Anti-Counterfeit Control Plan Version A Dated 08/24/2018

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1 Anti-Counterfeit Control Plan Version A Dated 08/24/ P a g e

2 1.0 Purpose This procedure describes the Anti-Counterfeit Control Plan at Gigli Enterprises, Inc., herein referred to as GEI, in compliance with AS6496 Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition. 2.0 Scope This procedure applies to all employees. 3.0 Responsibility The Quality Assurance Manager is responsible for the final review and approval of this procedure. Employees with responsibilities for purchasing, receiving, or verifying parts shall also be responsible for compliance to this plan. 4.0 Detailed Procedure 4.1 Anti-Counterfeit Policy The following policy has been reviewed and approved by executive management. Anti-Counterfeit Policy GEI has adopted this Anti-Counterfeit Policy to eliminate the impact of counterfeit products on GEI and its customers. This is a zero tolerance Policy against knowingly and intentionally trafficking in counterfeit goods. To support this policy of ensuring that there is a low risk of counterfeit products entering our supply chain, GEI maintains processes to ensure purchases are only made directly from the Manufacturer or Manufacturer approved sources. This is accomplished through compliance with SAE AS6496 Fraudulent/Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition Authorized/Franchised Distribution. Should a suspect counterfeit or counterfeit product be found, GEI shall quarantine such material and report the finding to the supplier and appropriate authorities. This policy shall be communicated, understood, implemented, and maintained at all levels of the Organization. This policy shall be posted on GEI s web site. It is also contained in this plan where it shall be available for the customer s records. This Policy shall also be communicated to all employees through meetings and postings. 4.2 Anti-Counterfeit Control Plan This plan has been developed to address all the requirements of AS6496 and give sufficient detail and/or references to other plans, procedures, or records. This plan is for customers and GEI employees. It shall be posted on GEI s web site. It is GEI s plan to only perform Authorized Distribution. 4.3 Customer Related Processes Disclosure of Non-Authorization It is GEI s plan to only perform Authorized Distribution. If this plan is changed and GEI agrees to perform unauthorized distribution, GEI shall notify the customer at the time of quote. When authorization is terminated, customers with outstanding orders shall be contacted Provision of Manufacturer's Warranty In accordance with Manufacturer distribution agreements, GEI shall pass on applicable warranty and support such warranty. 2 P a g e

3 4.3.3 Distribution Agreements GEI shall have a distribution or reseller agreement with the Manufacturers GEI distributes. Such agreements are considered proprietary and not subject to review by third parties unless mutually agreed upon by both the Organization and Manufacturer. GEI shall have a letter from the manufacturer that attests to the existence of a distribution agreement between GEI and the Manufacturer. 4.4 Register of Suppliers GEI maintains a register of suppliers in compliance with AS Purchase Restrictions GEI shall only purchase parts for resell from the Manufacturer or from the Manufacturer s Authorized Distributor. When GEI purchases from an Authorized Distributor the distributor s authorization with the manufacturer shall be verified and documented Purchasing Preference GEI has a preference to purchase Parts for resale directly from the Manufacturer Purchases Outside of a Distribution Agreement It is GEI s plan to only perform Authorized Distribution Counterfeit Electronic Part Control Plan Requirement If GEI purchases parts from Authorized Distributors, GEI shall confirm that these distributors have a Counterfeit Electronic Part Control Plan that adheres to this standard or has a plan compliant to AS6496 through their quality management system. 4.5 Traceability, Record Retention and Retrievability GEI retains and maintains records of product origin per AS9120. They are maintained for 10 years per D0401 Records Control Matrix Military Parts When GEI distributes military parts, the parts shall be accompanied by a copy of the Manufacturer s certification and GEI Certificate of Conformance, in compliance with the applicable military standards Commercial and Industrial Parts Commercial and Industrial Parts delivered by GEI shall have a Certificate of Conformance Commercial and Industrial Part Documentation For commercial and industrial parts, the manufacturer s documentation shall be maintained on file by GEI for ten (10) years Provision of Traceability Manufacturer s documentation, such as packing list, test results, and certificates of conformance are sent with each shipment. NOTE: When traceability to the Manufacturer for industrial/commercial product is necessary, the customer will request such in the RFQ. When agreed to by contract, the traceability shall be provided in accordance with the terms of the contract Retention Period Manufacturer provided records of product origin are maintained for 10 years per D0401 Records Control Matrix. 3 P a g e

