Protect your IP & Tackle Piracy
Blog: Software AG Blog - Reality Check
The world’s largest manufacturer is China, which makes everything from low cost commodities to luxury items. China is also the world’s largest source of piracy and fake goods; more than 63% of fakes originate in China.
The obvious issue for manufacturers is that of intellectual property (IP) theft – of the design, materials and production schematics. But who makes these fakes and when? Where does their supply come from?
Producing goods in another country involves outsourcing both machinery and people. Which begs the question, how well do you know your outsourced partner and how well do you know the actual people doing the work? Is there a high turnover rate at key positions? How much access to IP is available? Which people know the entire operation or the suppliers?
The reason fakes today are so good is that they probably come from the same, or very similar, factories as the real things. In some places, a manufacturing plant can have three shifts – two are for real, the third one is for knock-offs. Or, the mid managers at one plant use their experience in production processes, or sourcing, to manage a counterfeit goods production system. But it’s not just business-to-consumer products that need to be leery of this practice, manufacturers of business-to-business products need to be just as wary.
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 (stolen) original materials. And the distribution channels where they can be purchased are also the same channels used to purchase legitimate products.
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.
Only by taking concrete steps to monitor and control every aspect of the production process and supply chain can manufacturers stamp out counterfeiting.
The post Protect your IP & Tackle Piracy appeared first on Reality Check.
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