IEC TS 62668-2:2014

IEC TS 62668-2 ®
Edition 1.0 2014-07
TECHNICAL
SPECIFICATION
colour
inside
Process management for avionics – Counterfeit prevention –
Part 2: Managing electronic components from non-franchised sources

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IEC TS 62668-2 ®
Edition 1.0 2014-07
TECHNICAL
SPECIFICATION
colour
inside
Process management for avionics – Counterfeit prevention –

Part 2: Managing electronic components from non-franchised sources

INTERNATIONAL
ELECTROTECHNICAL
COMMISSION
PRICE CODE
W
ICS 03.100.50; 31.020; 49.060 ISBN 978-2-8322-1680-4

– 2 – IEC TS 62668-2:2014 © IEC 2014
CONTENTS
FOREWORD . 4
1 Scope . 6
2 Normative references . 6
3 Terms, definitions and abbreviations . 6
3.1 Terms and definitions . 6
3.2 Abbreviations . 11
4 Technical requirement . 11
4.1 General . 11
4.2 Overview. 12
4.3 Risks associated with purchasing from non-franchised distributors . 13
4.3.1 General . 13
4.3.2 Risk origin . 13
4.3.3 Quality risks. 13
4.3.4 Industrial risks . 14
4.3.5 Reliability risks . 14
4.3.6 Financial risks . 14
4.3.7 Legal risk . 15
4.4 Reasons to initialize the derogation process . 15
4.4.1 General . 15
4.4.2 Obsolescence notice failure . 15
4.4.3 Allocation . 15
4.4.4 Insufficient end-of-life inventory . 15
4.4.5 Late orders . 15
4.4.6 Minimum order quantity . 15
4.4.7 Technical requirements . 16
4.5 Derogation process . 16
4.5.1 Notification to the OEM . 16
4.5.2 Analysis of alternative solutions . 18
4.5.3 List of approved non-franchised distributors. 19
4.5.4 Non-franchised distributor consultation . 19
4.5.5 Risk analysis . 20
4.5.6 Non-franchised distributor order authorization . 23
4.5.7 Order processing . 23
4.5.8 Incoming processing . 23
4.5.9 Records . 27
4.5.10 Processing during storage and manufacturing . 27
Annex A (informative) Flowchart of IEC TS 62668-1 requirements . 28
Annex B (informative) Example of detailed tests list, linked with procurement risks
levels . 30
Annex C (informative) iNEMI counterfeit calculator tools . 35
Bibliography . 36

Figure 1 – Suspect components perimeter . 12
Figure 2 – Derogation process when supplying from non-franchised distribution . 17
Figure 3 – Potential avionics supply chain scenarios . 18

Table 1 – Typical procurement risk scenarios and guidance for procurement risk
assessment . 20
Table 2 – Typical testing . 25
Table B.1 − Example of detailed revalidation testing of suspect stock . 30

– 4 – IEC TS 62668-2:2014 © IEC 2014
INTERNATIONAL ELECTROTECHNICAL COMMISSION
____________
PROCESS MANAGEMENT FOR AVIONICS –
COUNTERFEIT PREVENTION –
Part 2: Managing electronic components
from non-franchised sources
FOREWORD
1) The International Electrotechnical Commission (IEC) is a worldwide organization for standardization comprising
all national electrotechnical committees (IEC National Committees). The object of IEC is to promote
international co-operation on all questions concerning standardization in the electrical and electronic fields. To
this end and in addition to other activities, IEC publishes International Standards, Technical Specifications,
Technical Reports, Publicly Available Specifications (PAS) and Guides (hereafter referred to as “IEC
Publication(s)”). Their preparation is entrusted to technical committees; any IEC National Committee interested
in the subject dealt with may participate in this preparatory work. International, governmental and non-
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with the International Organization for Standardization (ISO) in accordance with conditions determined by
agreement between the two organizations.
2) The formal decisions or agreements of IEC on technical matters express, as nearly as possible, an international
consensus of opinion on the relevant subjects since each technical committee has representation from all
interested IEC National Committees.
3) IEC Publications have the form of recommendations for international use and are accepted by IEC National
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4) In order to promote international uniformity, IEC National Committees undertake to apply IEC Publications
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5) IEC itself does not provide any attestation of conformity. Independent certification bodies provide conformity
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6) All users should ensure that they have the latest edition of this publication.
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8) Attention is drawn to the Normative references cited in this publication. Use of the referenced publications is
indispensable for the correct application of this publication.
9) Attention is drawn to the possibility that some of the elements of this IEC Publication may be the subject of
patent rights. IEC shall not be held responsible for identifying any or all such patent rights.
The main task of IEC technical committees is to prepare International Standards. In
exceptional circumstances, a technical committee may propose the publication of a technical
specification when:
• The required support cannot be obtained for the publication of an International Standard,
despite repeated efforts, or
• The subject is still under technical development or where, for any other reason, there is
the future but no immediate possibility of an agreement on an International Standard.
Technical specifications are subject to review within three years of publication to decide
whether they can be transformed into International Standards.

