The Financial Upside to Serialization
While product serialization can help counter the penetration of counterfeit goods into the global supply chain and consequently prevent the loss of lives from falsified drugs, many businesses have left much of their far-reaching benefits still untapped. In particular, track and trace solutions like Identem’s can put a stop to how organizations suffer from financial leakages and economic setbacks—the realities of which are extensive.
A Financial Swamp
Counterfeit products such as falsified medicines not only put human lives at severe risk, but also negatively impact business revenue. In recent years the World Health Organization (WHO) has reported that the pharmaceutical industry alone loses annual profits of USD40 billion due to counterfeit drugs—other estimates place the value at USD75 billion. The industry is also victim to blatant product theft, with Freight Watch International recording that drugs account for 15% of annual cargo theft worldwide, worth USD8 billion to USD12 billion.
Of course, counterfeiting extends well beyond the financial woes incurred by pharmaceutical companies. At the current growth rate of the counterfeit market, brands and corporations across several industries including fashion and technology will be forced to lay off a total of anywhere from 4.2 to 5.4 million employees by 2022.
And as businesses face revenue losses, governments, too, are confronted with setbacks.
When companies are subjected to profit cuts, tax revenue subsequently drops. A 2016 report drafted by a conglomerate of international business organisations reveals that countries around the world collectively lost sales taxes of up to USD89 billion. Although the economic shocks were not isolated to any one specific country, the implications are distressing: lower state revenue translates to reduced capacities to maintain and upgrade the infrastructure, develop public education and improve the healthcare sector within a nation.
Prevention and Streamlining
Serialization is part of the antidote to all of the above problems.
Together with track and trace technology, companies can optimise supply chain integrity and address the. As a result, companies can minimise the number of fake goods eating away at revenue, as integrated cloud-platforms can detect the presence of serial numbers and 2D data matrix codes that don’t match up to those on the database.
Moreover, product recalls can be made more efficient, as an effective authentication capacity allows for a quicker turnaround in the reverse logistics process. A comprehensive database platform is crucial—which is why it’s a key component of Identem’s traceability solutions—to allow for quick identification of an individual product or batch.
In turn, the company can find out which manufacturing point of origin to return the product to, simultaneously sending information to the relevant supply chain checkpoint to prepare for product reception. This saves both time and money for businesses, ensuring the productive maintenance of a streamlined supply chain.