Brands and producers want to protect their intellectual property and ensure that their products are safe for consumers. As such, most firms track shipments as they make their way through the supply chain, looking out for signs of foul play.
Unfortunately, identifying instances of counterfeiting is challenging. Bad actors have sophisticated ways of hiding their fraud, making it hard for any individual firm to detect counterfeit activities.
However, as you will discover in this blog, the technology now exists for brands and producers to fight back. Exciting developments in NFC tags and blockchain stand poised to revolutionise supply chain security forever.
Anti-counterfeit technology is any technology (or process) designed to prevent false goods from entering the legitimate supply chain. Firms can apply these technologies at virtually every stage, from raw material suppliers through packagers all the way to end consumers.
Companies do not want third-parties manufacturing low-quality goods and then passing them off as originals. Not only does such action damage brands and eat into revenues, but it is also dangerous for consumers. Counterfeiters rarely offer the same level of quality assurance as official brands.
Traditionally, firms protected themselves against counterfeiting using a variety of methods. Common brand protection practices included registering trademarks (and trademark protection in all countries), registering in China (if operating in China) and monitoring retail locations.
However, these methods were either ineffective, time-consuming, or both. Even with legal tools in place, counterfeited goods were still a real problem.
Technology, though, is coming to the rescue. There is increasing evidence that correct use of the blockchain, NFC tags and so-called “products’ digital twins” can resolve many of the traditional issues brands face.
The type of anti counterfeit solutions you choose depends primarily on the needs of your industry. Not all supply chains are the same. Some are long and complicated and run through multiple countries, while others are just one or two steps. Furthermore, the criticality of anti-counterfeiting technologies varies by industry. Those that sell products that travel inside consumers’ bodies need more robust solutions than those that don’t.
Take agriculture, for instance, the world’s oldest and most important industry. Counterfeited or illegally-produced goods pose a real risk to human health. Pesticide content, heavy metals, and bacterial infestation can all cause damage.
In the past, farmers couldn’t verify the integrity and origin of the products they used. They would have to just trust the process. However, near-field communication (NFC) tag solutions with anti-tampering technology provides a possible solution.
The pharmaceutical industry is another popular target for criminals. Counterfeiters will often try to pass off false drugs as the genuine article by refilling empty containers or using fake labels and QR codes. In some extreme circumstances, they have also been selling fake vaccines to patients.
Again, the solution is to equip drugs with active geolocators or passive NFC tags at the unit level and track them via a blockchain network. This way, firms can track their progress around the world and immediately identify any evidence of tampering.
Keeping products safe as they travel through the international supply chain is a challenge. According to the International Chamber of Commerce, the global cost of counterfeiting and piracy will hit $2.3 trillion by 2022. Thus, companies are losing revenue and brand value on a massive scale.
Product safety is an ongoing battle because firms and fraudsters are in an evolutionary war. Whenever companies implement a new security solution, fraudsters find a way around it. This then provokes firms to develop new technologies to protect themselves against further fraud, starting the cycle all over again.
In light of the dangers of false products, brands are investing heavily in anti counterfeiting solutions. The market has seen a long list of new technologies ranging from printed marketing, holograms, RFID and taggants. However, recent technological advances make it easy for fraudsters to overcome these security measures, rendering them useless. Standard anti counterfeit approaches – such as those used so far – all have critical weaknesses.
In spite of this, there are emerging solutions that are expected to have a long lasting future. We in Authena are creating secure platforms that allow firms to track and authenticate products reliably as they travel around the globe and detect instances of fraud.
We are not looking for a silver bullet. Instead, we are combining multiple anti counterfeiting technologies to create a solution that will make supply chains more airtight. Two big advances are driving progress: NFC tags and blockchain.
NFC tags are critical for reasons already discussed: they prevent tampering, allow operatives to collect encrypted data about products when tapped and ultimately protect your brand. Blockchain is important because it lets all supply chain stakeholders create an immutable record of products data and movement. When operatives read NFC tags directly applied on single products, their devices send information to the blockchain network, creating a permanent record of where the product is, the condition it is in, and where it came from.
As such, the global supply chain stands poised to become more secure and robust against counterfeiting. With NFC-tagged products linked to blockchain networks, legitimate companies will be able to tell if a shipment is fraudulent or not more easily. That, in turn, is going to allow them to authenticate products, detect where the fraud occurred and who is likely responsible for it.
Anti-counterfeiting solutions are not one-size-fits-all. These are different plans depending on the level of security and reliability a firm needs. Food and medical distributors, for instance, need the most rigorous security features to prevent tampering.
Once companies put anti-counterfeiting software into practice en masse, the world will change. Blockchain will make it challenging for fraudsters to pass off the genuine article as their own, and the global incidence of counterfeiting will decline substantially.