IEC/TS 62668-2, which is a technical specification, has been prepared by IEC technical
committee 107: Process management for avionics.
IEC/TS 62668-2 adapts and modifies the GIFAS 5052/2008 document that has served as a
basis for the elaboration of this technical specification.
This technical specification is to be used in conjunction with IEC/TS 62239-1 and
IEC/TS 62688-1.
The text of this technical specification is based on the following documents:
Enquiry draft Report on voting
107/228/DTS 107/236/RVC
Full information on the voting for the approval of this technical specification can be found in
the report on voting indicated in the above table.
This publication has been drafted in accordance with the ISO/IEC Directives, Part 2.
A list of all the parts in the IEC 62668 series, published under the general title Process
management for avionics – Counterfeit prevention, can be found on the IEC website.
The committee has decided that the contents of this publication will remain unchanged until
the stability date indicated on the IEC web site under "http://webstore.iec.ch" in the data
related to the specific publication. At this date, the publication will be
• transformed into an International standard,
• reconfirmed,
• withdrawn,
• replaced by a revised edition, or
• amended.
A bilingual version of this publication may be issued at a later date.

IMPORTANT – The 'colour inside' logo on the cover page of this publication indicates
that it contains colours which are considered to be useful for the correct
understanding of its contents. Users should therefore print this document using a
colour printer.
– 6 – IEC TS 62668-2:2014 © IEC 2014
PROCESS MANAGEMENT FOR AVIONICS –
COUNTERFEIT PREVENTION –
Part 2: Managing electronic components
from non-franchised sources
1 Scope
The avionics industry has a responsibility to ensure that all flight equipment produced has a
predicted product life which correlates to the predicted repair and service life to ensure the
public is not endangered. Typically an OEM calculates a mean time between failure (MTBF)
and possibly a mean time to failure (MTTF) prediction. These calculations assume all
components are new, or considered as “unused”, at the point of introduction into flight use
and that no useful component life and/or any “unsafe” component conditions have been used.
This part of IEC 62668, which is a technical specification, defines requirements for avoiding
the use of counterfeit, recycled and fraudulent components when these components are
purchased outside of franchised distributor networks for use in the aerospace, defence and
high performance (ADHP) industries. This practice is used, as derogation, only when there are
no reasonable or practical alternatives.
Although developed for the ADHP industry, this document may be used by other high-
performance and high-reliability industries, at their discretion.
2 Normative references
The following documents, in whole or in part, are normatively referenced in this document and
are indispensable for its application. For dated references, only the edition cited applies. For
undated references, the latest edition of the referenced document (including any
amendments) applies.
IEC TS 62239-1, Process management for avionics – Management plan – Part 1: Preparation
and maintenance of an electronic components management plan
IEC TS 62668-1:2014, Process management for avionics – Counterfeit prevention – Part 1:
Avoiding the use of counterfeit, fraudulent and recycled electronic components
AS/EN/JISQ 9100, Quality Management Systems – Requirements for Aviation, Space and
Defense Organizations
AS/EN/JISQ 9120, Quality Management Systems – Requirements for Aviation, Space and
Defense Distributors
3 Terms, definitions and abbreviations
3.1 Terms and definitions
For the purposes of this document, the following terms, definitions and abbreviations apply.

