How policing the ’chain’ gangs became a lot smarter

Nearly two years on from the start of the COVID-19 pandemic, demand for products is at an all-time high, while shortages of workers, components, raw materials, plus transport and logistics issues and disruptions in energy supply have combined to create a perfect storm within the global supply chain.

According to the International Chamber of Commerce’s (ICC) Intellectual Property Roadmap 2020, the COVID-19 pandemic created the most substantial negative supply chain security effect in history.

Supply chain vulnerabilities that have been exploited by nefarious organisations, illegally selling counterfeit goods that are often sub-standard, cheaply made, or even dangerous. A recent test carried out by the U.S. Government Accountability Office suggested that as many as two of every five brand name products available online through third-party retailers may be counterfeits.

Counterfeit products can be divided into two categories – deceptive and non-deceptive. A non-deceptive counterfeit is where consumers can easily distinguish the fake product by its price, quality and sales location.

Deceptive counterfeit products, on the other hand, are often identical to the authentic product in price and packaging but not in quality. These kinds of counterfeit products often emerge when demand outweighs supply and consumers turn to third-party retailers and non-legitimate vendors to find products they can’t source elsewhere.

Counterfeit raw materials can also pose a serious issue. When supply chains are disrupted, reduced availability of raw materials can lead to a rise in counterfeits which emerge to fill the gap in supply.

The creation and sale of counterfeit products may impact a business in many ways – from an initial loss in sales to reputational harm to the legitimate brand and damaged relationships with business partners. These practices also leave legitimate businesses to deal with the fallout from counterfeits and ultimately force these brands to spend time and money fighting the issue.

Collaborative action

The most effective way to combat counterfeiting is a collaborative one, working together to detect counterfeit products, share intelligence, and prosecute offenders. For businesses, a place to start is in ensuring that products are equipped with unique identifiers which can be used to verify that a product is legitimate.

In recent years, countries across the globe have introduced legislation requiring unique identifiers, and product-level serialisation to facilitate track and trace, and stop such products from persisting in the supply chain.

These regulations are supported by databases and systems which facilitate the track and trace of serialised products to allow retailers to check the efficacy of their goods technology that can be provided to partners.

A serialised, smartphone-readable QR or data matrix can also be used to verify the authenticity of a product. Adding a 2D code is cheap, and relatively straightforward – once on the product packaging, a simple scan can direct consumers to a website to verify its legitimacy. Counterfeiters will be unable to create a QR code with unique and valid serialisation capable of tricking legitimate systems into validating it as authentic.

If item-level serialisation is not possible at present, a serialised code on individual boxes or pallets can still facilitate information sharing.

The fight against counterfeits is global and reaches every industry. With industries around the world all facing the same issues with supply and demand, the risk of counterfeit products is more real than ever.

Adem Kulauzovic is director of automation at Domino Printing Sciences

Photo: Firms such as ECSC Group (pictured) are leading the process industries' online fight against cyber and supply chain criminals