1.     PURPOSE

Loran aims to achieve the following goals through the Prevention and Detection of Counterfeit Parts Procedure.

ü  maximize availability of authentic products,

ü  procure materiel from reliable sources,

ü  assure authenticity and conformance of procured materiel, including methods such as certification and traceability,

ü  identification and deactivation of the control materiel identified as fraudulent or counterfeit,

ü  reporting the suspect or confirmed fraudulent/counterfeit materiel to other potential users and authorities.

 

2.     POLICY

Loran implements the following actions to achieve these above goals.

2.1. Counterfeit Parts or Suspect Counterfeit Parts Preventive Actions:

ü  Actions recommended for procuring parts and materials with a full warranty,

ü  Actions recommended for minimizing risks and protecting Loran QMS from counterfeiting,

ü  Actions recommended when buying from a non-authorized supplier.

2.2. Counterfeit Parts or Suspect Counterfeit Parts Determination Action:

ü  Actions recommended when no reasonable alternatives exist (e.g., a redesign is required, an unacceptable schedule delay will result, the program or customer cannot bear the additional cost) and the decision has been made to procure from a non-authorized supplier.

2.3. Counterfeit Parts or Suspect Counterfeit Parts Mitigation Action:

ü  Actions recommended when procuring parts from an unauthorized supplier or otherwise suspect that a part or material at risk of being counterfeit has been procured.

 

Loran bases its Prevention and Detection of Counterfeit Parts Procedure on the following standards:

SAE-AS6174 Rev.R Counterfeit Materiel – Assuring Acquisition of Authentic and Conforming Materiel,

SAE-AS6832 (2020) Counterfeit Materiel – Assuring Acquisition of Authentic and Conforming Fasteners,

 

3.     AVAILABLE AND EXCLUDED PRODUCTS FOR LORAN AEROSPACE

When determining the boundaries of the scope of the QMS by Loran, the following significant factors are considered:

ü  Internal Issues,

ü  External Issues,

ü  Interested Parties,

ü  Requirements of the Interested Parties,

ü  Products available from Loran:

 

3.1. AVAILABLE

Loran is a company that supplies hardware and fasteners in the field of aerospace industry. Loran quality policy and all processes applied in the system cover fastener group products and their raw materials. Loran quality policy applies to metallic and non-metallic components that mechanically attach two or more objects whose fasteners are defined as United States Federal Supply Classification Group codes as shown in the following list:

ü  5305 Screws

ü  5306 Bolts

ü  5307 Studs

ü  5310 Nuts and Washers

ü  5315 Nails, Machine Keys, and Pins

ü  5320 Rivets

ü  5325 Fastening Devices

ü  5340 Miscellaneous Hardware (specific parts in this hardware industry code are applicable, including, but not limited to, clamps, hinges, coiled insert fasteners, and clinch-nut fasteners)

 

3.2. EXCLUDED PRODUCTS

ü  Electronic components and their all-sub-equipment (connectors, cables, etc.),

ü  Chemical products,

ü  Nuclear products and their spare parts,

ü  Products containing mercury or similar environmentally harmful components,

ü  Shelf-Life Expired Products cannot be procured and sold even if the product is in its original package.

ü  Obsoleted products,

ü  Serviceable or As-Is (AR) conditioned products.

 

4.     TERMS AND DEFINITIONS

4.1. Materiel in this document refers to material, parts, assemblies, and other procured items (except for electronic and chemical parts).

4.2. Manufacturer in this document refers to the point of origin of any materiel covered by the standard, including factories,

mills, foundries, mines, chemical plants, laboratories, etc.

4.3. Suspect Materiel: Materiel, items, or products in which there is an indication by visual inspection, testing, or other information that it may meet the definition of fraudulent materiel or counterfeit materiel provided below.

4.4. Fraudulent Materiel: Suspect materiel misrepresented to the customer as meeting the customer’s requirements.

4.5. Counterfeit Materiel: Fraudulent materiel that has been confirmed to be a copy, imitation or substitute that has been represented, identified, or marked as genuine, and/or altered by a source without legal right with intent to mislead, deceive or defraud.