3.1.1
aftermarket source
reseller which may or may not be under contract with the original component manufacturer
(OCM) or is sometimes a component “re-manufacturer”, under contract with the OCM
Note 1 to entry: The reseller accumulates inventories of encapsulated or non-encapsulated components (wafer
and/or die) whose end of life date has been published by the OCM. These components are then resold at a profit to
fill a need within the market for components that have become obsolete.
[SOURCE: IEC TS 62668-1:2014, 3.1.1]
3.1.2
broker
individual or corporate organization that serves as an intermediary between buyer and seller
Note 1 to entry: In the electronic component sector a broker specifically seeks to supply obsolete or hard to find
components in order to turn a profit. To do so it may accumulate an inventory of components considered to be of
strategic value or may rely on inventories accumulated by another. The broker operates within a worldwide
component exchange network.
[SOURCE: IEC TS 62668-1:2014, 3.1.2]
3.1.3
COTS
commercial off-the-shelf products
one or more pieces, mechanical or electrical, developed for multiple commercial consumers,
whose design and/or configuration is controlled by the supplier’s specification or industry
standard
Note 1 to entry: They can include electronic components, subassemblies, or top level assemblies. COTS
subassemblies include circuit card assemblies, power supplies, hard drives, and memory modules. Top-level COTS
assemblies include a fully integrated rack of equipment such as raid arrays, file servers to individual switches,
routers, personal computers, or similar equipment.
[SOURCE: IEC TS 62668-1:2014, 3.1.3]
3.1.4
counterfeit, verb
action of simulating, reproducing or modifying a material, good or its packaging without
authorization
Note 1 to entry: It is the practice of producing products which are imitations or are fake goods or services. This
activity infringes the intellectual property rights of the original manufacturer and is an illegal act. Counterfeiting
generally relates to willful trademark infringement.
[SOURCE: IEC TS 62668-1:2014, 3.1.4]
3.1.5
counterfeited component
material good imitating or copying an authentic material, good which may be covered by the
protection of one or more registered or confidential intellectual property rights
Note 1 to entry: A counterfeited component is one whose identity or pedigree has been altered or misrepresented
by its supplier.
Identity = original manufacturer, part number, date code, lot number, testing, inspection, documentation or warranty
etc.
Pedigree = origin, ownership history, storage, handling, physical condition, previous use etc.
[SOURCE: IEC TS 62668-1:2014, 3.1.5]
3.1.6
customer device specification
device specification written by a user and agreed by the supplier

– 8 – IEC TS 62668-2:2014 © IEC 2014
[SOURCE: IEC/TS 62668-1:2014, 3.1.6]
3.1.7
customer
user
original equipment manufacturer (OEM) which purchases electronic components, including
integrated circuits and/or semiconductor devices compliant with this technical specification,
and uses them to design, produce, and maintain systems
[SOURCE: IEC TS 62668-1:2014, 3.1.7]
3.1.8
data sheet
document prepared by the manufacturer that describes the electrical, mechanical, and
environmental characteristics of the component
[SOURCE: IEC TS 62668-1:2014, 3.1.8]
3.1.9
franchised distributor or agent
individual or corporate organisation that is legally independent from the franchiser (in this
case the electronic component manufacturer or OCM) and agrees under contract to distribute
products using the franchiser’s name and sales network
Note 1 to entry: Distribution activities are carried out in accordance with standards set and controlled by the
franchiser. Shipments against orders placed can be dispatched either direct from the OCM or the franchised
distributor or agent. In other words, the franchised distributor enters into contractual agreements with one or more
electronic component manufacturers to distribute and sell the said components. Distribution agreements may be
stipulated according to the following criteria: geographical area, type of clientele (avionics for example), maximum
manufacturing lot size. Components sourced through this route are protected by the OCM’s warranty and supplied
with full traceability.
[SOURCE: IEC TS 62668-1:2014, 3.1.9]
3.1.10
fraudulent component
electronic component produced or distributed either in violation of regional or local law or
regulation, or with the intent to deceive the customer
Note 1 to entry: This includes but is not limited to the following which are examples of components which are
fraudulently sold as new ones to a customer:
(1) a stolen component;
(2) a component scrapped by the original component manufacturer (OCM) or by any user;
(3) a recycled component, becomes a fraudulent recycled component ,when it is a disassembled component
resold as a new component (see Figure 1), where typically there is evidence of prior use and rework (e.g.
solder, re-plating or lead re-attachment activity) on the component package terminations;
(4) a counterfeit component, a copy, an imitation, a full or partial substitute of brands;
(5) fraudulent designs, models , patents, software or copyright sold as being new and authentic, For example:
a component whose production and distribution are not controlled by the original manufacturer;
(6) unlicensed copies of a design;
(7) a disguised component (remarking of the original manufacturer’s name, reference date/code or other
identifiers etc.),which may be a counterfeit component; see Figure 1;
(8) a component without an internal silicon die or with a substituted silicon die which is not the original
manufacturer’s silicon die.
[SOURCE: IEC TS 62668-1:2014, 3.1.10]

