A modern-day horror story
In January 2017, a Director of an international size OEM engineering company of specialist fasteners, became embroiled in a dispute with a major customer, who accused them of selling shoddy products.
Apparently, one of their high specification bolts had been installed into a large turbine, which operated under extreme pressures. It was fitted by the customer’s highly skilled engineering team about six months earlier, who claimed that they had bought the bolt from an authorised Distributor of the OEM’s.
Upon inspection at the Customer’s site, the OEM’s own engineers found that the bolt displayed their Company’s logo and, to all intent and purposes, it looked like a genuine bolt. However, as it had been fitted months previously, the Customer had thrown all the packaging away that contained the ‘track and trace’ production data.
The Customer warned the Director to expect a claim for damage to the turbine and consequential loss, amounting to many tens of thousands of pounds.
As a result, the Director alerted their Insurer of a potential claim and asked the Company’s Metallurgists to conduct tests on the bolt to confirm that it was a genuine bolt and, if it was, to try and identify what caused the problem, as there may be a potential recall of flawed products needed.
The Insurer advised them that, whilst they were committed to pay out on the claim for damages up to the extent of the product liability cover, they would only do so if it was a genuine product.
The Director realised that he was between ‘a rock and a hard place’. His Metallurgists could either determine that the bolt was a counterfeit, negating the Company’s insurance cover leaving it liable to pay damages or find that it was a genuine but flawed bolt, resulting in the horrors of a product recall.
The Metallurgists reported that they believed that it was a counterfeit, based upon the poor quality of metal used. He advised the Customer of the result and suggested that they should take their claim up with the Supplier of the counterfeit bolt.
The Customer responded that his engineering team had already investigated, with the Supplier claiming that they had bought it from an authorised Distributor of the OEM. As far as they were concerned, the OEM was still responsible and they would not only take the matter to Court but cease all future business with the OEM.
The Director reported to his colleagues that not only was their insurance cover invalid but they also faced the loss of a major customer and being dragged through the Courts. After considering all their options, rightly or wrongly, through gritted teeth, the Board decided to settle.
A nightmare situation for the OEM but, with the spread of counterfeiting across all engineering sectors, heightened by threat of 3D printing, what could they do to prevent it happening again?
They called SmartWater.
SmartWater is the most highly accredited company of its type in World, working closely with and trusted by both European and US Government agencies. We create millions of datasets in a liquid or solid format, which can either be embedded within a component or directly onto its surface, thereby providing it with a unique weather and fire resistant ‘forensic’ signature.
It was noted that thousands of bolts passed along conveyor belts prior to packing. Consequently, a ‘robot’ arm with a misting head was inserted that sprayed every bolt with a unique forensic signature, assigned for the exclusive use of the OEM.
The minimal costs and no disruption of the production process, with a distinctive ultraviolet indicator was added for easy onsite detection.
Later on, the OEM decided to change the formula every production run, a simple process, so that the production data could be recovered, even years after the bolt had been fitted.
In future, should a similar claim arise, SmartWater scientists could inspect the bolt and, through forensic analysis of the smallest speck, determine within hours whether or not it was genuine and, if it was, recover all the production data. If challenged, the scientists would provide expert testimony in a Tribunal or Court in support of the OEM.