Today’s fast-moving consumer goods (FMCG) markets face a number of challenges, such as pirated goods, parallel trading, and gray market practices. RFID technology provides new and improved methods for combatting these problems.
- Fast detection of counterfeit products
- Deterrence of parallel trading and gray markets
- Ensuring that health and safety standards are met
- Providing ability to void warranty when consumers use fake consumables in machines
- Increasing Government taxation revenue
RFID Features Beneficial to Application
- Unique serialized identification
- No line-of-sight requirement
- Ability to read of hundreds of tags/labels at a time
- Enabling of highly automated processes
- Secured on-chip data storage
Today’s fast-moving consumer goods (FMCG) markets face a number of challenges, such as pirated goods, parallel trading, and gray market practices.
Outsourced manufacturing sites may produce more than agreed-upon quantities or counterfeit products, diluting corporate profits and adding risk for brand damage. Users may return products damaged by counterfeit consumables to brand owners to ask for repair and returns, adding unnecessary cost to brand owners. And unscrupulous distributors may tamper with product labeling and packaging to profit from parallel import (geographical price differences), as well as from dilution, substitution and refilling.
These practices affect multiple stakeholders: brand owners face a loss in revenue and a reduced brand reputation from inferior user experience of counterfeit products, governments face reduced tax revenues, and products not conforming to health, safety, or environmental standards can harm society at large.
RFID—The Next Step in Anti-Counterfeiting
RFID technology offers a step-up in protection against copying and tampering. For example, each RFID chip has a unique serial number (TID), which permits mass-serialization. And each unique serial number is factory programmed and locked (cannot be altered), providing tamper resistance. In addition, RFID offers further protection options such as restricted access (via a password), User Memory, Tamper Alarm and Data Encryption.
These authentication benefits come in addition to all other general benefits that RFID provides, including:
- Elimination of line-of-sight requirement
- Proper operation even in harsh and dirty environments
- Ability to read of hundreds of tags/labels simultaneously, thereby enabling highly automated processes
RFID for Authentication Already In Use
Brand owners and governments around the world have already started embarking on RFID for counterfeit protection. During 2010, factories in China tagged tens of millions of items, without government mandate. Return on investment (ROI) has driven this action. ROI comes from increased tax collection for governments and for brand owners, and it is realized through brand and revenue protection. In cases that involve machines, brand owners also have the option to ensure the warranty applies only when approved consumables have been used throughout the product’s lifetime. Consumers receive protection through confirmation of origin, quality, and health and safety standards.
Authentication From Source to End User
RFID has authentication applications from very early in the supply chain all the way up to the consumer. Brand owner inspectors or government officials can check authenticity of product at warehouses, at distribution centers, and even on shop floors. And retailers and end users can check authenticity of products at the point-of-sale, when inserting a consumable into their machine, or even via NFC-enabled mobile phones.
NXP’s Product Portfolio—The Perfect Fit for FMCG
UCODE passive UHF transponder ICs offer high anti-collision rates and long operating distances, and can help protect your brand—ideal for supply chain management and logistics applications requiring high speed, long range operation.
NXP’s NTAG technology offers the ultimate in convenience for connecting all types of consumer devices, while enabling rapid and easy communications—the perfect solution for exchanging data in our increasingly complex and connected world.
NXP’s ICODE, the industry standard for high-frequency (HF) smart label solutions with billions of ICs in the field and thousands of successful installations, is a proven technology and supports the ISO 15693 / ISO 18000-3 compliant infrastructure.