4.6. Identity: Information such as the current design authority, original manufacturer, trademark or other intellectual property, performance, unique item identifier, part number, date code, lot number, testing methods and results, inspection, documentation, warranty, origin, ownership history, packaging, storage, handling, physical condition, previous use, etc.

4.7. Authentic: Produced with legal right or authority granted by the legally authorized source.

4.8. Aftermarket Manufacturer: A manufacturer that meets one or both of the following criteria:

4.8.1.      The manufacturer is authorized by the original manufacturer to produce and sell replacement materiel, usually due to an original manufacturer decision to discontinue production of materiel. Materiel supplied is produced from dies, molds, or other manufacturing equipment that has been:

ü  transferred from the original manufacturer to the aftermarket manufacturer,

ü  produced by the aftermarket manufacturer using original manufacturer tooling and intellectual property (IP), or

ü  produced by the aftermarket manufacturer through redesign to match the original manufacturer’s specifications without violating the original manufacturer’s intellectual property rights (IPR), patents, or copyrights.

4.8.2.      The manufacturer produces materiel by emulating or reverse-engineering obsolete materiel to satisfy continuing customer needs without violating the original manufacturer’s intellectual property rights, patents, or copyrights.

4.9. Approved Supplier: Suppliers that are formally assessed by the current design activity or the original manufacturer, determined to be a trusted source that will reliably provide authentic and conforming materiel, and entered on a register of approved suppliers.

4.10.       Authorized Reseller: An entity who has a legally binding relationship with the legally authorized source but does not provide direct product support to the customer.

4.11.       Authorized Supplier: Aftermarket manufacturers as defined above, and suppliers authorized by the current design activity or the original manufacturer to produce and/or sell materiel.

4.12.       Certificate of Authenticity: A statement to the effect that all materiel items listed above furnished on this contract are genuine, new and unused unless otherwise specified in writing herein; are suitable for the intended purpose; are not defective, suspect, or counterfeit; have not been provided under false pretenses; and have not been materially altered, damaged, deteriorated, or degraded.

4.13.       Certificate of Conformance (CofC, CoC): A document provided by a supplier formally declaring that all buyer purchase order requirements have been met. The document may include information such as manufacturer, distributor, quantity, lot and/or date code, inspection date, etc., and is signed by a responsible party for the supplier.

4.14.       Disposition: Decisions made by authorized representatives within an organization concerning future treatment of nonconforming materiel. Examples of dispositions are to scrap, mutilation, use-as-is (normally accompanied by an approved variance/waiver), retest, rework, repair, or return-to-supplier.

4.15.       Original Manufacturer: An organization that designs and/or engineers and produces materiel and is pursuing or has obtained the intellectual property rights to that materiel.

Notes:

ü  The materiel and/or its packaging are typically identified with the original manufacturer’s trademark.

ü  Original manufacturers may contract out manufacturing and/or distribution of its product.

ü  Different original manufacturers may supply product for the same application or to a common specification.

4.16.       Supply Chain Traceability: Documented evidence of materiel’s supply chain history. This refers to documentation of all supply chain intermediaries and significant handling transactions, such as from original manufacturer to distributor, or from excess inventory to broker to distributor.

4.17.       Heat Number: The heat number is used to trace the material's origin to ensure metal quality. It's similar to a batch number as it relates to quality control in manufacturing facilities. This number should match the number that is printed or stamped on the surface of the material.

 

5.     RESPONSIBILITIES

ü  Management Representative: Responsible for assuring proper and low risk incoming parts/materials sourcing to prevent counterfeit parts from entering our organizations systems and processes.

ü  General Manager: Responsible for ensuring proper evaluation and oncoming receiving techniques and methods to prevent counterfeit parts from entering our system or processes.

 

6.     REQUIREMENTS

While managing a project, Loran's main purpose is to provide full traceability of the product and on time delivery, maximize customer satisfaction, and minimize any suspect counterfeit or counterfeit product.

