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William A. Levinson

Customer Care

Counterfeit Parts and the 1,000 Risk Priority Number

Real-world case studies

Published: Tuesday, December 5, 2017 - 13:03

The recent revelation that a major steel maker falsified test data,1 and similar scandals at other companies,2 underscores the menace of counterfeit parts, or what a 1987 Senate hearing called COME UPS: COunterfeit MatErials and Unauthorized Product Substitutions. The history of COME UPS shows the potentially catastrophic outcomes for which the manufacturers involved can be held civilly, and criminally if a government contract is involved, responsible.

Tsar Peter I of Russia recognized this issue almost 300 years ago when, in January 1723, he issued a decree that began by ordering a factory owner to be flogged and banished to hard labor for selling defective small arms to the Russian Army. A foreman alderman was to be flogged and banished to Azov for putting trademarks on faulty muskets, i.e., passing products he knew to be nonconforming. Peter went on to command that, if a stoppage (i.e., failure to fire) took place during combat, those responsible would be subject to punishments ranging from flogging to loss of their Sunday vodka rations.3

The Chinese lost the Battle of the Yalu River (1894) to the Japanese partly because of substandard ammunition. The Wikipedia entry claims, “...many Chinese shells appear to have been filled with cement or porcelain, or were the wrong caliber and could not be fired.” The Japanese used high-explosive shells at Tsushima (1905), which could start fires and wreck the upper part of a ship, but their ability to penetrate a battleship's armor belt was problematic at best. The Russians’ armor-piercing shells should have given them an advantage, but defective fuzes and (per the author’s memory) the use of cast rather than rolled steel for the shells—the manufacturers cut corners to save money—resulted frequently either in nonpenetration of enemy armor or failure to detonate after penetration.

Arthur Miller’s play All My Sons is based on a real incident during World War II in which a manufacturer knowingly provided cracked cylinder heads for aircraft engines, which resulted in the loss of pilots and equipment. A strong argument could be made that the intentional use of COME UPS is morally no different than sabotage, and also harder to prevent. Defense companies have fences and guard posts to keep out enemy spies and saboteurs, but these are of no help against insiders who put profit ahead of quality.

Senate comeuppance

The Senate hearing minutes, which should be in the public domain as publications of the U.S. government, underscore the enormous danger from counterfeit and substandard parts. Senator Sam Nunn said, “Finally, it is distressing to realize how extremely difficult it is to detect substandard and defective products before they are put into operation or even to track down and remove those products which have been identified as substandard after they have been put into operation. Substandard or defective products as seemingly minor as springs, valves, seals, and bearings can lead to terrible consequences if used in critical applications.”

This statement already points to a detection rating of 10 (worst possible) in a failure mode effects analysis (FMEA), which hints as to how dangerous this problem really is. Senator William Roth added, “What we are concerned about is danger, and, frankly, danger is what we found. For example, this nozzle I have here is the type used to put out fires on ships, obviously a very, very important piece of equipment. The Department of Defense contracted to buy almost 3,500 of these nozzles from one contractor for use on our ships throughout the world. Unfortunately, as we will hear today, that contractor used inferior materials. The bottom line is that the Navy later found out that 70 percent of them failed on the first use.”

To this Stephen H. Levin, staff counsel for the Permanent Subcommittee on Investigations, added, “Further, in one of the cases which will be discussed this morning, which involves defective fire-hose nozzles for Navy ships, we developed information during the course of our investigation indicating that some of these nozzles might still be on navy ships, although it has been five years since they were first discovered to be defective.”

What we have here is therefore a real-world case study in which a FMEA would probably deliver a risk priority number (RPN) of 1000. The potential failure consequences justify a severity rating of 10, the 70-percent first-use failure rate—perhaps higher for subsequent uses—requires a 10 occurrence rating, and the fact it was not discovered for five years suggests a 10 detection rating as well.

Fires on ships do not usually start by themselves but are generally due to enemy action during wartime. Inability to extinguish a fire during combat could therefore lead not only to the loss of an expensive ship and irreplaceable sailors, but also to the loss of a battle. The Japanese lost the Battle of Midway partly because they could not put out the fires that American bombs started on three of their aircraft carriers. The issue at Midway was the presence of bombs and fuel where they should not have been, rather than defective firefighting equipment, but the outcome was the same.

On the other hand, the poor performance of American Mark 13 torpedoes at Midway (although COME UPS were apparently not involved), resulted in the almost futile loss of an entire torpedo bomber squadron along with 29 of its 30 pilots and gunners. The torpedoes either missed, e.g., by going under their targets, or failed to explode on impact. The only reason the loss was “almost” futile was because Japanese fighters who went after the torpedo bombers were out of position to stop a subsequent attack by American dive bombers. The takeaway from this, as well as unexploded bombs (UXBs) from World War II, is nonetheless that every weapon that failed to do its job meant that the pilots who flew the missions risked their lives, and sometimes lost their lives, for absolutely nothing. The UXBs, and even unexploded shells left over from World War I, also still endanger people against whom their use had never been intended.

Senator Roth continued, “In the second case we will hear about today, one company, The Spring Works, supplied substandard springs and other items without the processing needed to assure that the part would hold up under stress or even under normal circumstances. To look at them, they look like ordinary springs, but they were specially ordered for particular needs. For example, they are used in the hydraulic landing gear and wing flaps of aircraft. If the spring fails, the consequences to our service men and women could be deadly.... Springs made by this company also found their way into the Space Shuttle, intercontinental ballistic missiles, submarines, the B-52 bomber, the F-14 fighter, and an amazing number of other military projects. We have a chart that shows only some of the end-products that contain springs from The Spring Works.”

