The impact of counterfeit components and LRUs in the navy surface warfare supply chain: A systems dynamics approach

Abstract Microelectronics integrity is a critical issue for many industries including the Department of Defense (DoD). The military systems the DoD operates are particularly vulnerable to counterfeiting, with potentially costly or even catastrophic consequences. Counterfeits, regardless of production intent (malign or ersatz), raise significant concerns for industry and the DoD because they often demonstrate operational performance shortcomings, have lower reliability, or make components or organizations more vulnerable to attack. This article uses a systems dynamics modeling approach to explore the economics of counterfeiting for a sample system, the interactions between counterfeiters and the US Navy supply chain, and the impacts of counterfeit surveillance and detection to address the question: Is it more effective to target detection efforts at the component level or at the Line Replaceable Units level? A case study of an engine control module for the LM2500 propulsion turbine used on US Navy Arleigh Burke class guided missile destroyer (DDG‐51) platforms is provided to demonstrate the approach.