January 2016 | Commentary | Risks and Rewards

Serialization: It's the Real Thing

Tags: Security, Packaging, Logistics, Technology , Supply Chain

Steve Wood is President & CEO, Covectra, 508-621-7320

 

To help combat counterfeiting, the premium beverage industry is taking advantage of serial numbers on product packages to uniquely identify products for increased connectivity throughout packaging operations and the supply chain. Premium beverages such as expensive wine, whiskey, and cognac have become an increasingly active market for counterfeiters in China, India, and Russia.

It's easy for counterfeiters to replicate premium beverages. For starters, the empty bottles for the real products are valuable commodities. Enterprising bartenders place empty premium beverage bottles in a recycle container, which counterfeiters purchase at high prices.

The counterfeiters then fill the bottles with a concoction from their processing factory and prepare them for final packaging.

Given the availability and low price of used digital label printing systems, counterfeiters can precisely replicate side and cap seal labels so it is virtually impossible to distinguish a fake bottle from a genuine one.

Keeping Tabs on Product

Assigned serial numbers, similar to ones used in pharmaceutical and food industries, can be linked to a database to track individual product from its place of packaging, through its distribution system, and into the hands of consumers. A serial number is printed on the label of a bottle and can be used to authenticate the product, track it through the downstream supply chain, and monitor trade for grey market diversion.

The serial numbers are typically a 2D/Data Matrix or QR barcode, as well as a number, for ease of consumer use. Serial numbers are printed on the label and each subsequent packaging level—carton, case, and pallet—is then linked to a cloud-based database, which keeps a record of each event related to that product.

To provide higher levels of security, the serial numbers can be linked to package security features. Consumers are able to authenticate the product and check its chain of custody by scanning the barcode with a mobile phone or by entering the code into a Web-access application.

Companies can use data collected through serial numbers as a powerful and cost-effective tool to combat counterfeiting and supply chain leakage. This data can also help improve an enterprise's operational efficiencies through the use of tracking systems such as enterprise resource planning, customer relationship management, and manufacturing execution systems.

Building Consumer Loyalty

Other business benefits, including interfacing with consumer loyalty programs, can be realized through the use of serial numbers, which help establish a direct relationship between the brand owner and the consumer. This creates a channel to communicate marketing information that is a source of real-time consumer feedback and opportunities to mine additional market data.

Serialization-based brand integrity programs give consumers confidence in a premium beverage. Through the use of serial numbers, companies can stop counterfeiting and supply chain leakage, as well as connect with consumers and build brand affinity.






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