The Role of Anti-counterfeiting Technologies in Securing Supply Chains

From knock-off fashion accessories to fake mobile phones, automotive parts and pharmaceuticals, counterfeiters manufacture and sell inferior goods using another company’s trademark, brand name, logo or appearance. Benefiting from rapid developments in technology, these organizations use sophisticated means to duplicate items, making it quite difficult for customers to identify the true source of the products they purchase.

Counterfeiting is a serious crime punishable globally by fines that may run into millions of dollars and imprisonment of up to 20 years. Despite this, the counterfeit industry continues to cost the world economy hundreds of billions of dollars each year.

The Organization for Economic Cooperation and Development (OECD), an intergovernmental economic organization for world trade, estimates that trafficking in counterfeit products accounted for USD 250 billion in 2007⁠⁠ — approximately 1.95% of international trade. According to the International Chamber of Commerce, counterfeiting was a USD 600 billion business in 2011, amounting to 5% – 7% of global trade.

In a March 2019 report, OECD stated that trade in counterfeit and pirated goods has risen steadily in the last few years, even as overall trade volumes stagnated. According to the estimates, counterfeit trade currently stands at 3.3% of global trade.

Counterfeiting organizations are often linked to other organized crimes such as drug cartels, money laundering and exploitation of child labor. Even as law enforcement agencies increase efforts to shut down the illicit business, statistics point toward continued exponential growth in the sale and manufacture of counterfeit goods worldwide.

The need for effective risk management in the supply chain

  • China is estimated to account for 78.5% of the total counterfeit market, and along with Hong Kong, continues to be among the biggest origin countries for pirated goods.
  • Footwear, clothing, leather goods and electrical equipment are the top product categories targeted by counterfeit organizations.
  • Counterfeit and pirated products continue to follow complex trading routes, targeting certain intermediary transit points in supply chains, especially in countries where ports are not secured.
  • In 2016, up to 6.8% of EU imports comprised of counterfeit and pirated products. This amounts to as much as €121 billion.

Although it affects every product category, counterfeiting is more accentuated for businesses with a globalized supply chain. Supply chain management at large corporations can involve hundreds of links with each of those susceptible to intrusion by counterfeit organizations.

Counterfeit items can enter legitimate supply distribution chains at a number of points — the various component manufacturers, suppliers of raw materials, offshore assembly units, transportation, and even the retailers.

If not checked for quality, sources, proper delivery and authenticity throughout the supply chain, high-quality products may get replaced by cheap knock-offs at any point most convenient to counterfeiters.

As laws differ in countries, a manufacturer could potentially leave their product open to counterfeiting at any point in the supply chain when they target a market in a developing country. The market is characterized by businesses working with governments to reduce counterfeit trade. Preventive measures such as penalization, customs laws, and civil remedies work to some extent but fail to significantly reduce the problem. Often, in developing countries, regulatory authorities are ill-equipped to correctly identify original products from fakes.

There is an undeniable need to develop a far-reaching strategic approach to counter such criminal efforts with a multidisciplinary response and the active participation of a wide range of actors, each with their own expertise and specific areas of work.

The role of technology may offer significant contributions to step up deterrence and curb counterfeiting. The two most common technological solutions that companies employ are product authentication and track-and-trace systems.

Product authentication

Authentication methods allow customers to identify whether the products they’ve purchased are genuine or counterfeit. This usually involves assigning security holograms, QR codes and unique numbers or patterns to each product after the final quality check at the manufacturing unit. Scanning the unique code on their smartphone allows the customer to verify the genuineness of the product while informing the manufacturer about its successful sale. Security holograms for authentication can be found on nearly all credit and debit cards.

Track-and-trace systems

Track-and-trace systems are designed to help manufacturers identify faults in their supply chain. As the name suggests, these systems allow manufacturers to track product journey along the entire supply distribution chain from the production unit to end-customer, and customers to trace the products back to their original source.

Smart QR codes (in the form of labels or holograms) are assigned to each product. These are then scanned at every link in the supply chain using either specialized devices or smartphones. Failure to scan the right code on the right product reflects immediately in the supply chain database and allows the manufacturer to identify the point of failure and take appropriate action. This dramatically reduces the chances of intrusion by counterfeit organizations into the legitimate supply chain.

Added benefits

Anti-counterfeiting solutions such as track-and-trace systems allow manufacturers to not only keep track of their inventory at all stages of distribution but also make it easier to manage rewards and build customer loyalty. For more information on this, click here.

Conclusion

Counterfeiting is an exceedingly complex phenomenon. Legal deterrence like fines and imprisonment work to reduce the spread of fraud but do not eliminate it entirely.

