Figures from the UK government published in 2020 show that the annual loss to the economy through counterfeiting and piracy is £9 billion, plus 80,500 job losses each year. Before you click away for fear of more bad news, this article presents a number of solutions for avoiding the risks of counterfeit products to your business and wider supply chain.
Supply chain management plays an increasingly important role in preventing counterfeit goods from entering the marketplace. Here’s what we can do as procurement and supply chain professionals to tackle counterfeiting.
Using Blockchain for distributed data management
Blockchain has become increasingly popular in the business world as its design prevents anyone from changing or deleting a record once it is created. The technology that is currently available makes it near impossible to duplicate which means you can track and authenticate information throughout the lifecycle on a distributed ledger.
Set up end-to-end tracking and tracing processes
Many procurement and supply chain businesses will already have some anti-counterfeiting protocols in place. Widely used tracking and tracing processes include serial product identifiers, watermark technology, smart cards, holographic inks, marks that are only visible under UV light, paper with embedded microfibres that make duplication difficult and so forth.
Work closely with other companies in the supply chain
Working with businesses throughout your supply chain will significantly strengthen your efforts. Establish audit controls, set up a product purchasing program to buy and check random samples, monitor websites for counterfeit sales, and maintain a comprehensive product library of both real and counterfeit products.
Keep in mind that every player in your supply chain will be able to contribute different insights. For example, companies that are closer to the end user should be able to add knowledge about specific local risks.
Involve the end user
Setting up apps for user verification is a simple and highly effective method for identifying counterfeit products in the supply chain. The sender supplies the recipient with a tag or label. The recipient can then verify that the product is authentic using mobile phone scanning technology.
Trademark registration
Most businesses will be on top of trademarking products for intellectual property purposes. But many aren’t aware of the importance of registering trademarks with customs offices. These departments are the guardians of import and export so are very well placed to stop counterfeit goods from continuing their journey through the supply chain.
Increasing awareness across the business
Every employee must undertake training in identifying counterfeit goods as well as how to report any concerns. The training should be structured around the following:
- How to avoid counterfeit products
- How to detect counterfeit products
- How to communicate the identification of counterfeit products
The training and education around this could also extend to suppliers, partners and even customers if appropriate. The more people that know about how to avoid, detect and report counterfeit goods the more likely they are to be excluded from the supply chain.
It’s not always possible for businesses to prosecute counterfeiters if and when they are caught. Legal challenges take time and money, after all. But it is important to remember that it is a serious crime to sell fake goods and there are maximum penalties of up to 10 years in prison or an unlimited fine. You can get more information from the Action Fraud website.
We hope you have found these tips for tackling counterfeiting in the supply chain useful. If you are looking to strengthen your procurement and supply chain team to avoid and mitigate risk or digitally transform your business, get in touch. We are connected to some of the top risk-related candidates in the sector and we would love to help.
