Track and Trace for Anti-Counterfeiting

June 28, 2011
ARC’s workshop on Anti-Counterfeiting and Brand Protection (ABP) at our 15th Annual World Industry Forum in Orlando last February brought together executives from a wide cross section of manufacturing industries and government.
Workshop presenters agreed that counterfeiting is a real and growing menace. Participating manufacturers expressed increasing interest in pursuing technologies to combat sophisticated counterfeiters.

Resolving the global counterfeit drug problem requires common practices and a collaborative infrastructure that includes participation and collaboration by all trading partners across the supply chain, adequate legislation and enforcement, and implementation of emerging technologies. The initiative requires technology standards to ensure collaboration and success.

Better track and trace requires technology collaboration and communications across many departments/organizations within an enterprise and across the supply chain. Manufacturers can learn from other industries such as the financial industry, which has used risk-modeling technology for some time. In manufacturing, real-time track and trace systems using unit serialization are an important technology for preventing counterfeits. Companies can derive business benefits from this technology that they can also use to justify the investment.

Counterfeit supply chain focus

Manufacturers have limited control and visibility once their branded products enter the distribution network. As a result, companies typically focus their anti-counterfeiting and brand protection efforts on the downstream supply chain. However, in many industries, it’s also important to monitor the incoming raw materials closely. For example, in the electronics, medical and nuclear product industries, it’s important to monitor incoming components or bulk raw materials that are used in the manufacturing processes.

Smartphone technology, when used in conjunction with a track and trace system, can be a cost-effective enabler for product authentication at the consumer level. In fact, smartphones and bar codes are already used for product verification. One effective way to get consumers involved in the fight against counterfeits is to use consumer incentive programs for product verification. Radio frequency identification (RFID) and two-dimensional (2D) QR codes are two technologies currently in use. RFID tags are dropping in price, still cost around 10 to 20 cents per tag, and may not have the reliability needed for some track and trace applications, where even a 2–3 percent error rate is not good enough and could affect consumer health or safety.

Both QR codes and RFID can be used at the unit of sale or at the case level. For example, by placing chips on each bottle of product (unit of sale), RFID can be used to help authenticate more expensive products and medicines. One workshop participant provided an example in which RFID was used on 40-lb. bags of products worth around $250 each. The cost was less than $.10 per tag on this unit-of-sale product.

However, most RFID tags are used on unit-of-sale products, cases, and pallets. Some participants indicated that they use a line-of-sight static reader, which they felt might not work well on very fast product [do you mean “production” lines?] lines. In the tobacco industry in Mexico, government-mandated stamps with product information give the manufacturer access to end-to-end supply chain data that can be used to secure the supply chain and track products. Companies provide subcontractors with handhelds to read the code on the cigarette pack for track and trace.

In some industries, particularly those where public safety or health are issues, RFID may not be the best technology due to its inaccuracy and high cost. The relative appropriateness depends on the product and supply chain. For some companies, 98 percent accuracy is not good enough.

Janice Abel, [email protected], is principal consultant at ARC Advisory Group, Dedham, Mass. See ARC’s Anti-Counterfeiting and Brand Protection Market Outlook Study.

>> Read Janice Abel’s recent column from May on better integration of plant and enterprise systems. 

July 2011, Related Column – Fighting Fake Drugs in Africa
To read the column, visit

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