did some detailed (and I mean DETAILED – check out Bunnie’s post to see the extents he went to) investigation and was able to determine that the defective cards were very likely produced on the same machines as the certified Kingston memory.

This led Bunnie to believe that the Micro SD cards he had been sold had been run in a “ghost shift”. A ghost shift is where a rogue worker walks into the factory after hours and runs off a couple hundred units of a product without the knowledge or consent of the factory. Further, there is no quality control checks made on the finished product, and the products are often made with rejected materials.

When presented with this evidence, Kingston decided to exchange Bunnie’s defective chips with new ones. This raises issues for both component buyers, and for component suppliers; For component buyers, the source of your supply is as important as the brand of your supply. There have been numerous stories outlining the risk and impact of counterfeit components.

Similarly, we need to be aware of the risk of supplies that aren’t really counterfeit – they are actually produced in the same factory, on the same machines, but are not certified by the brand owner. In Bunnie’s case, he was very lucky that the QA process caught the bad parts before they went out to his customers. This won’t always happen.

The flaws may well show up weeks or months after the customers get their hands on the products. Depending on the nature of the flaws, the impact could be anywhere from an inconvenience, to a full blown disaster (a-la Toyota).

When buying components, make sure that your supply source is a reputable dealer. You may end up paying a bit more, but you have a better chance of getting what you paid for.

For component manufacturers, make sure your equipment is being used only to run those components you have authorized. How many customers would have had the perseverance and technical where-with-all to do the analysis that Bunnie did. Most would have chalked up the bad chips to poor quality on behalf of the manufacturer – in this case Kingston – after all, the chips were Kingston branded – right?

Companies such as Kingston that have (and deserve) a stellar quality reputation can see that market perception erode if branded rogue products start entering the market.

Do you have a similar story to tell? Have you run into counterfeit products? Respond back and let us know.

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