3.1.11
microcircuit
component
device
electrical or electronic device that is not subject to disassembly without destruction or
impairment of design use and is a small circuit having a high equivalent circuit element
density which is considered as a single part composed of interconnected elements on or
within a single substrate to perform an electronic circuit function
Note 1 to entry: This excludes printed wiring boards / printed circuit boards, circuit card assemblies and modules
composed exclusively of discrete electronic components).
[SOURCE: IEC TS 62668-1:2014, 3.1.11]
3.1.12
non-franchised distributor
companies which do not fall under a franchised distributor or OCM
Note 1 to entry: Tthese distributors may purchase components from component manufacturers, franchised
distributors, or through other supply channels (open markets). These distributors cannot always provide the
guarantees and support provided by the franchised distributor network; components sourced through this source
are usually protected by the source’s warranty only. However, some of them are able to purchase traceable
components and/or to provide traceability paperwork and/or are able to return stock for investigation to the OCM.
[SOURCE: IEC TS 62668-1:2014, 3.1.12]
3.1.13
OCM
original component manufacturer
company specifying and manufacturing the electronic component
[SOURCE: IEC TS 62668-1:2014, 3.1.13]
3.1.14
OEM
original equipment manufacturer
manufacturer which defines the electronic subassembly that includes the electronic
components or defines the components used in an assembly and/or test specification
[SOURCE: IEC TS 62668-1:2014, 3.1.14]
3.1.15
piracy
willful copyright infringement
[SOURCE: IEC TS 62668-1:2014, 3.1.15]
3.1.16
purchasing agency
organization which groups the quantities of electronic components required by a series of
companies in order to constitute significant buying power and thereby obtain the best possible
supplier conditions for purchasing (especially as regards pricing and purchasing conditions)
as well as for assistance with management, documentation , financing etc.
3.1.17
reseller
general supplier which offers a selection of electronic components to order from a catalogue
[SOURCE: IEC TS 62668-1:2014, 3.1.16]