 

The most negative aspect of working directly with the main manufacturer is the long delivery time. While many of our customers are satisfied with our price advantage, they cancel their product orders due to the long delivery time.

 

Contact is made with the main manufacturer regarding the product, and if the manufacturer makes an offer, a Loran offer is presented to the customer based on their direct offer.

 

If the main manufacturer or authorized distributor rejects Loran's offer request due to not having an authorized account, Loran follows the following ways:

ü  Either Loran may enter into a Confidentiality Agreement or Non-Disclosure Agreements to use the accounts of its parent company. Depending on the Loran end user declaration, the parent company defines the product delivery and end user information in its account and confirms and guarantees that the product delivery to the end user will be made by Loran.

ü  Or Loran identifies the parent company as its supplier, activates the order directly and executes the order through the parent company.

 

6.1. Counterfeit Parts or Suspect Counterfeit Parts Preventive Actions

6.1.1.      Developing Counterfeit Avoidance Process Policy: Loran Aerospace has developed a Counterfeit Avoidance Process Policy that is described in the Prevention and Detection of Counterfeit Parts Procedure in place to comply with the requirements of the prevention of counterfeit product supplying.

6.1.2.      Loran implements its counterfeit parts prevention policy starting from the quoting process and throughout the life of the product after its delivery to the customer.

6.1.3.      Offering Clear and Net Information: Loran clearly provides the following information about the product to its customers in quoting processes are managed through the ERP system and online shopping portal (aviation.loranaerospace.com):

ü  Product Condition: New, New Surplus, Overhauled, Serviceable, As-Is AR

ü  Certificate: Manufacturer (MFR) Test Reports, MFR CofC, FAA/EASA Certificate (if applicable),

ü  Lead Time

ü  Cage Code

ü  Origin

ü  Packing: Number of products in a package (e.g. 100ea in 1 Package),

ü  Minimum Order Quantity

ü  Hazmat Situation

ü  Warranty Situation

ü  Customs Tariff: ECCN and Schedule B codes

ü  Export Regulations: End User Clarification, Export License is Required (ELR), No License Required (NLR)

ü  Material

ü  Note: Important information about the product that is not explained above but is included in its features (for example, shelf life)

6.1.4.      Ensuring fully traceable product supply: Loran seeks to work directly with the main manufacturer or authorized distributor.

6.1.5.      If the product is supplied from the market, Loran requests traceability documents from the supplier to the main manufacturer.

6.1.6.      For products where traceability cannot be ensured, the customer shall be informed at the quotation stage that the product can be delivered with New Surplus condition and only with Loran CofC.

6.1.7.      Loran does not supply products with Obsolete Product, Serviceable or As-IS (AR) conditions.

6.1.8.      Loran does not supply obsoleted product, serviceable or As-Is conditioned products because they can increase the risk of acquiring counterfeit materiel.

6.1.9.      Loran checks the following information and documents and ensure of their traceability are complete, even if the product comes from the main manufacturer.

6.1.9.1.  Heat Number (Mill Certification Report) of Raw Material must be specified, and it must be same on the following documents:

6.1.9.2.  raw material test reports and package slip,

6.1.9.3.  test reports of the product manufacturer,

6.1.9.4.  CofC of the product manufacturer,

6.1.9.5.  The Lot (Batch, Serial) Number of the product must be the same in the following documents:

6.1.9.6.  test reports of the product manufacturer,

6.1.9.7.  package slip and CofC of the product manufacturer,

6.1.9.8.  distributor (or supplier) package slip and CofC

6.1.9.9.  Product name and part number must be same on all traceability documents,

6.1.10.   External supplier documents, if any, regarding the product; Certification of outsourced processing performed, such as heat treatment, plating, and corrosion prevention treatments.

6.1.11.   In case of alternative product supply by a supplier, Loran requests full cross-usability confirmation between both products guaranteed by the OEM or main manufacturer for the alternative product.

6.1.12.   Loran never makes any changes or corrections to the product label or product packaging for the product supplied. All products are sent to the customer as they come from the supplier.