With the global counterfeit industry on the rise, companies must take advantage of technological solutions to fight counterfeit. Some of the most effective methods include product authentication methods and track-and-trace systems.

While immensely effective in nearly eliminating the intrusion of counterfeit goods into legitimate supply chains, these solutions also offer added benefits such as comprehensive supply chain management, reward management, and loyalty-building.

For more on supply chain security, click here. To find an ideal track-and-trace solution for your business, click here.

Why counterfeiting diminishes the chances of foreign direct investment?

The world is a global village as there is a high interdependence of countries on each other in different fields. From world-wide-web to culture, technological innovation to trade, military alliances to transport there are many scenarios in which the world seems to function as a unified whole.

Among the above-mentioned aspects, trade and investment play an important role in the economic development of countries. Of late, Foreign Direct Investment (FDI) has become quite important for third world countries when it comes to their economic development. FDI impacts the economic growth of the host country (a country in which investment is done) through the transfer of new technologies, organization of human resources, increase in employment, linking of global markets, the rise of infrastructure and much more.

However, the rise of counterfeiting can damage the FDI prospects of a country and its potential to create valuable innovation centres. FDI is important for both advanced and emerging economies to increase their productivity and output. Lack of intellectual property rights and anti-counterfeiting measures diminish the chances of FDI. In India, the industries most impacted by lack of FDI due to counterfeiting include equipment manufacturing and pharmaceuticals.

The total reduction in FDI due to counterfeiting and piracy is quite harmful to aspects like employment, infrastructure and socio-economic development. Countries are sceptical of investing in prospecting countries with weak IP laws as it may lead to counterfeiting of their products, theft of their technologies, reduction in their profits and damage to the brand image.

With the implementation of stringent regulatory measures and anti-counterfeiting technologies, duplication can be prevented to a large extent which will further brighten the chances of foreign direct investment. For ensuring impeccable security against counterfeiting it is must that supply chains must also be secured. A comprehensive outlook towards anti-counterfeiting guarantees the economic development of a country.

If you require customized anti-duplication solutions for securing your products and supply chains, then call us on +91–785-785-7000 or mail us at connect@holostik.com

How counterfeiting tarnishes the brand’s image?

There has been a humungous growth of fake brands in different industries. From counterfeit apparels to spurious medicines, fake footwear to duplicate watches the list seems endless. According to Global Brand Counterfeiting Report, “The amount of total counterfeiting globally has reached to 1.2 Trillion USD in 2017 and is bound to reach 1.82 Trillion USD by the year 2020.”

Brands are not just losing millions of dollars every year due to counterfeit products but are also facing many other challenges. Perhaps, one of the biggest challenges faced by organizations due to counterfeiting is the damage to their brand reputation.

Over the past few years, the proliferation of fake goods has bought a major change in consumer buying behavior. According to sources, a large number of consumers are less likely to buy products from a brand if its reputation has been tarnished due to counterfeit goods. Even in the e-commerce space, consumers are less likely to buy products from websites that have earned a bad name due to counterfeiting.

Counterfeit products have a direct impact on the confidence of the consumers buying a brand. A large number of consumers who have purchased fake products unknowingly never buy the same product again and tend to switch over to another brand.

If a consumer is duped into buying a fake product and later discovers that the product is not worthwhile then it leads to a blow on his confidence in the product and the brand. Moreover, such brands are more susceptible to negative word-of-mouth publicity.

So, if a consumer receives a fake product then there are high chances that the genuine brand and manufacturer may earn a bad reputation.

In the online space, customers leave negative reviews for such brands which jeopardize their reputation. This sometimes creates a false narrative that even brands manufacture low-quality goods. Regular news related to counterfeiting of a specific brand can create an assumption in the minds of consumers that the brand is not serious regarding duplication and is not taking stern measures against counterfeiting.

However, companies across the world are now taking serious measures against the problem of counterfeiting. The online retail giant Alibaba which has earned a bad repute for counterfeit products has made a task force to handle counterfeits on its platform. Besides organizations have also implemented different anti-counterfeiting products and solutions to secure their products and brand.

Holostik provides tailor-made anti-counterfeiting products and solutions which help in securing the product and the brand’s image from the problem of counterfeiting. If you are facing the problem of duplication call us now on +91–785-785-7000 or mail us at connect@holostik.com.

What is the importance of smart security labels in packaging?

Companies across the world use security labels to secure their goods from tampering, duplication, and diversion. Smart security labels not just help in determining the genuineness of the product but also helps in safeguarding the company’s brand image, the health of consumers and most importantly decreases the risk of lost revenues.