– 10 – IEC TS 62668-2:2014 © IEC 2014
3.1.18
recycled component
electrical component removed from its original product or assembly and available for reuse
Note 1 to entry: The component has authentic logos, trademarks and markings. However, it typically has no
output to measure the useful life remaining for its reuse. A recycled component can fail earlier than a new one
when re-assembled into another product or assembly. A recycled component may also be physically or ESD
damaged during the removal process.
[SOURCE: IEC TS 62668-1:2014, 3.1.17]
3.1.19
semiconductor
electronic component in which the characteristic distinguishing electronic conduction takes
place within a semiconductor
Note 1 to entry: This includes semiconductor diodes which are semiconductor devices having two terminals and
exhibiting a nonlinear voltage-current characteristic and transistors which are active semiconductor devices
capable of providing power amplification and having three or more terminals.
[SOURCE: IEC TS 62668-1:2014, 3.1.18]
3.1.20
subcontractor
manufacturer of electronic subassemblies, supplier manufacturingitems in compliance with
customer design data pack and drawings, and under the authority of the OEM
Note 1 to entry: This supplier may potentially procure all or part of the electronic components required to produce
a sub assembly and is often referred to as the contract electronic manufacturer (CEM) or electronics manufacturing
services (EMS).
[SOURCE: IEC TS 62668-1:2014, 3.1.19]
3.1.21
supplier
company which provides to another an electronic component which is identified by the logo or
name marked on the device
Note 1 to entry: A supplier can be an OCM, a franchised distributor or agent, a non-franchised distributor, broker,
reseller, OEM, CEM, and EMS etc.
[SOURCE: IEC TS 62668-1:2014, 3.1.20]
3.1.22
suspect component
electronic component which has lost supply chain traceability back to the original
manufacturer and which may have been misrepresented by the supplier or manufacturer and
may meet the definition of fraudulent or counterfeit component
Note 1 to entry: Suspect components may include but are not limited to:
(1) counterfeit components;
(2) recycled components coming from uncontrolled recycling operations carried outside of the OEM, franchised
network and OEM business where typically it has been fraudulently sold to the OEM as being in a new
unused condition.
[SOURCE: IEC TS 62668-1:2014, 3.1.21]
3.1.23
traceability
ability to have for an electronic component its full trace back to the original component
manufacturer
Note 1 to entry: This traceability means that every supplier in the supply chain is prepared to legally declare in
writing that they know and can identify their source of supply, which goes back to the original manufacturer and
can confirm that the electronic components are brand new and were handled with appropriate handling precautions
including ESD and MSL. This authenticates the electronic components being supplied are unused, brand new
components with no ESD, MSL or other damage. This ensures that the electronic components are protected by
any manufacturer’s warranties, have all of their useful life remaining and function according to the manufacturer’s
published data sheet, exhibiting the expected component life in the application for the OEM’s reliability predictions
and product warranty.
[SOURCE: IEC TS 62668-1:2014, 3.1.22]
3.1.24
untraceable
property of electronic components which have lost their traceability (see 3.1.23)
[SOURCE: IEC TS 62668-1:2014, 3.1.23]
3.2 Abbreviations
ACTF Semiconductor Industries Association Anti Counterfeit Task Force
ADHP aerospace, defence and high performance
COTS commercial off-the-shelf
CEM contract electronic manufacturer
CSAM C-mode scanning acoustic microscopy
DSCC Defence Supply Centre Columbus (see http://www.dscc.dla.mil/), now known as
DLA
DLA Defense Logistics Agency
EMS electronics manufacturing services
ERAI Electronic Reseller Association International (see http://www.erai.com)
ESD electrostatic discharges
G-19 SAE Counterfeit Electronic Parts Committee
GIDEP Government-Industry Data Exchange Program
GIFAS Groupement des Industries Françaises Aéronautiques et Spatiales (French
Aerospace Association)
HTRB high temperature reverse bias
IDEA Independent Distributors of Electronics Association
LTB last time buy
LDC lot date code
MSL moisture sensitivity level
OCM original component manufacturer
OEM original equipment manufacturer
RECS Reliable Electronic Component Supplier
SEM scanning electron microscopy
UKEA UK Electronics Alliance
4 Technical requirement
4.1 General
IEC TS 62668-1 minimises counterfeiting, recycling and fraudulent activities by providing
guidelines and requirements for maintaining intellectual property and recommends purchasing
traceable components from the OCMs or their franchised distributors (see Annex A). IEC TS
62668-1 references this part of the IEC 62668 series when purchasing components outside of

– 12 – IEC TS 62668-2:2014 © IEC 2014
the franchised distributor network in order to avoid and manage suspect components (see
3.1.22 for the definition of “suspect component” and Figure 1).
IEC
Figure 1 – Suspect components perimeter
4.2 Overview
OEM companies have numerous sourcing channels available to procure components for their
equipment. It is the original equipment manufacturer’s (OEM) responsibility to ensure that its
electronic component procurement process is robust.
The original equipment manufacturer, or subcontractor, which includes Purchasing Agents
acting on its behalf, which places orders for these components shall order directly from a
component manufacturer, the manufacturer representative or its franchised distributor. This is
the only supply system that can guarantee component compliance with specifications and
component origin (see IEC TS 62668-1).
Under exceptional circumstances, and after having exhausted all options within the franchised
system, the OEM may decide to purchase components through a non-franchised distribution
network. Purchasing through non-franchised channels is considered a derogation process for
which the OEM is fully responsible.
The OEM is responsible for ensuring that its products do not include counterfeit components.
Moreover, it guarantees that the reliability of its equipment is not affected when this
equipment includes components purchased from non-franchised sources.
The OEM shall have anti-counterfeit management plans in place, to comply with
IEC TS 62668-1.
Subclauses 4.3 to 4.5.10 apply to OEMs and their subcontractors when purchasing
components from sources of supply other than from the OCM or from franchised distributors.
However, there are the following exclusions to this specification:
1) In situations where Purchasing Agents are under contract to the OEMs to order
components on their behalf, the Purchasing Agent is considered to be ‘the OEM’ and is
not considered to be a non-franchised distributor.

