By Renaud Anjoran
Supply chain security is a concern for many companies. Here are a few examples:
• Famous brands have to fight counterfeits
• Many products are stolen during transportation and warehousing
• Some distributors sell beyond the territory they are allowed to cover.
I had the opportunity to ask a few questions to Hugo Garcia-Cotte, CEO of Cypheme, a company that helps control what really happens in a company’s supply chain.
Question: How can a company use microstructured paper tags to control if products are fake along its supply chain? How does it work?
Concretely, we partner with the customer’s factory to produce paper seals using our technology. Every seal’s unique microstructure is stored in our database.
Seals can be affixed to products and shipping cartons. Anyone along the supply chain or even the final customer can use a smartphone to analyze the microstructure fingerprint of those seals and know if they are genuine.
Question 2: What are the main risks during transportation and warehousing of expensive products? How to control this?
Truck drivers don’t earn much. The same applies to warehouse managers. The main risk is that a corrupt employee steals a legitimate carton full of legitimate goods, duplicates the tracking QR code on the carton, and replaces it with a box full of counterfeited goods.
This box will be tracked and followed like a legitimate box would, and nobody will notice.
This scenario is not science fiction. Major retailers such as Walmart experienced this problem — up to 10% of a certain category of products where counterfeit in their supply chain.
Tracking is not enough, though. A strong supply chain needs real security.
Question 3: What are the main risks regarding exclusive territorial sales agreements? How to control this?
Pricing strategies are often different in different territories, because of local taxes, regulation, etc.
Without a high security tracking system, you never actually control your supply chain. The idea is the same as described above — a company can go to a store, pick up a product it has made, and identify which batch it comes from (and to which distributor it was sold).
Question 4: Can a company use QR codes or RFID tags to reach these objectives? What are the downsides of these technologies?
QR codes are a good tracking tool, but they are not a viable security option. In the shipping carton example, the QR code is diverted to track a fake crate of goods instead of a genuine one. There is no actual security.
Sometimes people use one-time QR codes as a anti-counterfeit measure. Indeed it is effective. But then, it can only be used by the final customer after he has purchased the good… Which kind of defeats the purpose of anti-counterfeiting.
Low security RFID tags are read-write devices, just like QR codes. Only high security RFID tags (those used in passports) are an efficient anti-counterfeiting measure, but they cost at least one dollar to produce.
Cypheme is as secure as a RFID tag but much cheaper to deploy.
Renaud Anjoran has been managing his quality assurance agency (Sofeast Ltd) since 2006. In addition, a passion for improving the way people work has pushed him to launch a consultancy to improve factories and a web application to manage the purchasing process. He writes advice for importers on qualityinspection.org.