In addition, smart security labels also help in implementing different IT-enabled solutions in the supply chain. Smart security labels encompass a wide variety of functionalities that help in protecting high-value goods or items which are highly susceptible to counterfeiting such as pharmaceuticals, electronics, and consumer goods. The different security measures can be overt, covert or forensic.

Security labels also act as the first communicators for the company and the brand. These labels are meant to provide first-hand information related to the brand and the product. In today’s market dynamics security labels help in leveraging the value and security of the product. It also adds to the aesthetic appeal of the product’s packaging and helps in enhancing the value of the product on the shelf.

Holostik is one of the largest manufacturers of security labels in India. The anti-counterfeiting company not just makes different types of security labels but creates an identity that effectively reflects your brand to your customers and protects it from tampering, adulteration, and counterfeiting. Holostik not just makes product protection much more secure for its clients but also makes it impossible to copy or replicate the security label.

Different kinds of labels offered by Holostik include FMCG labels, pharmaceutical labels, label on label, automotive labels, high-security labels, in-mould labels, lubricant labels, Tyvek label, beer labels, tags, apparel tags, scratch label, educational certificates, holographic scratch, breakable vinyl, transparent, adhesive side printing, Tyvek (non-tear able), scratch labels, fibre paper labels, in-mould labels etc.

To get the best-customized smart security labels, call us on +91–785-785-7000 or mail us at connect@holostik.com.

How organisations can benefit from track and trace technology?

There are numerous instances when organizations can do nothing about situations like theft, robbery, fire, etc. All they suffer is the irreversible damage caused to them. It takes years and sometimes decades to recover from that loss.

However, companies can take different measures for security and safety. Besides they can also secure their supply chains. With the mammoth development in technology new cutting-edge measure is being adopted by the company across the world. Nowadays companies can effectively monitor and manage their supply chains and can look out for any loopholes with exact accuracy.

One of the major threats faced by organizations across the world is that of counterfeiting. Duplication or counterfeiting can take place at any stage of the supply chain. The supply chain of a company encompasses different stages; therefore, it is challenging to monitor each of them. In addition, it is not possible to check individual errors or problems in the supply chain.

Lately, different kinds of technologies are being used to fight the menace of counterfeiting or duplication along with the management of supply chains. The combination of IT technology and holographic technology is being used by organizations across the world. A recent example is the bar codes and QR codes along with holograms which helps to perform multiple functions including track and trace, supply chain management, reward management, inventory management, marketing management among others.

Digital authentication with a QR code or barcode takes place on the single product, pack, case and pallet level. Different and unique QR codes are difficult to copy and provide impeccable security on each level of the supply chain. Holostik is a frontrunner of anti-counterfeiting solutions and caters a plethora of holographic and digital authentication solutions for safeguarding the supply chains. The security holograms along with digital authentication solutions help in providing a multi-layered security approach  to the product and the organization.

To get the best track and trace solutions call us on +91-7857857000 or mail us at connect@holostik.com.

Fake currency mastermind caught in Prakasam district, Andhra Pradesh

Recently, Police nabbed a government employee from his residence in Chirala town or Prakasam for allegedly printing and circulating counterfeit notes.

The accused has been identified as David Raju who is a junior assistant at Chirala RTC depot. Recently two vendors were arrested for possessing fake currency with a value of around Rs 3 lakhs. However, cops said that they did not print the cash and were only circulating them.

After further investigation, they revealed that they did not print the cash and were only circulating them. Based on the information provided by the two it was found that Raju was behind the whole racket. Fake currency worth Rs 13 lakh was confiscated from Raju with the equipment used for printing.

Raju was mostly printing notes of Rs 100 or Rs 50 and slipped the notes between the two original notes so as to avoid suspicion. Later he sold fake currency worth Rs 3 lakh for Rs 30,000. As per officials, Raju has been sent to judicial custody.

Source: TOI

Robust flexible packaging product: Holographic Shrink Sleeve

Among the many flexible packaging solutions, holographic shrink sleeves have gained immense popularity. Shrink sleeves are being used in different industries which include beverages, food, dairy, cosmetics, detergents etc. Shrink sleeves offered by Holostik are known for their holographic properties.

Shrink sleeves have become popular because they reduce in size and conform according to the shape of the container and become a sought of the sleek label for the product package. Shrink sleeves can include customised artwork and security printing which make them robust security packaging solution for a wide variety of products.

Let’s discuss the five major reasons which make shrink sleeves and ideal packaging solution:

  1. Shrink sleeves provide 360-degree branding for the product

Shrink sleeves can be wrapped around the entire packaging container and provide a 360-degree exposure to the brand name. The 360 branding holds an important place in marketing the product efficiently. Shrink sleeve helps the brand to showcase it in the best way- irrespective of the position.

