We have on frequent occasions penned Supply Chain Matters commentary related to the increasing occurrence of counterfeit or bogus goods across multiple industry and governmental supply chain networks. This growing issue has impacted product-related as well as refurbished product supply chains and has contributed to a more important consideration in supply chain risk identification and mitigation. In December, we noted how this problem has spread across the most sensitive of supply chains that being the defense-oriented supply chains of U.S. military agencies.  In both industry and defense sectors, unsavory operators have developed sophisticated techniques to counterfeit brand trademarks on components, taking advantage of unsuspecting buyers in their quest to find lowest-cost supply, or tap secondary distribution channels.

Another wake-up reminder to this growing problem will now catch the attention of certain BlackBerry© smartphone owners.  This week, the U.S. Consumer Product Safety Commission announced that about 470,000 BlackBerry batteries distributed by Asurion are being voluntarily recalled due to an overheating and safety problem.  According to the recall notice, the batteries in question are counterfeit, and “these batteries were used across virtually all modes of refurbished BlackBerry devices distributed by Asurion prior to November 1, 2009.” Readers should note that Asurion is a well-known provider of consumer electronics add-on protection services for many mobile phone providers.  Their marketing tag line reads: Your Technology Protection Company.

The sobering aspect to this recall is that the batteries of suspicion carry a BlackBerry brand, which implies that an  uncertain number counterfeit batteries penetrated the supply chain without apparent detection.  The Recall Alert in-fact  provides a rather revealing phrase concerning the origins of these suspect batteries: Manufactured In: Unkown The fact that the dates of shipping span as far back as March 2004 is another concerning sign.  The Notice indicates that Asurion has received two reports of these suspect batteries causing minor burns. The CPSC notes that it is still interested in in receiving incident or injury reports that may be directly related to this incident.

I strongly suspect this incident will provide interesting challenges for consumers  with refurbished BlackBerry’s, since identification of genuine vs. bogus batteries will be key to mitigating this recall in a timely and cost effective fashion.  A web site has been referenced to provide consumers with information on how to identify the counterfeit version. Yes ladies and gentlemen, you have to identify if your battery is counterfeit based on various images of batteries.  The bottom of this Battery Exchange web site also notes that consumers should not contact Asurion directly, that this exchange program is being administered by a separate administrative entity.  That is even more interesting, adding a separate entity to the exchange and mitigation process.  Does anyone recall that past incident with Dell’s defective laptop batteries?  Dell clearly communicated the location of a web site where consumers could input a serial number and get real-time feedback if that battery was subject to recall.  I visited Asurion’s web site and as of this writing, there is no mention whatsoever of this recall program, or a reference to the separate battery exchange web site.  Interesting indeed.

The ever increasing popularity in smartphones and sophisticated consumer electronics brings with it high expectations for product reliability and customer service. Consumers pay premiums for these products because of the expectation that these are premium and durable products. Buying an add-on assurance program just adds more to these expectations. Being informed that the prime power source of your device may be counterfeit, trying to locate clear information, and having to determine this on your own based on visual inspection is not what consumers want to hear.

A supply chain risk mitigation plan must include means to quickly trace and identify suspect parts, and also be able to quickly respond when a potentially harmful quality problem arises. Clear and open communication is critical.  Think of Toyota’s latest incident.  Having just heard from the U.S. government that sticky accelerator pedals may have indeed been the root-cause of the recent rash of UIA incidents will not take away the damage that was done to brand reputation.

Quality or conformity of components applies not only to individual brand owners, but their add-on service and reverse logistics providers as well.  All involved are extensions of the brand, and consumers can often be unforgiving.

Bob Ferrari