Serialization Isn't For Everyone - But Should it Be?!?

Serialized products have been around in many industries for decades. Examples of products that have been produced using serial numbers are Cars (the VIN), TV's, Computers, Cellular Phones (IMEI), Airplanes etc.

In general, the serial numbers have been deployed in order to link various things to the end product, like raw material and intermediate components, service contracts and events, owner details etc. etc. Very few of these have been used to help reduce counterfeiting.

Not until the recent wave of regulatory statements and legislation, has serialization been used as more of an offensive weapon. Across the pharmaceutical industry, global government agencies have created various forms of relatively similar legislation, generally based around GS1 standards (although there have been a few exceptions) and mostly targeted at assisting the fight on counterfeit pharma. With many $billions of lost revenue annually and 100,000's of people affected or killed by drugs made from poisonous materials or containing poisonous inks and hand painted and packed into copy cartons.

But why is this just a pharma problem? The simple answer is; "It isn't!!". Pharma though, is high profile, drugs are supposed to help people, not kill them!

Some very high profile incidents drove the legislation forwards.

Numerous industries are losing $multi-billions per year to counterfeit items. In fact, in 2016, only 2% by value of goods seized by US Customs were counterfeit pharmaceutical products. The top industries affected globally by fake goods are; Footwear, Clothing, Leather Goods, Electrical Equipment, Watches, Perfumes/Cosmetics. Toy and Jewelry all being seized at higher levels and with generally higher street value than pharma.

The top geographic markets affected by a broad spectrum of counterfeit products are, not surprisingly, mostly in the top tier of the economic powers; USA, France, Italy, Switzerland, Germany, Japan, South Korea and United Kingdom. I'm not going to discuss the sources of most of the counterfeit goods in this article - but they are the usual suspects.

So, its time for the world to mobilize and widen the fight. To do this, no real further legislation is needed, although a nod from the World Trade Organization might help. The world of international commerce has everything it needs already to create a solution to fight counterfeit product entering the market and making it to the consumer. Further, the means for the consumer to verify their purchase is genuine is (or can be easily delivered) to their cellular phone - a ubiquitous technology these days generally with superb camera capabilities.

The coding and printing of Global Trade Item Number (GTIN), Serial Number and some or all of Manufacturing Date, Expiration Date or Batch (Lot) Number in the form of a machine readable ECC200 data matrix onto Tamper Evident Labels, Product Cartons or Bottles facilitates the core of the process. The data can also be stored on a 'hidden' NFC chip if required. If tracking of the product through the supply chain is required, then the association of unit serials to a Transport Shipper or even Pallet level is required, then this can be achieved easily too and is known as 'serial aggregation'. The data from production must be stored securely, but also be accessible to trading partners or consumers, depending on the item in question.

Providing a mobile application to consumers gives them the ability to scan the data-matrix in store using their phone camera or, if it was an on-line purchase, scan upon receipt at home. Both of these allow the consumer to self-verify the authenticity of their purchase. This technology gives the consumer instant feedback, but also alerts the brand-owner to an event location and allow them to react and analyse the product path to the Point of Sale.

A more 'industrial' approach, similar to that used in Pharma to manage warehouse returns and product transfers, will allow the distribution supply chain partners to verify or audit their inventory upon receipt or periodically - perhaps as part of a cycle count.

Essentially, by adopting similar structures to those deployed in pharma, other industries are able to leverage the developments and deploy relatively quickly. This makes the approach attractive and Xyntek, along with its key partners has all the technology and systems required to meet the needs of all companies affected by counterfeited product.

Xyntek also offers comprehensive consulting services to review your counterfeiting issues and determine an appropriate response to meet your needs.

Ian Parsonage

Senior Director, Management & IS Consulting

More information: ianp@xyntekinc.com or sales@xyntekinc.com

#serialization #counterfeit #WTO