4 The records shall be suitable in format, accuracy and detail to permit analysis by GEI internal Quality department, Manufacturer auditor, and government organizations. When record retention times required by customers exceeds 10 years, the organization shall be able to accommodate reasonable request for extended retention. Types of records and medium of storage shall be negotiated between the Customer and GEI Certificate of Conformance A GEI Certificate of Conformance is printed with every commercial order. Certificate of Conformances are available for military shipments if required. The Certificate of Conformance contains language as follows: CERTIFICATE OF COMPLIANCE Gigli Enterprises, Inc. is an authorized distributor of the products furnished on this shipment and hereby certifies that the products are new, unused and were purchased solely from the original manufacturer or through the manufacturer's authorized distribution. The original manufacturer warrants and certifies that the products they produce meet their specifications. Evidence of this warranty and certification is maintained at the manufacturer and/or at GEI. This COC is the Evidence of Conformity that this shipment meets the requirements of GEI's Quality Management System and/or Customer Purchase Order requirements agreed on between GEI and Customer. The packing list with the Certificate of Conformance as a unit is considered the whole Certificate of Compliance. This Packing List with Certificate of Conformance includes the follow data: a. The name and address of both the Organization and the Customer b. The Manufacturer's name c. Manufacturer's part number d. Customer part number (if known and required) e. Quantity f. Date code (if provided by the Manufacturer and required by the Customer) g. Lot code (if provided by the Manufacturer and required by the Customer) h. Serial number (if provided by the Manufacturer and required by the Customer) i. Customer purchase order number j. Ship date to Customer k. Authorized Distributor Statement of Conformance l. Signature of Responsible Party (Electronic Signature is acceptable) m. Country of Origin 4.6 Control of Suspect, Fraudulent and Confirmed Counterfeit Parts GEI has several processes imbedded into the QMS that evaluate and minimize the risk associated with potential counterfeit product infiltrating into GEI s inventory Customer Returns Return Policy a. GE maintains a Return Policy based on risk and fairness to the Customer and the Authorized Distributor, and in accordance with the Manufacturer s policy. b. GEI shall issue an RMA to a customer when a Return is authorized. c. The RMA shall require that the parts returned by the customer to GEI are the same parts that were purchased directly from GEI. If parts are returned that were not sold to the customer by GEI, and GEI 4 P a g e

5 agrees to accept the parts, then those parts shall not be co-mingled in inventory, nor sold to any other entity, as authorized product. d. GEI shall consider products returned from Independent Distributors or Brokers as suspect parts Return Verification The customer return process shall provide for verification of parts returned by the customer to GEI were purchased directly from GEI and not through another source. a. Verification shall require validation of the returned parts against GEI s traceability records, including the date/lot code of parts returned when available. If the date/lot codes do not match the shipped product, GEI shall disposition the parts based upon GEI s determination of whether the parts are suspect. b. Parts returned to GEI from a customer shall be inspected for any evidence of alteration, mishandling, improper packaging or repackaging. GEI shall disposition the parts based upon GEI s determination of where the parts are suspect. c. If GEI chooses not to verify a return based on economic considerations, the returned material shall not be restocked or returned to the supply chain Supplier Shipments When receiving parts, GEI will verify that the shipment was shipped by the intended supplier Disposition of Parts Deemed Suspect, Fraudulent or Counterfeit Suspect Fraudulent and Counterfeit parts are treated as non-conforming product per AS9120 and dispositioned per non- conformity P0803, Control of Nonconforming Products and Materials. a. Records of the dispositions shall be maintained. b. Suspect Parts may be returned to the Manufacturer for analysis and disposition to confirm their status as counterfeit or not counterfeit. c. Confirmed Counterfeit Parts shall not be returned to the Customer and may be retained for investigative or training purposes. The Organization shall quarantine the Parts for 5 years, or longer, if required by legal requirements. d. After 5 years or when legal requirements allow, the confirmed Counterfeit Parts shall be scrapped per Re-stocking Prohibition Suspect, Fraudulent or confirmed Counterfeit Parts shall not be reintroduced into the supply chain, restocked nor returned to the Manufacturer in a stock rotation. GEI shall not restock product into its inventory that was not purchased from the authorized distribution channel Packaging and Repackaging Parts Sold to Customers GEI shall send part in manufacturer sealed packaging whenever possible. 5 P a g e