6.1.13.   Training: Loran aims to arrange internal and external train employees in the awareness, avoidance, detection, mitigation, and disposition of suspect counterfeit or counterfeit fasteners, relevant to their organizational role and/or function.

 

6.2. Counterfeit Parts or Suspect Counterfeit Parts Detection Action:

 

 

6.2.1.      Quality Control Laboratory

If necessary, Loran may obtain third-party laboratory services for destructive or non-destructive test applications to check and ensure the physical and metallurgical suitability of a product.

 

If the product acceptance conditions include and the manufacturer and the customer have permission, Loran may check the conformity of the products using calibrated basic measuring instruments, if necessary.

 

6.2.2.      Determination of A Counterfeit or Suspect Counterfeit Product

If the Loran quality management system identifies a suspect counterfeit or counterfeit part, or a counterfeit has been identified by an external source (e.g., the government or customer), the following steps shall be implemented:

6.2.2.1.  Identify the part as suspect counterfeit/counterfeit (e.g., tag, label, mark),

6.2.2.2.  Immediately upon detection, counterfeit product is identified by means of a “NONCONFIRMED PRODUCT” tag label and is segregated from other product to prevent inadvertently mixing with good product.

 

 

6.2.3.      Do not keep NONCONFORMING PRODUCTs with COUNTERFEIT (or SUSPECT COUNTERFEIT) PRODUCTS.

6.2.3.1.  Segregate and quarantine the part from acceptable non-suspect counterfeit/counterfeit products,

6.2.3.2.  Segregate and quarantine the lot the suspect part came from until the lot can be cleared,

6.2.3.3.  Start a Corrective Action process and implement preventive actions of the suspect counterfeit/counterfeit part to preclude its use or reentry into the supply chain,

6.2.3.4.  To avoid re-entry into the supply chain, do not return the part to the supplier except under controlled conditions to allow the supplier to conduct an internal investigation,

6.2.3.5.  Retain available documentation, such as paperwork, records, and packaging, as well as the suspect counterfeit/counterfeit part until after the investigation is completed,

6.2.3.6.  After the authorities having jurisdiction have released the part for destruction, the suspect counterfeit/counterfeit part shall be destroyed to preclude its use or reentry into the supply chain.

 

7.     PRODUCT RISK ASSESSMENT

When a counterfeit product is detected, LORAN determines the policy to be applied according to the product and supplier risk value. Accordingly, the policies applied for raw materials and coated products may differ, but the "Risk Assessment Table for Supplied Products" is taken as the basis:

 

8.     PRODUCT ACCEPTANCE FOR ALL SUPPLIERS

Loran Aerospace seeks and confirms the following information and documents, and ensure of their traceability are complete, even if the product received from the main manufacturer.

8.1. Uninterrupted traceability, traceability from the raw material to the manufacturer or authorized distributor,

8.2. The Heat Number of the Raw Material must be specified and same in the following documents:

ü  raw material test reports and package slip,

ü  test reports and CofC of the product manufacturer,

8.3. The Lot (Batch, Serial) Number of the product must be the same in the following documents:

ü  test reports, package slip and CofC of the product manufacturer,

ü  distributor (or supplier) package slip and CofC

8.4. Product name and part number must be same on all traceability documents,

8.5. External supplier documents, if any, regarding the product; Certification of outsourced processing performed, such as heat treatment, plating, and corrosion prevention treatments.

8.6. For products supplied from suppliers other than authorized distributors, Loran also checks the following:

ü  Non-homogeneous lot,

ü  Prohibited materials present,

ü  Item marking issues:

ü  Marking does not match similar items,

ü  Alterations/resurfacing of markings,

ü  Incomplete markings,

ü  Wrong size/location/methods of marking,

ü  Quality difference in the markings,

ü  Lot number/date code marking issue

ü  Package/construction issues:

ü  Size/shape/color/finish/materials,

ü  Evidence of rework/repair/refinishing/resurfacing of packaging,

ü  Poor packaging/construction quality

 

9.     ON-SITE CONTROLS AND AUDITS

Under no circumstances, Loran, as a supplier company, never seeks or requests the main manufacturer's facility controls.

