A counterfeit network analyzer based on RFID and EPC

Publication Date24 Aug 2010
AuthorS.K. Kwok,S.L. Ting,Albert H.C. Tsang,C.F. Cheung
SubjectEconomics,Information & knowledge management,Management science & operations
A counterfeit network analyzer
based on RFID and EPC
S.K. Kwok, S.L. Ting, Albert H.C. Tsang and C.F. Cheung
Department of Industrial and Systems Engineering,
The Hong Kong Polytechnic University, Kowloon, Hong Kong
Purpose – The purpose of this paper is to focus on the design of a counterfeit network analyzer
(CNA) for aggregating all the problematic product flows in order to discover any counterfeit
distribution source, and to control the spread of counterfeit goods. The analyzer leverages radio
frequency identification (RFID) information stored within the electronic product code (EPC) network.
Design/methodology/approach – The system architecture of the proposed CNA is first discussed.
A case study of the system application in a Hong Kong pharmaceutical manufacturing company then
presents the adoption process and the challenges encountered in such technologies.
Findings – Compared with traditional approaches, the results show that the proposed RFID solution
is reliable and is capable of discovering counterfeit distributions, as well as reducing the detection
costs by means of higher product movement visibility within the supply chain.
Practical implications – A prototype system has been constructed and trial implemented in a
pharmaceutical manufacturing company. It proved to be of benefit to the manufacturer who is able to
deter product counterfeiting effectively and visualize real-time supply chain data automatically.
Originality/value – The proposed CNA is designed to overcome issues of information invisibility,
which is considered a huge cost lost in the identification of counterfeit products, loss of sales and
reputation associated with the counterfeiting, and ineffective product authentication in the
manufacturing industry. This paper contributes to the RFID research in the counterfeiting area by
studying the feasibility and practicality of shifting the focus of product identification from the
traditional package redesign solutions to the visualization of the movement of the product (i.e. product
supply chain) via the use of RFID and EPC. Furthermore, a pharmaceutical manufacturing site
provided a case study for discussing the advantages, critical issues for implementation of the RFID
system, and lessons learned.
Keywords Production management, Counterfeiting,Inventory control, Tracking,Radio frequencies,
Paper type Research paper
1. Introduction
Manufacturing enterprises face tough competition in an increasingly globalized market,
with increased regulatory scrutiny and requirements. To provide responsive and lean
supply chain planning in meeting the conflicting demands and increasing the
competitiveness, it is important for manufacturers to deliver a safe product with the
right part in the right place at the right time. Harrison (1992) summarized the concept as
“meeting demand instantaneously, with perfect quality and no waste”. However, such a
concept is getting more and more difficult to satisfy as counterfeiting problems
have impacted on the manufacturing industry significantly in recent years.
The current issue and full text archive of this journal is available at
The authors would like to express their sincere thanks to the Research Committee of
The Hong Kong Polytechnic University for financial support of the research work (Project Code:
Received 29 December 2009
Revised 28 February 2010
Accepted 15 April 2010
Industrial Management & Data
Vol. 110 No. 7, 2010
pp. 1018-1037
qEmerald Group Publishing Limited
DOI 10.1108/02635571011069086
According to the study conducted by the ICC Counterfeiting Intelligence Bureau (2005),
counterfeiting is one of the serious issues in today’s manufacturing industry.
A counterfeit product is any product bearing an unauthorized representation of the
original manufacturer of the products (Rochester Electronics, 2007). They not only lead
to compromises in public safety, but also cause economic loss to manufacturers, and
pose a threat to the supplier’s brand name and reputation. Inexpensive copying, lack of
traditional packaging and the unusual distribution channels make the counterfeits
easier to be launched in the global market (Berman, 2008).
At present, a range of product authentication technologies, such as using holograms
and security labels, are available to enhance the package design in pro duct
authentication (Hopkins et al., 2003). However, the counterfeit situation has still not
yet improved because these technologies using in optical detection and identification are
insufficient to address the counterfeiting problems and they are easier to be imitated
over a period of time. Instead, Kwok et al. (2008) and Bastia (2002) argue that the
anti-counterfeit measures will be more effective when the movement of the product
(i.e. product supply chain) can be tracked and monitored. When the distribution channels
(or so-called supply chain) are authorized by the manufacturers, it is claimed that the
product is authenticated when it is moved and delivered in a verified
flow (Rochester Electronics, 2007). Thus, a system is needed to enhance the visibility
and transparency of the product movement.
So far, radio frequency identification (RFID) and electronic product code (EPC) have
been adopted in the manufacturing industry for visualizing the product movement and
combating counterfeits (Baudin and Rao, 2005; Lu et al., 2006; Huang et al., 2007;
Visich et al., 2009; Wamba and Chatfield, 2009; Wang et al., 2009), especially in the
pharmaceutical industry (Wyld and Jones, 2007) and the electronic component
manufacturing industry (Rochester Electronics, 2007). In general, through the automatic
and real-time reporting features of RFID, and seamless sharing of RFID-related data in
the EPC network, every tagged object that moves in the supply chain can plausibly be
checked (Hou and Huang, 2006; Pawlak and Małyszek, 2008). As each RFID tag has a
unique EPC identification number, the specific object in motion can be recognized. At the
same time, all these RFID signals can be captured and transmitted to the back end
information system for further checking of the authenticity of a tracked product.
Essentially, if the information is not verified, it is ascertained that the product is a
suspected counterfeit and concerns should be raised. Thus, track and trace-based
solutions that provide downstream visibility can help preventing counterfeiting and
theft of products (He et al., 2008).
To further enhance the effectiveness of an anti-counterfeiting solution, it is critical for
companies to detect and identify the parties involved in counterfeit distribution channels
(Zurich, 2007). By taking a holistic perspective of product movement and supply chain
information captured via RFID, network analysis helps to analyze the product flow
(among all the involved parties) and hence identifies suspicious supply chain parties that
have the highest likelihood of distributing the counterfeits. With the leverage of
real-time information shared in the EPC network, the movement of the product (so-called
pedigree) can be visualized efficiently, and inconsistent movements can be detected
automatically by means of a knowledge-based system.
So far, very few research activities (Kim et al., 2006; Choi and Poon, 2008; Kwok et al.,
2008) have been undertaken in this direction and the present study thus aims to establish
A counterfeit
network analyzer

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