24 SUPPLY CHAIN
to a brand’s name by poor quality products, in this industry fakes can also be dangerous. Avoiding safety tests and ignoring legal standards, counterfeiters can cheaply produce duplicates that look the part, but are made from unsafe or unsanitary ingredients. Horror stories are abundant. Fake beauty products have been found to contain human urine, arsenic and even rat droppings. Toxic materials such as mercury and cyanide have also been traced in items such as phony mascara and lip gloss. These ingredients can cause skin irritation, rashes and chemical burns, posing a serious threat to consumers. In 2017, one fraudster was charged with selling fake MAC lipsticks which had a lead content three hundred times higher than the legal limit. In addition, the reputational management inherent to brand protection goes beyond the safety hazards presented by fake products. Many counterfeiters use the profits they make to fund organised crime, including human trafficking. No brand wants to be falsely associated with these practices, and no consumer wants to accidentally fund them. The sophistication of the counterfeiters’
strategies, and the complexity of tracking every seller online, means putting a stop to illegal trade is easier said than done. And this was before the COVID-19 pandemic. Since lockdowns and panic-buying began to take force, the vulnerabilities in global supply chains have been exacerbated and the safeguards in online marketplaces weakened. Counterfeiters take advantage of long chains to find opportunities to insert their faulty ingredients, components or finished products into legitimate stocks. Storage and transit are the most popular moments for infiltration, particularly during delivery to distribution warehouses or overseas shipping, in retail warehouses or at customs ports. Anywhere that stock changes hands, a counterfeiter will try to slip in their spurious goods.
How to design a brand protection strategy Amid the changing global picture of the COVID-19 pandemic, it is more challenging than ever to keep track of supplies. To stand a chance against this insidious threat, brands should design and implement a comprehensive brand protection strategy which targets counterfeiters’ most effective strategies, both on and offline. The first step any brand should take to
protect their supply chain is to map it. This can be a challenging process when you first begin but will be worth the effort. Make sure you know every link in your chain and understand how each one connects to the next. If there is an unscheduled stop or a last-minute change in your stock’s journey you will be able to follow up to find out
PERSONAL CARE EUROPE
why. Identify vulnerable points along the chain and design contingencies so you are ready to source your ingredients elsewhere at the drop of a hat. Disaster recovery plans should be prepared for all eventualities - not only in case you find fakes, but if a factory is forced to shut down or transport routes are closed. Forging positive relationships with your suppliers and distributors will also put you in a stronger position to guard against the new complexities imposed by the pandemic. Make sure you speak regularly with your contacts so that if a local lockdown or change in regional COVID-19 restrictions causes your supplies to be redirected, you will be the first to know. You can then immediately activate those contingency plans. Personal relationships are a powerful
tool, but counterfeiters are experts at infiltrating chains, even behind well-trusted backs. As such, technology should be harnessed to complement your human eyes on the ground. Tracking services and serialisation codes will allow you to watch supplies in real-time as they move along the chain. These devices can also help you differentiate genuine goods from fakes. Meanwhile, virtual tours can serve as a temporary substitute for site visits if local restrictions have made these untenable. In the long-term, building secret features into products, such as smart packaging that utilises holograms or even blockchain technology, can help identify legitimate stock from imposters and, crucially, can be championed as part of a campaign to educate consumers on what not to wear, or buy.
However, many brands may not be able
to change the design or manufacturing processes of their products quickly enough to deal with the threat posed by the pandemic’s profiteers. Moreover, putting the onus on consumers to inspect products or limit the marketplaces they buy from has obvious drawbacks. For immediate results and greater control, put into force an online brand protection plan that uses specialised software to scan every corner of the web for counterfeits trading under your brand’s name, or using your brand’s images. Your intellectual property will allow you to prove originality, so flag all spurious items and remove them, efficiently and promptly. By taking the fakes off the web, consumers cannot be coaxed into buying them. Acting proactively to remove counterfeits from the internet is crucial to protect consumers from potentially toxic ingredients. Another immediate action you can take
is to closely monitor customer reviews. As digital sales surge, online reviews can be a key resource for keeping your ear to the ground on consumer experience. A sudden rise in complaints may warrant further investigation. Repeated reports of similar problems - from faulty packaging to products inducing rashes or inflammation - could be a warning that counterfeits have seeped into your genuine supply chain. In the end, it is the complexity of many
supply chains that makes them vulnerable. If your brand can shorten the chain, it may be easier to manage. Many ingredients may have to be sourced from overseas. But if you can produce the final product at home, you will be able to regularly test ingredients to check they are real and adhere to
November 2020
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