Supply chains still struggle to reduce fraud

Fraudulent products have long infiltrated supply chains, especially larger ones that involve more partners and suppliers, and that's a problem for all involved. This kind of crime can undermine the reputation of manufacturers, cause issues for freight companies and even harm customers - and all of those issues only seem to be increasing amid the novel coronavirus pandemic.

The increase in phony products in recent months has certainly been noted among supply chain professionals, and unfortunately, it does not appear to be something that can be addressed comprehensively when there are so many other concerns in the sector, according to Medpage Today. This issue was recently addressed in a hearing held by the U.S. Senate Finance Committee, as demand for personal protective equipment in particular has led to a surge in delays, hangups and even fraud.

Phony products are still a growing problem in the supply chain.Phony products are still a growing problem in the supply chain.

"Before the coronavirus pandemic, hospitals and healthcare workers could avoid purchasing counterfeits by tapping into tried-and-true supply chains," Committee Chairman Chuck Grassley, an Iowa Republican, said at the hearing. "However, as the demand for PPE skyrocketed, some of these providers have had to go outside their normal supply chains to source supplies, and in some cases have inadvertently purchased fake, faulty, and even illicit medical supplies."

Another major problem
Meanwhile, supply chain experts have also grown increasingly concerned with the prevalence of so-called food fraud - including substituting, omitting or diluting ingredients that can put consumers at risk, according to Food Engineering. Alma Delia Hernández, a food safety professional at a supply chain consulting company, noted that companies are increasingly successful at identifying these issues through emerging technology, but it's still a major problem for the industry.

Altogether, it's estimated that this kind of fraud costs the food supply chain some $50 billion per year, especially around certain products like seafood, spices, meat, coffee and more, the report said. A recent industry survey found that consumers are not especially confident in the safety of their food, and that may be particularly true when it comes to food products that are traditionally more expensive and, therefore, more likely to be counterfeited or otherwise tampered with.

A look at the tech
One of the easiest ways producers have found to combat supply chain fraud is to rely on the block chain, encryption and other digital technologies so that items can be tracked easily from the factory or farm to shippers to stores to consumers, according to the Enterprise Times. Properly traced shipments can tell partners or recipients everything that is supposed to be in a given shipment, serial numbers for every item within it and so on, all with a single scan. That, in turn, provides far more confidence about a given item's provenance for all involved.

Of course, this is not an issue that's going to go away any time soon, and companies need to continually plan for and evaluate how they combat fraud of this type on an ongoing basis. Just as manufacturers and freight firms innovate new ways to avoid fraud, those who commit it in the first place are likewise scheming for keeping up with that next wave of protection.

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