Tackling the very real risk of counterfeit products in manufacturing

Posted on 18 Jun 2024 by The Manufacturer

The risk of counterfeit products in the manufacturing environment is a long-standing issue. With counterfeiters becoming more sophisticated in their operations and fake products getting harder to spot, manufacturing operators need to arm themselves with the right tactics to avoid the pitfalls of buying counterfeit goods.

There are certain items used by manufacturers – both in operations and in products – that are more likely to be replicated than others. Bearings have become a common area for counterfeiters, due to the ease and cost-effectiveness of manufacture and the good return on investment they bring. Similarly, in areas like Personal Protective Equipment (PPE), disposable items like gloves and masks, as well as products to protect head, ears and eyes are also commonly counterfeited.

When the health and safety of staff, the environment and the end user are at stake – as well as business reputation – cutting corners on due diligence in procurement of products can be risky, or even catastrophic.

The true dangers of buying counterfeit products

In the case of bearings – which come in a wide variety of sizes for a plethora of functions – the profit margins are attractive to counterfeiters. Small bearings can be used in the manufacture of consumer items like an electric toothbrush, while bearings in manufacturing machinery are commonplace. Then there are the very heavy duty ones like those enabling the smooth running of a train carriage, cranes or supporting the London Eye, which can be several metres in diameter. Bearings are a very commonly used critical component. But while they look simple in design, they are specialised in their application and need to be made with the appropriate material and clearance tolerances, with the correct manoeuvrability and lubrication to optimise performance.

A bearing made of non-traceable, unaccredited or unapproved materials, or not subject to quality checked processes, could end up with fractures or indentations in the raceway that might affect functionality or be at risk of premature failure. Additionally, when using such items, traceability is often a requirement. But in the case of a counterfeit item, the number or conformity mark cited on the component or product won’t lead anywhere. In the event of an issue that caused failure or injury, there’s no recompense or compliance cover. And with the cost of downtime being a major consideration for manufacturers, time spent replacing a part that doesn’t stand the test of time, or prematurely fails and stops production, directly affects the bottom line.

In the recent RS health and safety report ‘Striving for Excellence’, 37 per cent of survey respondents – all health and safety  professionals – cited counterfeit PPE products as a big issue. Where counterfeited PPE products enter a manufacturing space, employees’ safety could be jeopardised in the immediate or long term. A glove that doesn’t meet regulatory compliance could result in immediate injury. A respiratory protection mask that doesn’t offer the correct level of protection because of not conforming to standards could result in a future health issue as could inadequate ear protection which could cause future hearing issues. The hazards are wide-ranging and can come back to haunt an organisation in years to come.

Avoid the lure of the grey market

Many a procurement professional has probably been in the position of needing a product now, or sooner than it can be sourced or provided by a reputable distributor, and may have turned to alternative providers to the trusted ones they might normally use. In the case of unplanned maintenance, where a critical asset might require a component that hasn’t been stocked, casting the net wider in the search for the part might be deemed an unavoidable action.

According to RS, this is where the lure of the grey market can result in parts being bought from unknown providers with unverified supply chains. Some sites may show logos of reputable brands but may not be authorised distributors and therefore may not be selling bona fide parts or factory fresh parts. A bearing on offer may be a genuine branded part, but from an old batch that has been sat for a while which may be washed out and regreased, not in line with regulations. The part may be prone to early failure due to degradation. It really is a false economy, as well as dangerous.

Spotting the signs and exercising due diligence is key

Exercising due diligence at all times in procurement is best practice, but certain events give rise to opportunistic counterfeiters and call for more vigilance. In the case of the COVID-19 pandemic – and other epidemics like Avian influenza and Ebola – where demand for PPE was higher than usual, counterfeiters seized the moment. They can work quickly to set up online stores to flood the market with sought-after products and even incentivising more sales with discounted deals that feel too good to not capitalise on.

The Russia and Ukraine conflict disrupted manufacturing plants in Ukraine, where bearing steel and finished bearings were produced. Additional pressure on worldwide stocks was also a result of air routes being affected because of the conflict.. This created opportunity for counterfeiters and, while it will always be an issue, being more mindful about where products are purchased in times of shortage is a good precautionary measure to take.

Many trusted and reputable manufacturers are actively working to raise awareness to help buyers post signs of fakes and buy with confidence. One partner RS works with is bearings manufacturer SKF, which produces educational materials on best procurement practices. SKF’s authenticator app enables the scanning of a product to check its authenticity and provide full traceability, as well as providing a full list of its worldwide distributors on its website, for buyers to check before they buy from an unknown or different supplier.

Other ways to secure the buying process are to avoid looking for components or products last minute, when it’s more tempting to use unknown suppliers. Working with a trusted supplier offering a wide breadth of stocked products will help avoid those emergency purchases that can be fraught with risk.

Supply partners committed to supply chain transparency, exercise stringent auditing and have established relationships throughout the supply chain should be the go-to. Those with good product knowledge can also advise on the best product for the application and, in the case of a shortage, be able to best specify an alternative product that will do the job while still safeguarding the plant, people, product and business compliance.

With the advances and prevalence in execution of counterfeiting, the old adage of if it seems too good to be true, it probably is, is incredibly apt. There’s a lot at stake when critical products or components fail to do what they are designed to: injury, ill health or worse, expensive replacement products, maintenance downtime and business reputation. Establishing relationships with trusted partners helps negate risk, enabling operators to buy with confidence and a clear conscience.

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