2) In situations where an approved logistics supply agency, for example the DLA in the USA,
supplies components for logistics purposes to a national defence customer and associated
OEMs, the approved logistics supply agency is not considered to be a non-franchised
distributor.
4.3 Risks associated with purchasing from non-franchised distributors
4.3.1 General
There are the following risks to consider (see 4.3.2 to 4.3.7).
Various risk assessment tools exist which the OEM may consider when assessing risks; for
example, iNEMI provided three counterfeit calculator tools (see Annex C).
4.3.2 Risk origin
Counterfeit and fraudulent products have been repeatedly identified by electronic equipment
manufacturers. Purchasing, using and reselling fraudulent components is illegal. A major
difficulty lies in recognizing these fraudulent components, as electronic components may be
counterfeited in many ways. Increased market demand encourages this illicit activity and
counterfeiters continue to improve their manufacturing processes, disguise and falsification
methods. Electronic equipment manufacturers shall consequently take increasingly strict
measures to mitigate risk. The equipment manufacturer shall take all necessary measures,
both internally and with regard to its chosen supplier, to ensure that components acquired are
OCM (original component manufacturer) produced that they have not been modified,
remarked, or previously installed in applications, nor undergone testing that might impact their
performance or reliability.
Fraud and specifically counterfeiting of electronic components has most often been detected
with components supplied by brokers. Therefore, the information that follows in this document
will refer essentially to this type of supplier which cannot generally supply traceability back to
the OCM. The electronic equipment manufacturer should remember, however, to use caution
when purchasing from any source outside of a franchised network.
4.3.3 Quality risks
4.3.3.1 General
Quality risks include the following.
4.3.3.2 Lots
There is a high risk of receiving non-homogeneous lots of components, having different
manufacturing date/codes and produced at various manufacturing sites. A large lot of
obsolete components with a single lot date code (LDC) should be considered suspect by the
purchaser (risks of refurbished/relabeled components for example).
4.3.3.3 Packaging
The origin and storage conditions of the components proposed by non-franchised distributors
are generally unknown. This presents a risk that the components proposed by a non-
franchised distributor were not stored under manufacturer-recommended conditions. This is
important for components that are sensitive to electrostatic discharges (ESDs) or moisture.
These components may also have been removed from their original packaging and handled
without the proper protective measures.

– 14 – IEC TS 62668-2:2014 © IEC 2014
4.3.3.4 Disassembled or recycled components
There is a great risk that these components were recovered from board or equipment at the
end of their life cycles or no longer in use. As component removal conditions are strictly
unknown, the integrity, performance and reliability of the components cannot be guaranteed.
4.3.3.5 Failed or scrap components
There is also the risk that the proposed components come from OCM lots rejected by a
manufacturer or customer after discovery of a manufacturing or specification non-compliance
issue.
NOTE Often EMSs dispose of surplus stock onto the open market without identifying if these were scrap parts or
good parts. Damaged components from fires, floods, earthquakes, etc., also can be sold onto the open market.
These can also be products rejected by the customer due to specific requirements not being met, such as an
unsatisfactory parameter sort.
4.3.3.6 Traceability
Purchasing through non-franchised distributors cannot often provide traceability back to the
OCM.
NOTE Moreover lack of traceability can lead to supply stolen components or components issued from
uncontrolled midnight production. Certificates of conformance can themselves be counterfeited.
4.3.4 Industrial risks
Use of components whose origin is uncertain can result in industrial risks during equipment
manufacturing and utilization:
• during production of boards, potential poor storage and handling of components supplied
by non-franchised distributors may impact these components. Oxidation, pollution, moisture,
warping or imperfect flatness of connections may cause visible or hidden faults during
board wiring;
• late detection of defective or counterfeit components during board and/or equipment
functional testing may seriously impact management of production and costs, due to
potential part scrapping or repair;
• detection of defective or counterfeit components during equipment utilization may require
retrofitting the equipment concerned, with probable serious consequences for the OCM.
4.3.5 Reliability risks
Use of components whose origin is uncertain can directly and gravely impact the operational
reliability of the equipment concerned.
4.3.6 Financial risks
4.3.6.1 Part costs
Purchasing components from a non-franchised supplier can have impacts on the purchasing
costs. The unit price of the component may be extremely high, because of market demand,
the degree of obsolescence, and the technical specification and quality levels required for
certain applications (defence applications, for example). Requests sent out to numerous
brokers can create an inflated, artificial demand for a given inventory, whose price will
subsequently rise.
4.3.6.2 Reimbursement
Many brokers, and more generally non-franchised distributors, work exclusively with sales
agreements that contain non-cancellation clauses. In some countries once components have
been identified as counterfeit they have to be stored for the regional law enforcement bodies

