Counterfeit electrical devices: A costly and growing problem
All well-known products and brands are counterfeited. The counterfeiting of global products has increased by 10,000 percent over the past 20 years. According to IACC.org, the estimated value of global cross-border trade in counterfeit and pirated physical goods is $1.77 trillion as of this writing. In the United States alone, that figure is estimated at $200 to $250 billion and costs U.S. companies 750,000 jobs a year in revenues lost to imitation devices.
While the financial impact on the global economy is staggering, safety is the primary issue as counterfeit electrical products can fail to perform their protective functions. They may also overheat or cause short circuits, which can result in fires, electrical shock or explosions that damage equipment and property and cause personal injury.
Battling counterfeits in the gray market
Sales channels unintended by the original manufacturer, or “gray markets,” rely on the purchase and resale of goods outside of traditional sales channels. And because the products sold usually lack traceability back to the original manufacturer, gray markets pose the highest probability of supplying counterfeit products. Buyers often fall victim to below-market pricing with little or no assurance of product origin or manufacturer warranties.
The nature of the digital world we live in makes the global sale of counterfeit products easy, with online marketplaces and auction houses acting as the preferred channel for many consumers. Some online retailers are taking proactive measures to assure authenticity by implementing processes such as brand registration, however they are not industry standard. Further, websites may boast images of clean manufacturing facilities, but in reality, they might be low-tech, labor-intensive operations that produce counterfeit products in illegal shops and factories.
Counterfeit products were once easy to spot, with lower-quality labels, misspellings, and poor moldings and casings. But today’s nefarious assembly techniques enable counterfeit products to easily go undetected. To that end, supply chain traceability is one of the best ways to ensure the identity of authentic devices built by original manufacturers.
Supply chain traceability and authentication can protect people and systems
Supply chain traceability is the process of tracking products from manufacturers to authorized resellers to customers. This is usually accomplished as an unbroken, verifiable trail of purchasing transactions established from the customer to the manufacturer. Often referred to as a “paper-trail,” emerging technologies, such as Blockchain, look to create an immutable ledger of these transactions in a distributed digital system. Blockchain uses a decentralized network of databases to record transactions and group them together with unique code markers, making purchase information nearly impossible to tamper with and easy to track.
Serialization (the use of unique identification numbers per device) helps assure product quality at every stage of the manufacturing process. When combined with the use of a manufacturer’s proprietary authentication tools, such as online and mobile systems, users can verify that they have purchased a genuine product. Increasingly, the serialization of products and authentication upon delivery helps customers feel more confident in the products they’ve purchased.