  1. Can be used for all type of containers

One of the best quality of shrink sleeve is that it can be applied to containers of different shapes. Its property of adjusting to the shape of the container on the application of heat makes it an ideal packaging solution for different bottles and containers.

  1. The benefit of holography in shrink sleeve

A complete holographic shrink sleeve or the presence of holographic strip on it can act as a perfect anti-counterfeiting solution for the product.

  1. Eco-friendly containers

Shrink sleeves are one of the best eco-friendly products in the packaging industry. Shrink sleeves help in keeping away the adhesives and other harmful chemicals. The use of shrink sleeves causes minimum wastage.

  1. Effectively resists wear and tear

Shrink sleeves have become popular in the packaging industry as they can easily withstand all forms of wear and tear.

Counterfeits are losing sales and business in UAE

The number of counterfeit items has dropped down after Khaleej Times took a joint initiative against the presence of counterfeit goods at different locations like a raid on Karama shops.

Abdul, 40 who owns a shop for ladies’ bags and purses in Karama said that that he has faced a setback in his business. Earlier when he had opened the shop, he used to make Dh2,000 but now he makes only Dh100. Sometimes he is not able to sell a single item.

This is the third time he had opened a shop in Karama. Five years ago, the authorities had fined him Dh50,000 during a crackdown against fake products.

“After paying that hefty fine with great difficulty, I closed down my shop and went back to India for a few years.”

He further said that after paying the big fine he closed down his shop and went back to India. On the rising issue of fakes, he says, “Many years ago people used to display fake items at the counter but now they are hidden underground or inside secret basements. Many tourists still come to buy fake products they do not mind buying a copy.

Ahmad Almheiri, senior manager of the business protection department at the DED, said: “If they are selling in a secret apartment, it means they know that the DED is always in the market and that it’s hard to sell counterfeits in Dubai.”

Source: Khaleej Times

Counterfeiting on the global level-An overview

Counterfeiting or duplication is a growing problem across the world. It badly affects the government, businesses, and consumers. People across the world are suffering from the menace of duplicate products which is regularly authenticated by different reports and news coming from different parts of the world.

Market experts believe that the growing globalization is the main reason behind rampant duplication. They say that in order to increase their manufacturing capacity and hire cheap labor big companies shifted their base to developing and third world countries. However, the major problem in these areas was that of lack of anti-duplication regulation and poor IP laws.

This made the way for counterfeiters and they were easily able to steal technology to manufacture duplicate goods. With the passage of time, they became more organized and took counterfeiting on a much larger scale.

According to a report by OECD (Organisation for Economic Co-operation and Development) United States, Italy, France, Switzerland, Japan, and Germany are the hardest hit countries, with the majority (83%) of fake goods originating (not surprisingly) from China and Hong Kong. European brands are among the most impacted, with an estimated 5% of all goods imported into the European Union (EU) being fake. This represents as much as $118 billion.

With the growth and penetration of internet technology counterfeits are now being sold on different internet platforms. According to the International Trademark Association, “Criminals prefer to sell counterfeits on the Internet for many reasons. They can hide behind the anonymity of the Internet with the Dark Web even their IP addresses can be hidden. The Internet gives them the reach to sell to consumers globally-outside of the national limits of law enforcement.”

The global problem of counterfeiting must be addressed on multiple fronts with collaborative efforts of the government, industry players and anti-counterfeiting solution providers.

New invisible nano ink may help in preventing counterfeiting

Duplicating and counterfeiting of goods is a growing problem across the world. Different anti-counterfeiting measures like printing barcodes or holograms can prevent counterfeiting of products.

Now nanotechnology may provide a solution to get rid of the menace of counterfeiting. The technology depends on the changes that happen in nanoparticles when subjected to certain conditions. These changes can be easily identified but the technology is difficult to copy or replicate.

Recently, researchers at the Advanced Polymer and Nanomaterial Laboratory (APNL) Tezpur University have developed a new, light emitting nanocomposite-based ink that is not visible under light but can be detected when kept under an ultra-violet light. The ink is quite useful in preventing counterfeiting on paper and plastic.

Niranjan Karak, Group Leader of APNL said, “The nanocomposite has an intricate structure to prevent imitation. By dispersing it in organic solvents like xylene, it transforms into an ink that can be used to mark a label. The liquid appears pale-yellow under visible light and glows with a cyan tint when exposed to UV light of specific length.”

The performance of the ink was tested by writing a few letters on paper and plastic. It was found that the letters were not visible in daylight, whereas when kept under UV light, it glowed with a cyan hue.

For convenience the ink can be loaded into the refill of a sketch or gel pen and has a shelf life of up to ten years and degrades in a few months only under the action of soil microbes.

Source: thehindubusinessline