6 If manufacturer packaging cannot be sent, GEI shall package in accordance with the manufacturer requirements, customer requirements, and/or GEI s QMS. When repackaging, GEI shall maintain traceability information on repackaged material. NOTE: Traceability information may include manufacturer, manufacturer part number, quantity, date code, lot code, etc. See of this document or JEDEC 31 for more information. 4.7 Training Employees in Production and Warehouse shall be trained on their processes to prevent counterfeit. This training shall be documented in training requirements per applicable position 4.8 Scrap Control in Authorized Distribution Scrap Control is documented in internal scrap procedures, P0803, Control of Nonconforming Products and Materials Scrap Records If parts are scrapped by GEI, GEI shall keep records of the scrapped parts for a minimum of five years from the date of destruction or as required by the contract Outsourced Destruction of Scrapped Parts If GEI outsources the destruction of scrapped parts, GEI shall ensure control over the process and obtain Certificates of Destruction from the sub-contractor. The Certificates of Destruction shall be maintained for five years from the date of destruction Proper Destruction Proper destruction is the mutilation of the parts so as to render the parts including the internal elements as physically unusable. 4.9 Inventory Control Plan GEI has a system for controlling its inventory. The inventory control system provides for traceability of customer returned parts. Records shall be maintained in accordance with GEI s retention policy Segregation of Product The inventory control system provides for segregation of authorized parts from unauthorized parts. Unauthorized parts are not entered into the inventory control system and are kept in a separate holding area. GEI has a documented process for this segregation, P0803, Control of Nonconforming Products and Materials Inventory Access Warehouses where inventory is kept is only accessible by GEI employees. Visitors shall be escorted Traceability of Returned Parts Customer returns are traced in the inventory control system. Customer Returns are not commingled with new and unused parts. There is sufficient capacity to exclude customer returns. Records of customer returns are maintained Reporting The documented process assures that all occurrences of Counterfeit parts are reported, as appropriate, to the Quality Assurance Manager, affected customers, authority having jurisdiction, and government reporting organizations (e.g., GIDEP). External reporting includes the manufacturers response if provided. 6 P a g e

7 4.11 Audits This anti-counterfeiting plan and referenced processes are listed and scheduled for internal audit. This also makes the plan part of GEI s QMS and subject to our third party registrar to AS Counterfeit Awareness The Quality Assurance Manager is responsible for keeping informed on current counterfeiting information and trends, including detection and avoidance techniques contained in appropriate industry standards, and using such information and techniques for continuously upgrading internal processes GIDEP Participation The Quality Assurance Manager shall ensure GEI is a member of GIDEP. The Quality Assurance Manager shall screen GIDEP reports and other credible sources of counterfeiting information to avoid the purchase or use of counterfeit electronic parts 4.14 Obsolete Parts In the context of this plan Obsolete electronic part means an electronic part that is no longer in production by the original manufacturer or an aftermarket manufacturer that has been provided express written authorization from the current design activity or original manufacturer. It is GEI s plan to only perform Authorized Distribution. Therefore, obsolete parts are not processed by GEI. 5.0 Document History Effective Date Description of Change Rev. Letter Approved By 08/24/2018 Initial Release A Jolea Perdue 7 P a g e