Manufacturing is the driver of the global economy, with manufactured goods worth approximately $5.17 trillion. In the U.S., manufactured goods make up more than 60 percent of exports, with monthly exports topping $60 billion. Thus, a threat to the manufacturing industry is truly a global threat, with counterfeiting at the top of the list. As counterfeit goods and parts continue to flood the marketplace, everyone – from manufacturers to consumers – is under attack.
Counterfeit manufactured goods seizures have risen 125% in the past five years, with 80% of the increase occurring from 2005 to 2006. Beyond the financial losses to legitimate makers, there are also grave safety issues associated with this crime, with fake aircraft, automobile and other manufactured parts threatening the vehicles we rely on every day.
Areas of Concern
Genuine Parts
The counterfeit parts incidents that have been reported are shocking in their brazenness and disturbing in their possible outcomes: exploding cell phone batteries, brake pads made of saw dust, old aircraft engine parts made to look new. These threats and more have forced manufacturers to protect their parts through the use of on-part serial numbers, copy-resistant packaging and certificates of authenticity. Often times, these techniques simply add another step in the counterfeiting production process, rather than hindering the ability to produce and sell fakes. And while “insisting on genuine parts” is the mantra of every car manufacturer and aftermarket parts supplier, buyers tend to insist on lower prices when making a purchasing decision. To eliminate the flow of counterfeit parts to the assembly line and the service supply chain, manufacturers need additional layers of security to enable verification of manufactured parts authenticity throughout the value chain.
Software Piracy
With over $7.3 billion in pirated software in use in the United States currently, piracy is a very real threat to companies that manufacture computer software. Associations like the Business Software Alliance (BSA) have been bringing the battle to the companies that are often responsible for using pirated software, knowingly or unknowingly. That approach is largely targeted at license violations rather than the sale of counterfeit software in the black market. It is important for software producers to continue to evolve their anti-counterfeits methods through packaging, seals and copy-proof certificates of authenticity.
High-Value Consumer Goods
Counterfeit goods seizures have risen 125% in the past five years, with 80% of the increase coming from 2005 to 2006. New distribution models driven by the Internet economy have also created myriad opportunities for fraud, as buyers seek lower cost goods from any available source – legitimate or not. While stopping counterfeiters is a complex problem, a host of security techniques have been employed in an attempt to impede their efforts. Unfortunately, the vast majority of techniques used are either too costly or complex to effectively blanket the marketplace. The result is consumers and other lower members of the value chain are left with little or no means of verifying the authenticity of the goods they purchase.
Outlook
Globalization has opened up new challenges for companies looking to defend their products, their brands and their business. The manufacturing industry has been at the forefront of adopting new techniques to stem the tide against counterfeiters and crooks, but have only had limited success and have produced little lasting benefit. Truly conquering counterfeiting requires a mix of physical supply chain security, safeguarding of intellectual property, education of the entire value chain on potential dangers, and the continuing deployment of security technology that can protect goods and parts as they make their way to their final destination.
AuthentiGuard On-Demand Can Help
AuthentiGuard-On-Demand is a sophisticated print security technology that combines the benefits of copy and tamper protection with the ability to conceal sensitive data within printed documents. Utilizing standard desktop and commercial printers, the solution provides for the dynamic delivery of comprehensive protection to documents that verify the authenticity of manufactured goods and parts, defending companies and consumers from the dangers of counterfeiting.