and cannot be returned back into the supply chain as in those countries it is illegal to sell
counterfeit or fraudulent components.
4.3.7 Legal risk
An electronic equipment manufacturer may be held legally liable for equipment failure having
serious consequences. Sourcing components from outside the franchised network makes it
nearly impossible to hold the OCM liable for product failure during utilization. Because this
type of purchasing does not provide OCM warrantees, only the OEM is held responsible.
The OEM is considered contractually liable for the sale of equipment containing counterfeit or
suspect parts. The vendor’s extra-contractual liability (or tort liability) may also be invoked if
the sale is considered an act of negligence or carelessness.
Damage caused by failure of components integrated into equipment is covered by the
electronic equipment manufacturer’s liability insurance. If the damage results from failure of a
counterfeit or suspect component, the electronic equipment manufacturer may be held
criminally responsible. These aspects should be considered in the context of the applicable
legislation in the countries in which the various supply chain vendors operate.
4.4 Reasons to initialize the derogation process
4.4.1 General
If there are no other reasonable or practical alternatives, then the OEM or the subcontractor
shall use the following derogation process when they are considering procuring untraceable
components from a non-franchised distributor. This process shall be used in exceptional
circumstances and shall not be normal practice.
4.4.2 Obsolescence notice failure
The last time buy (LTB) has expired. No LTB date was published by the manufacturer or the
obsolescence process failed to detect the LTB.
4.4.3 Allocation
A shortage caused by high market demand. The supplier cannot provide a firm delivery date.
This situation was not detected or foreseen during the production planning.
4.4.4 Insufficient end-of-life inventory
The end-of-life inventory accumulated at the last time buy (LTB) order is not sufficient for the
current program or to fill new orders.
4.4.5 Late orders
Late-stage modifications (quantities, lead time, etc.) were made to production planning. The
standard supply period for a needed component is not compatible with the modifications
made.
4.4.6 Minimum order quantity
The minimum order quantity greatly exceeds required quantities.

– 16 – IEC TS 62668-2:2014 © IEC 2014
4.4.7 Technical requirements
Upon request of the OEM design authority when the design or manufacturing data pack
requires use of a specific version of a component (date/code, mask, production site, lead
finish, etc.) that is no longer available through franchised distributors.
4.5 Derogation process
4.5.1 Notification to the OEM
Under the circumstances described in 4.4, the subcontractor shall notify the OEM defined
authority of the unavailability of a given component with traceability through the franchised
distributor network; AS/EN/JISQ 9100 certified non-franchised distributors which can provide
traceability back to the OCM are exempt from these requirements.
Figure 2 describes the derogation process when supplying without traceability from non-
franchised distribution.
Figure 3 describes potential avionics supply chain scenarios which may exist.

IEC
Figure 2 – Derogation process when supplying from non-franchised distribution

– 18 – IEC TS 62668-2:2014 © IEC 2014
Customer e.g.
airframer
OEM
CEM for OEM
Subcontractor is the OEM Purchasing
assembly where OEM component
design authority for his Agent under
the OEM is the procurement
product sold to OEM contract to OEM
design authority
CEM for CEM procurement
Subcontractor
subcontractor who based on OEM
component
is the design approved part
procurement
authority numbers
CEM component
procurement
Use of non- Use of non- Use of non- Use of non- Use of non-
franchised franchised franchised franchised franchised
distributor distributor distributor distributor distributor

IEC
Figure 3 – Potential avionics supply chain scenarios
4.5.2 Analysis of alternative solutions
Alternative solutions shall be examined by the OEM with the subcontractor to take into
account the technical and financial impacts for each program concerned, as well as the
reasons behind the sourcing difficulty.
The following alternative solutions should take precedence, as they provide the best
guarantees with regard to component origin:
Definition maintained (no change in the bill of material):
– Production cycle rescheduled to coincide with the component supply lead time using a
franchised network.
– The individual who defined the need authorizes use of an equivalent compone
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