Supply chains are constantly at risk — from theft, diversion, product substitution or insertion of counterfeit products. Traditionally, these threats have been addressed with physical security systems such as tamper-evident packaging or labelling, locking containers, security cameras and similar technologies.
But today, cloud-based brand protection platforms and supply chain security software can provide a much deeper level of insight into the path materials and products take though the supply chain and any actions that don’t fit with approved supply chain processes. In fact, cloud-based serialization platforms are emerging as the best way for brand owners to increase visibility across the entire life-cycle from suppliers, manufacturing and distribution to the end-user to maintain a high level of safety and security.
When evaluating a brand protection platform, keep in mind that the platform is only as good as the information feeding into the system. A typical brand protection platform integrates information from multiple systems including enterprise resource planning (ERP) software, warehouse management systems (WMS), third-party logistics providers (3PLs) and security printers.
By creating centralized access to supply chain “big data” and tools for authentication and traceability, organizations can more easily identify, reduce and potentially eliminate a wide variety of issues plaguing brand owners including counterfeiting, diversion, warranty and return fraud, recalls, manufacturing overruns and more. With that in mind, let’s take a look at the elements that feed into a brand protection platform and the benefits of the platform as a whole.
Identifying, Tracking & Authenticating Items within the Supply Chain
It’s critical to have real-time information about the items travelling along the supply chain. In other words, items, or groups of items (containers or palettes) need to be tagged in a way that allows them to be followed through the system. This is serialization.
- Serialization refers to identifying items with numbers or codes, typically barcodes, data matrix codes or alpha numeric codes. We call it secure mass serialization when every item is uniquely identified by codes that are unpredictable and when access to those codes and the code schema is restricted.
- Serialization creates a baseline for tracking products that “fall off” the supply chain, or if new products mysteriously arrive. It works with advanced data-driven traceability software that stores and interprets information about the items in the supply chain, like whether or not the items that arrived at the destination were on the shipment originally sent.
Serialization serves as the core foundation for two larger objectives — traceability (the tracking of an item’s planned or historical path to create an item history) and digital item authentication.
Traceability software is used to capture events and business transactions to record a chain of custody for each item, group of items or shipment. This creates visibility beyond a brand or manufacturer’s four walls. When used with secure mass serialization tags, an organization can implement item-level traceability which tracks every individual item moving through the supply chain.
Traceability software also plays an important role in recording unauthorized diversions or insertion of counterfeit goods in the event of a supply chain security breach. Automation tools can alert managers when an item falls outside of the acceptable chain of events, helping brand managers implement changes to the supply chain process to eliminate future similar events.
Digital item authentication
For some brands, being able to trace the movement of a product from point A to point Z is enough. But other brands, such as high value electronics, automotive parts and even pharmaceuticals, are more prone to counterfeiting efforts and fraud, such as warranty or returns fraud. For these brands, digital item authentication can help ensure that products that end up in the hands of an end buyer or consumer are authentic branded products.
As noted, digital item authentication requires secure mass serialization, where unique serial numbers are attached to individual items and checked against a secure database of valid serial numbers.
In one example, a leading electronics accessories brand discovered counterfeit products circulating widely across the globe. Consumers were buying these counterfeit accessories both knowingly and unknowingly. Some were attempting to scam the brand through returns fraud, but others were simply attempting to use the warranty for a product they didn’t know was fake.
Brand managers wanted a way for their own service teams, partners and even customers to easily identify genuine products from the fakes. This would cut down on the time and effort spent trying to service fraudulent products, and could eventually decrease the value of counterfeiting the brand to begin with. They used secure mass serialization to support real-time digital item authentication.
Now that each item has its own individual imprinted code, customer service teams can authenticate products within an ERP database, helping to streamline operations for warranty and returns work on authorized products. Plus, real-time alerts and analytics have helped brand managers pursue brand protection and enforcement activities against counterfeiters.
Only months after implementing a Verify Brand brand protection platform, the company reported raids on 162 retail stores worldwide with nearly 30,000 counterfeit items seized. In addition, 39,000 counterfeit items were removed from digital channels, estimated at a value of $1.3 million — revenue that could now go to the brand instead of the fake. Service work was also improved through easier identification of fakes.
Brand protection platform benefits
Both traceability and digital item authentication solutions exist in the market today and have been implemented as standalone solutions. But companies are seeing dramatic benefits from the use of a brand protection platform that integrates information from multiple solutions to provide alerts, analytics and reports. In fact, integration can provide exponentially deeper data, which leads to better insights and improved anti-counterfeiting and fraud results.
A good brand protection platform should be a foundation for all movement of goods and data access. It should:
- Allow integration with traceability and digital item authentication solutions, ERPs and WMS systems
- Be accessible from anywhere via laptops and mobile devices, across form factors, through a secure access portal
- Provide access to real-time 24/7 information, alerts and reports
- Track item relationships and hierarchies (like items within a pack, packs within a pallet)
- Offer an enhanced analytics engine to help visually illustrate areas of strength and weakness in the supply chain
- Provide a variety of customizable reporting options based on your business needs
- Support future growth through scalability
- Have a cloud option for ease of use, maintenance and future-proofing
- Offer support for multiple languages and global business requirements
- Align with government requirements for compliance standards
Unlike traditional labelling or coding solutions, today’s tightly integrated brand protection platforms can better protect brands from internal fraud as well. For example, item level serialization helps stop manufacturing overruns by individually identifying each item with an unpredictable code and issuing those codes in a controlled and documented manner. Individuals trying to game the system through manufacturing overruns have no access to the unique codes needed to be applied to these items. This helps to deter overruns by creating a system of recording what happens within the facility, much like a video camera deters unauthorized activity by documenting events. With access to alerts through the centralized platform, managers can quickly identify anyone trying to create overruns with fraudulent codes.
Similarly, the system would trigger an alert if a product with a valid code running on a manufacturing line has an item status associated with that same code marked as shipped to a reseller. Having an item status and history helps to track overrun items back to the individual or facility. When brands react and stop this behavior it helps to spread the message that the brand has visibility into manufacturing overruns, in turn discouraging it from happening again. Much of the same process can be used with similar success in stopping grey market diversion.
When evaluating brand protection platforms, it’s also important to know who will interact with the platform. While some brands use it for internal tracking and authentication, others must extend the system to multiple partners, end consumers or even government agencies. Each unique audience has its own preferences for interacting across the system. Make sure that the system is accessible for individuals using smartphones, mobile apps, a secure website, call centers, text messaging applications and other specialized equipment required to check a unique serial. By making the process easy to use, the potential for success increases.
For example, serialization, authentication and traceability help partners, resellers and buyers identify stolen products. Brands that leverage serialization and traceability can match serial numbers from visible products against those known to be on a stolen shipment. Product authentication and traceability information can be used to block the sale of stolen items, help recover stolen items or even identify key trends in theft.
Outcome for Supply Chain Security
A brand protection platform can drastically improve supply chain security when used in conjunction with traceability and digital item authentication. Many brands see results in the short-term but because the platform gathers large amounts of data aggregated over long periods of time, it also improves historical data analysis. Ultimately, this makes it one of the most effective supply chain security solutions for brands, manufacturers and supply chain partners.
Mark Prokosch is a vice president with Verify Brand, a leading serialization, digital authentication and traceability software vendor.