NFC security seals and smart labels are becoming increasingly popular supply chain tools. In this post, we discuss what they are, how you might use them, and where blockchain can help increase supply chain integrity even further.
NFC security seals have become a common sight in today’s supply chains. They are devices that allow operators and end-consumers of products to detect instances of tampering during transit.
Seals can take a variety of forms. Fixed length plastic seals, for instance, are often used for security truck shipments. The plastic seal ties the doors closed, preventing anyone from tampering with products inside.
Security seals can be “indicative”. Unlike regular seals (which employ material strength to prevent tampering), indicative seals are easy to remove but simply indicate that tampering has taken place. For instance, seals on pharmaceutical products take the form of a peelable piece of plastic on the top of the carton. These rip in such a way that makes replacement afterwards impossible.
There are also high security seals that meet ISO-17712 standards. These are usually deployed on ocean containers, long-haul trucks and rail cars. Like security seals, they rely on the high strength of the materials they are made of to protect consignments of goods.
Authenticity labels are tools that allow companies to protect the genuineness of their products during transit. The label usually takes the form of a small iridescent square that displays the company’s logo differently, depending on the angle from which the end-user views it.
Companies use authentication labels because they are hard to operate. They can either be overt – meaning that they are clearly stuck on the side of products. Or they can be covert, meaning that end-users can only detect them by opening up products or shining special lights on them.
Most providers of authentication labels use holographic label technology. The special printing techniques require expensive machinery, which makes it hard for criminals to replicate. It’s a flexible and relatively easy option that companies can use to maintain the integrity of their products after shipping.
However, both physical seals and holographic printing technologies have serious weaknesses. If the product targeted by counterfeiters is an expensive or very popular one, even the most complex seal would be worth forging. While when using special invisible inks it must be taken into account that only the outside packaging can be authenticated, but what if its content has been replaced?
NFC (near-field communication) stickers are labels that provide information about a product or shipment when they come into range of a scanning device. In the global supply chain, they are an essential technology. While they do not have any power supply of their own, they can communicate important information about a product to operators with near-field transmissions. Companies use this technology for traceability and inventory purposes
NFC stickers have many applications both inside and outside the conventional supply chain. Outside the supply chain, you can find NFC tags in smartphones, next to bus stop ads, on stickers in shops and in certain NFC-enabled business cards. Within the supply chain, brands will often enable NFC tags inside individual products or pallets at the aggregate level.
NFC stickers are helpful to supply chain companies for many reasons. First, they provide a more secure way of giving products an identity than simply putting a label on the exterior packaging. Manufacturing products with stickers in hidden locations prevents label tampering and manipulation.
Labels with NFC chips are also helpful because they make it easier to store production data. Instead of printing large labels with production dates, serial numbers, batch numbers and so on, NFC stickers condense that down to a much smaller area.
Lastly, some companies use NFC tags to make their demand planning more efficient. Having an electronic means of determining the content of packs and pallets makes it easier for firms to track their inventory and see when they are over- or under-stocked. It also allows them to quickly correct order mismanagement, preventing inventory issues in the future.
While many suppliers include a certificate of authenticity (COA) with their products, determining whether it is real or not is a major challenge. Valid certificates of genuineness should include documented proof that the article in question is genuine, plus references, explanations and additional evidence.
A certificate of authentication usually takes the form of a seal on paper or a computer version with a license number. While COAs are more popular in the art world, they are finding increasing applications in other areas too, particularly in the world of books, magazines, and computer applications. Usually, COAs include things like the qualifications and the contact information of the people who authored the certificate. This allows end users to contact the issuers to verify its originality.
However, COAs are not foolproof. In recent years, there has been controversy surrounding auction houses’ use of fake COAs. Fraudulent sellers can also produce their own COAs without any contact details. COAs only have value if they provide the full contact details of the issuer. Otherwise, end users cannot verify the integrity of the goods they receive.
Thanks to blockchain, though, there is a solution. And this is to combine this technology with NFC tags in such a way that tampering with shipments and product integrity becomes much more difficult.
The way it works is simple. Companies ship products with blockchain-enabled NFC tags. These tags then provide secure product authentication using messages that change with each interaction. This information then gets recorded on the blockchain securely, without the need for any party to provide an oversight function. End-users can then view an immutable history of the item’s transit as it passed through various parts of the distribution network.
To prevent foul play, Authena developed NFC tags that irreversibly stop communicating when they detect tampering at the hardware level. Plus, their dual state feature makes them usable as physical-digital seals.
This way, consumers can check and verify product opening state, authenticity and ownership via Authena Mobile Apps on their smartphone. Authena’s special tamper-proof NFCs connected to blockchain-based databases make it almost impossible for counterfeiters to pass off inferior products as the genuine article, as they embed a digital COA, secured on blockchain itself.
The adoption of this system is to make it impossible for nefarious actors to sell counterfeit goods – an industry worth an estimated $1.7 trillion globally.