Manufacturers Move to Protect Intellectual Property
Blog: Software AG Blog - Reality Check
Counterfeit goods are big business; from fake handbags to drugs and electronics, they cost manufacturers a staggering $1.7 trillion dollars in lost annual revenues.
Counterfeit goods used to be shabby knock-offs of quality products. Fake Gucci handbags were obviously made of plastic or, at the very best, cheap leather. Fake cosmetics made your skin turn red. Fake pharmaceuticals either did nothing, or made you sicker.
Today, counterfeit goods can be so good that you cannot tell them from the real thing. Sometimes that’s because they come from the same factory. In some places, a manufacturing plant can have three shifts – two are for real, the third one is for knock-offs.
Sometimes the fakes come from the people who used to work in that factory. They steal the designs, the schematics and strategic supplies. Or the people that work in the factory teach someone else how to do it and provide them with the original materials.
I recently bought a knock-off NFL football jersey for $18. If I did not know that it was a knock-off I would not have been able to tell. The jersey is exactly the same as the ones they sell at the NFL online store for $89, down to the holographic stickers.
NetNames says that 67% of counterfeit goods are estimated to originate from China. The World Economic Forum says that companies who manufacture goods in China need to take note: “the loss of control over your supply chain can be disastrous.”
The report highlights the need for companies to introduce better and more secure technology to protect their products and monitor the supply chain.
Sharing information sharing is critical to successful collaboration; however, protecting schematics and technology advances from piracy or theft from suppliers will force many manufacturers to make some very difficult decisions.
We believe manufacturers will need to take direct action to monitor partner production outputs, component and materials orders and take a concerted effort to track certified products to quickly identify the root causes of found counterfeit goods. They need monitoring technology for inputs as well as outputs, using the Internet of Things to provide the data.
The WEF authors concluded that supply chain risk management must be able to answer four questions concerning product-level supply chain integrity:
- Does this product come from where I think it did?
- Is it made the way I think it is?
- Did it travel the way I think it did?
- Is it going to do what I think it will?
Only by taking concrete steps to monitor and control every aspect of the production process and supply chain can manufacturers stamp out counterfeiting.
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