Cover story: Spot the difference?

The flow of counterfeit components in to the UK spans many industries and components. Justin Cunningham finds out who is affected and what the solutions are

Counterfeit components are a continuing and growing problem. Counterfeiting undermines confidence and is damaging to both individual brands and to entire industry sectors. The problem is global and has permeated into most industry and technology sectors.

It's thought 10% of all goods worldwide are counterfeit and this is estimated to cost companies €250billion in lost sales. And for individual companies, the harm a fake product can do to its reputation is intangible. Reputation and quality are tantamount, especially when supplying OEMs and larger blue chip companies.
The World Bearing Association (WBA) represents the major global bearing suppliers around the globe. One of its main focuses is the fight against product piracy and counterfeiting.
Dr Jürgen Geißinger, president of the WBA, says: "Counterfeiting earns large sums of money and causes immense economic damage." The bearings industry reports losses going in to hundreds of millions of Euros. But, beyond this economic damage, counterfeit bearings are a considerable safety risk
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The WBO says the situation has deteriorated over the last few years as counterfeiters copy not only simple catalogue products, but also technologically demanding bearings that are used in aircraft engines and high speed trains.

Counterfeiting is not only illegal, but it also puts the end customer at a major risk since they purchase and use these products thinking that they are genuine.
Dr Geißinger adds: "This means intensified information and clarification of facts for customers and uncompromising prosecution for offenders." And it is not product or size specific, and fakes range from miniature bearings with diameters of just a few millimetres, used for example in dental drills, to large bearings with outside diameters of several metres that are required in wind turbine rotors.
The problem of counterfeiting goes well beyond cheaper alternatives that might use similar branding or logos. It is the active attempt to impersonate a superior product on a like for like basis. And these products are being sold at virtually the same price as the real components.

"What we find is they are not selling for much less than the market price," says Phil Burge, UK marketing manager of bearing manufacturer SKF. "They actually only sell them for maybe 5% less. If counterfeiters sell for considerably less than SKF is selling them, the customer may look at it and question why, and that will start to ring alarm bells." At a time when industry is tightening its belt, you might think that this is a primetime for counterfeiters. But that hasn't been the case according to Burge.
"The biggest problem was probably a year or so ago," says Burge. "When the business was going extremely well and the market couldn't keep up with demand it lead to a shortage in supply. "Counterfeiters saw an opportunity to take unmarked products and rebrand them as premier bearings. They re-box them and sell them on as a like for like product." Many counterfeit products that look identical to the products they are trying to represent. The branding will be the same and often they will have a part number or quality mark that is also essentially the same as a real one. They can also be packaged in exactly the same packaging, so it is often quite difficult, just by looking at a product, to know which is real and which is counterfeit.
"We always recommend that customers source bearings through recognised authorised distributors, rather than on the open market as you can never guarantee legitimacy.
"Failures within machines, such as those in paper or steel mills, need replacement parts very quickly. But if you haven't got any traceability, you are taking a huge risk. Although it may look like the genuine article, it may not be."

SKF says this is a global problem and is not particularly linked to Asia or the Pacific region. During April this year SKF confiscated more than 30tonnes of counterfeit SKF bearings at a non authorised dealer in the Czech Republic. The dealer purchased these products from non-SKF sources and was selling them to both end users and other dealers in the Czech Republic and Europe.
And the problem goes way beyond bearings. Also affected by the counterfeit trade is 3M, which supplies products ranging from adhesive tapes to safety equipment – as well as the humble Post-it note. Jim Voegeli, 3M's assistant chief intellectual property counsel, warns: "We have had a 108% average annual growth rate for the last seven years in the number of counterfeit files opened each year.
"It can affect us on multiple levels. One is the immediate loss of sales, but it is also damaging to our reputation. Most people buying counterfeits believe it is the real product. The packaging will look great, but the product won't perform well. It can taint the customer's view of 3M and may affect purchasing decisions regarding other products."

The lion's share of 3M products that have been counterfeited have originated from China, according to the company. It says every product is a target, it just depends on the margin and difficulty of manufacture. One thing that facilitates counterfeiting is a weak supply chain and engineering firms should not be over reliant on the integrity of a supplier that components and equipment is correct, especially when there is no prior relationship and the supplier is based overseas.

Voegeli adds: "The looser the supply chain, the higher the probability that you are going to have counterfeits. Every business should consider this risk."
In China, 3M has stepped up anti counterfeiting efforts in the past six months, conducting more than 50 investigations and 40 raids. Daniel Biesterveld, 3M's managing intellectual property attorney, Asia Pacific, recently relocated to China to oversee anticounterfeiting efforts. He says: "Everybody understands that counterfeiting in China is more of an issue than anywhere else. However, as China develops its technical and marketing capabilities, I expect to see more pressure put on the Chinese government by Chinese companies to effectively address counterfeiting."

Tackling counterfeiting is an ongoing and exasperating process. But seal and vibration control specialist Simrit has developed an innovative marking solution after being made a target by counterfeiters. "You can't copyright a colour of material," says Stuart Campton, sales director for Simrit UK and Ireland. "We have a specific nitrile rubber material which is blue, that no other company produces. However, we see counterfeit products in the market where people make a blue seal and mould in a trademark to actively appear to be a Simrit seal."

As a result Simrit has developed 'safe', (secure adaptive Freudenberg encryption) a laser marking technology that works on its rubber seals. It is copyproof and traceable, even with the greatest part of the encryption rubbed off or damaged, Simrit claims its reader can still decrypt the code. Encrypted information holds product information such as article, batch and serial numbers and manufacturing date.
"It is an indelible mark that stays with the part for the life of the product," says Campton. "And we are the only people that have this capability and offer full traceability of our rubber seal parts and components."
Design engineers need to remain vigilant and ensure that components and parts flowing in and out of the factory have the right level of traceability, and the right certification. In addition, firms need to continually work with suppliers to ensure they get the products that they require so in service life and performance are never compromised.

Marking and tracing products
The use of lasers for marking is commonplace in many industries and applications. The flexibility of the laser, combined with its capability to mark a diverse range of metals, has seen the technology become the process of choice for many.

Laser marking produces permanent readable codes on virtually all materials. Lasers are flexible and are able to produce either round or square matrix elements that can contain a significant amount of information about a product and its assembly. In addition, the laser is able to mark very small codes, down to 1 x 1mm.
Due to the small size and large data capacity, data matrix codes can be used on nearly every component down to the nuts and bolts. And it is no longer an expensive process to incorporate in to production. As a specialist manufacturer of high precision threading and grooving systems, Posithread UK says it is essential that parts can be identified. For certain industries, such as oil and gas, many components are safety critical, so it is essential that identification marks on individual inserts and tool holders remain clearly visible.

Posithread uses the Rofin EasyMark II compact laser marking system to generate the component identification marks. The diode pumped laser source is capable of marking a wide range of materials, including metals and plastics. The additional rotary axis enables the system to mark both flat and curved components with the minimum of operation intervention. The machine uses VisualLaserMarker (VLM) software that runs off a PC to allow users to input the data required on a part and turn this in to a component markings such as a matrix code, barcode or serial number.

Author
Justin Cunningham

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