 

9.1. Special Production Projects and The Manufacturer's On-Site Controls:

ü  If Loran carries out a special production project, it requests production process control from the manufacturer when determining the manufacturer who will carry out the special production.

ü  Otherwise, it does not apply the production process control condition in product supplies with the main Manufacturer traceability.

ü  However, for traceability reasons, Loran requests manufacturer test reports and CofC certificate in all supply processes, whether from the main manufacturer or from the market.

 

9.2. Supplier Qualification Audit (SQA)

9.2.1.      According to the Loran QMS, one of the most important quality management legs is to establish, maintain, and increase customer satisfaction, as well as to meet AS9100, AS9120, and OEM requirements.

9.2.2.      The Loran Supplier Qualification Audit (SQA) aims to evaluate suppliers who are doing business with Loran or want to establish business relations with Loran, in accordance with the Loran QMS.

9.2.3.      According to the Loran QMS, Loran conducts SQA for actual and potential suppliers annually, unless there is a nonconformity claim against the supplier.

9.2.4.      The SQA results are discussed at the Management Review Meeting, and evaluations of SQA results are conducted for both new and existing suppliers.

9.2.5.      Supplier performance reviews will be conducted at the top management level, and supplier performance will be discussed at the management review meeting.

9.2.6.      Actions for the Non-Compliant Result(s):

9.2.6.1.  Questions Marked "Low": No action required.

9.2.6.2.  Questions Marked "Medium": Supplier is notified on this subject, and a maximum of 120 days is required to fix the non-compliant status.

9.2.6.3.  Questions Marked "High": This is a major non-compliant status; the supplier is notified of this issue to resolve it within a maximum of 30 days. The supplier will be hold in “Pending” status during this process.

 

9.3. Supplier Score and Risk Assessment for Non-Authorized/Non-Approved Supplier Procurement

9.3.1.      Loran carries out all purchasing processes through the ERP system. In this context, there is a Risk Assessment section for both suppliers and products. If necessary, risk factors for the supplier or product are stated in these fields.

9.3.2.      The purchasing department evaluates suppliers before purchasing a product or service to determine their ability to meet the LORAN's requirements. The main criterion of this evaluation process is the supplier's historical success for LORAN projects.

9.3.3.      LORAN is used the criteria are described in the SAE ARP9134 document while supplier qualification evaluation performing.

9.3.4.      While conducting supplier qualification evaluation by LORAN, it also published the Supplier Code of Conduct document (see #683494 - Supplier Code of Conduct) for these companies. In this document, LORAN determined the general rules that its suppliers must comply with and requested that these rules be implemented.

9.3.5.      LORAN monitors its suppliers on a project basis, according to the criteria specified in the Supplier Risk Assessment Table, and scores them based on the main criteria.

 

 

9.4. Reporting and Disposition of Suspect Counterfeit Parts or Counterfeit Parts

9.4.1.      If Loran experiences a counterfeit part incident, first Loran will apply article 6.1,

9.4.2.      If the product is delivered to the customer from Loran, all end users are immediately notified of the counterfeit parts and the use of the products is prevented.

9.4.3.      Loran may report suspect counterfeit or counterfeit parts per legal and contract requirements. The reporting may also be provided to counterfeiting reporting organizations as well as directly to the OEMs.

9.4.4.      Loran takes immediate remediation /corrective action that if required, plan for rework / replacement / repair of any of our product already delivered that may contain counterfeit components.

 

10.  REFERENCES

SAE-AS6174 Rev.R Counterfeit Materiel – Assuring Acquisition of Authentic and Conforming Materiel,

SAE-AS6832 (2020) Counterfeit Materiel – Assuring Acquisition of Authentic and Conforming Fasteners,

9043642 - SUPPLIER QUALITY MANUAL  QUALIFICATION AND EVALUATION REV.2