We are again dealing with parts for which an FMEA’s failure mode severity rating would be 10.

DoD reeducation

Derek J. Vander Schaaf, the deputy inspector general of the Department of Defense, provided another example in which an FMEA’s detection rating would be at the high end, for a missile-seeker head for which a failure mode would have a 10 severity rating. He notes the possible consequences of failure to stop an armed enemy aircraft.

“There was a reeducation process that took place,” said Vander Schaaf. “I will mention one case specifically, where we learned to do that, in that case a firm in Minnesota that made castings that hold the seeker head for the Phoenix missile. This is an example of those castings. [Holding up a sample casting.] They look perfectly all right from a distance. You can’t see that anything is wrong with them. But we had an employee in that particular firm who indicated that the company was using remelted aluminum and not virgin ingots. It was welding some of these castings."

Vander Schaff continued, “I have mortar fins, for example, that were badly machined. Some are too long, some are too short. This caused mortar rounds to fly erratically, with the dangers quite apparent.... “Another company that was convicted had provided us with M-60 machine gun pistons that make the machine gun cycle and fire. They will jam and break after a short series of shots. Again, a real problem. We had to go back and rescue those parts from the system.”

If the mortar rounds won’t fly straight, the mortar and its crew might as well not be on the battlefield at all. A machine gun that jams also might as well not be there and, noting its traditional purpose, could easily allow a friendly position to be overrun with consequent loss of lives and possibly a battle. This supports the opinion that COME UPS are morally no better than sabotage by the enemy, and also are far more insidious because the menace comes from inside rather than outside the factory.

Vander Schaff’s testimony also underscores the issue of counterfeit or substandard fasteners, a traditional case study in COME UPS that underscores the adage, “For want of a nail.”

“The other big issue that I should mention that we face and have many investigations ongoing, involves fasteners and bolts,” said Vander Schaff. “You have probably read about that subject in the newspapers. We have some 30 of those 231 cases that your investigator mentioned that involve those nonconforming bolts. It is a major problem with us right now in the department. We are trying to clean that mess up, find all those bolts, get them out of the systems, and then put in place procedures to keep that from happening in the future.”

The subsequent testimony of The Spring Works engineer David C. Rupp reinforces the takeaway that detection of COME UPS is extremely difficult due to the willful malice of the suppliers in question. The problems with The Spring Works went undetected for seven years, with substandard parts being provided for military contracts. Had Rupp not blown the whistle on his employer, the problems might have taken far longer to detect, and might have resulted in the loss of personnel and/or equipment.

“In roughly 80 percent of the military contracts, there was some sort of inferior product substitution present,” said Rupp. “There were several different ways in which these product substitutions would occur. However, all product substitutions had one thing in common: certifications were falsified by The Spring Works. McCullough had used false certifications since the inception of The Spring Works. In fact, he amassed a library of blank certifications with all but the vendor’s signature whited out.... Mr. McCullough knew the potential safety problems that he was creating, but he was still insisting on cutting corners, like using cheaper stainless steels and failing to have the springs adequately heat-treated or plated properly.... Mr. McCullough had an uncanny knack for knowing which of his customers tested the items they ordered, and how the testing was performed. And he responded accordingly; that is how he was able to keep his manufacturing scheme going for seven years.”


The Senate hearing therefore leaves us with several important takeaways:
1. The FMEA severity rating for counterfeit parts can easily be 10 if they are incorporated into safety-critical or mission-critical products or components.
2. The FMEA occurrence rating for counterfeit parts is likely to be 10 because the supplier has intentionally cut corners on all the parts to save money. Another way of saying this is that 100 percent of the product is nonconforming.
3. The FMEA detection rating also is likely to be as high as 10 because the supplier tries intentionally to conceal the nonconformances, and may even generate falsified test and inspection data to get the product out the door.

RPNs for counterfeit parts and substandard materials can therefore realistically, and easily, approach 1000. This most recent incident, along with the 1987 Senate testimony, will hopefully draw significant attention to the issue followed by deployment of effective corrective and preventive actions to avoid recurrence. Organizations should have learned by now that it is a lot cheaper, in the long run, to do the job right up front rather than pay for product recalls, civil liability, and public relations damage control later.

1. Reuters, 2017. “Kobe Steel falsified data on steel, aluminum, raising safety fears for cars, airplanes.”
2. Bloomberg, November 23, 2017. Ujikane, Keiko, and Suga, Masumi. “Fake Data Scandal Hits Another Japanese Manufacturer.
3. Juran, Joseph. A History of Managing for Quality. Irwin Professional Publishing, 1995.


About The Author

William A. Levinson’s picture

William A. Levinson

William A. Levinson, P.E., FASQ, CQE, CMQOE, is the principal of Levinson Productivity Systems P.C. and the author of the book The Expanded and Annotated My Life and Work: Henry Ford’s Universal Code for World-Class Success (Productivity Press, 2013).


Counterfeit parts

Unfortunately, as a society, we have not seen fit to make people personally responsible for these events. In most instances, the companies involved will have made enough money on substandard products that the fines and penalties can be considered as minor issues.

Too exacerbate the problem, unscrupuous manufacturerers create a pricing structure that can force quality organizations out of business. The old saying "Bad money drives out good!" is equally applicable to product.