IEN: Describe the major security concerns facing industry. How can they be addressed?
Polinski: With the trend over the past several years of companies outsourcing most (if not all) of their manufacturing to lower cost international locations, a rapid increase in global counterfeiting and gray market diversion is being experienced. By outsourcing, brand owners may have found a way to reduce their cost base, but along with that, they have lost some of the control they previously had over the supply chain and distribution of their products.
As more and more brand owners are being compromised with counterfeit or diverted products, many of them are realizing what''s at risk if they don''t react with preventative measures. By leaving their brand names unprotected, brand owners are not only risking profit margins and revenue growth but also their reputation, recognition, customer loyalty, and product liability. (Part of achieving a secure manufacturing environment is storing materials and products that could be used in brand counterfeiting under lock and key, as in the product cage shown here.)
Working against the brand owners are a few additional factors:
- Border patrols around the world have limited time and resources to inspect incoming products for authenticity. Most of their efforts are being focused on more dangerous issues such as terrorism.
- Many consumers knowingly purchase counterfeit, gray marketed, or knock-off products because they''re readily available at discounted prices in both the marketplace and on the Internet.
- The penalties for counterfeiting crimes are very mild and become difficult to enforce when it involves international locations.
To address the rapidly growing counterfeit and gray market issues, an assortment of companies design and offer assistance with identifying and protecting a brand owner''s product and points of vulnerability. This is done with physical product amendments and with Internet monitoring software. In many cases both covert and overt technologies are used in tags, labels, and packaging to create a customized security approach to protect the brand value.
In regard to consumers knowingly purchasing counterfeit products, this becomes more of a social issue where the average consumer needs to be better informed. If consumers are aware that there are numerous cases that link counterfeit products to terrorist and organized crime networks, they may think twice before knowingly purchasing the product. Few realize they could end up helping support a terrorist strike.
IEN: What innovations are in store for users in security equipment and systems, software, training, and other areas?
Polinski: For brand owners who are using (or considering using) authenticity and tampering devices to control their counterfeiting and illegal distribution problems, one thing is for sure . . . nothing is 100% counterfeit or tamperproof. Criminals are capable of almost anything and technology providers and brand owners need to prepare for this. With the advancement of desktop printing, the "bad guys" have access to technologies we would have never thought of a few short years ago. It basically comes down to a matter of time and money before counterfeiters will figure out the latest security device.
As in the past few years, I expect in the future there will be a constant influx of new covert and overt technologies that are difficult to duplicate or mimic. The technologies that will be the leaders are those that are both scalable into production quantities and also cost-effective for the brand owner. The success of a counterfeit protection program is often difficult to measure by a brand owner because it''s hard to get a gauge on the exact size of the specific problem, so cost does still play a role. (It''s important to assure that security precautions are being taken at every level, including the use of visitor badges, as illustrated here, to reduce the chance of providing opportunities for counterfeiting operations.)
In addition to providing new and improved technologies, the manufacturers (and users) of these technologies will need to constantly improve the security levels used in their own production locations. Up until a few short years ago, there were no standards in place for secure product converting. Each converter had his or her own policies and procedures. With the help of the North American Security Products Organization, there is now a set of detailed standards that can be followed to help brand owners gain trust in their secure product supplier(s). (For more on Brady''s NASPO certification, click here.)
IEN: How can companies integrate security technologies with manufacturing operations?
Polinski: A tightly controlled label is an ideal method to integrate brand protection into a product line. In many cases some type of label is already being used for various identification needs, ranging from labels for work-in-process tracking or finished product identification, to tapes and seals used for product packaging and shipping containers. If some type of label or package is already being used with the product, usually that label or package can be modified to incorporate covert or overt features for authenticity control.
Keep in mind, there''s obviously more involved than just designing a new label or package. Supply chain tracking and control of that secure item needs to be set up. In addition, brand owners need to understand and implement the desired policing actions and programs, including any end-user verification requirements.