Author: Andree Bourgeois

Responsible Fuel Supply Chain Management Just Makes $ense

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Author: Andree Bourgeois

Illegal Fuel Trade, Supply Chain Integrity and Technology

By: Erwin Dorland, Advisory Program Delivery Manager, Authentix

When addressing the problem of fuel smuggling or fuel fraud, responsible fuel supply chain management isn’t just a simple question of doing the right thing – it makes financial sense.

Responsible management and minimising risks within the fuel supply chain will ensure quality and security of the supply chain.

Financial gain is often the key motive behind supply chain infiltration, as illegal practices can be extremely lucrative1. Often the legal and regulatory framework is weak, the risks are low and the financial gains can be high. As mentioned in a previous BLOG, in many cases, organised crime is involved, which contributes to the growth of this type of fraud.

Most countries have significant problems with lower taxed fuels being sold at higher taxed prices. For example, in Europe, diesel is sold at a lower tax rate for agricultural use, but is illegally used by road users, who are supposed to purchase higher taxed diesel. This type of fraud is preventing governments from collecting the right amount of taxes, which impacts government programs, the well-being of all citizens and the environment in which we live. In my experience, there are four key areas of focus to ignite action against the business of illicit fuel trade.

Visibility2, 3

Visibility refers to the ability to see what is going on within the supply chain. Fundamentally, having access to information will enable managers to make better decisions.

Information technology is at the root of supply chain management. With the advent of the Internet and the Cloud, information exchanges can involve many stakeholders and enables access to critical data 24/7.

Traceability

Traceability is closely related to visibility and refers to the ability to track the fuel’s provenance and maintaining a record of activities of the product flow.

Several tools are available to ensure traceability as fuel moves through the supply chain. The advancements in technology now allow stakeholders to tap into a variety of information sources for a balanced view of supply chain participants and risks. The fuel industry has a number of tools available, such as visible dyes, covert dyes, chemical markers, sealing of tankers, GPS tracking of trucks, dipping of trucks, and wet stock control to track products, to ensure quality and prevent fraud.

Integrity

National governments are increasingly being held accountable for policy actions and therefore the governments’ awareness of and commitment to high principles and business practices is increasing.

The exposure of irresponsible practice in the supply chain can result in severe damage to national governments’ reputation and citizens’ trust. For example, governments not collecting the available taxes and having the appropriate system in place to do so, might have a negative standing with citizens.

Transparency

Transparency refers to national governments’ engagement and communication with external stakeholders. Such engagement is designed to share the national governments’ practices with those that have an interest in the governments’ behaviour, including environmental and social performance. Supply chain issues are becoming more and more visible to citizens and stakeholders. Therefore, developing transparent information systems and processes to communicate sustainable supply chain practices is vital. For example, governments can use social media to inform and educate citizens about their approach to responsibility, by promoting supply chain transparency.

 

Ready for Action

To really support the initiative to stop fuel smuggling and fuel fraud, making the supply chain more resilient to supply chain risk involves attaining a good understanding of the supply chain and conducting analysis of the potential threats and the level of risk4. Technology can be used to verify fuel authenticity and tampering. The resulting information will need to be captured using the appropriate information technology and made visible to the appropriate stakeholders.

Among the considerations of the technologies to be used, must be the ability for the technology to pay for itself. Government and policy makers need to be educated regarding the risks of fuel adulterations and how the legal and regulatory framework need to work hand-in-hand with the introduction of technologies. Awareness needs to be created that no technology will provide absolute supply chain security, as there are always weaknesses to be exploited. The key is to understand the key risks and put tools in place to collect the appropriate information, so those risks can be managed.

Click here to learn more about how Authentix’s Vigilant® offering is helping governments prevent fuel fraud. You can also learn more about Assure™, our brand protection fuel marking program for oil marketing companies.

 

References

  1. Illicit Trade, Supply Chain Integrity, and Technology – www3 … – Illicit Trade, Supply Chain Integrity, and Technology, J Picard and C.A. Alvaranga
  2. https://dupress.deloitte.com/dup-us-en/topics/operations/supply-chain-transparency.html – The path to supply chain transparency, D Linich, University of Tennessee
  3. creating a transparent supply chain best practices – Global Supply ……  – Creating a Transparent Supply Chain – Best Practices, University of Tennessee
  4. Manage your supply chains responsibly – Business in the Community – How to: Manage your supply chains responsibly, Business in the community

Frost & Sullivan Awards Authentix with the Authentication Solutions Technology Leadership Award

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Author: Andree Bourgeois

By: Mohamed Lazzouni, COO, Authentix

Remember as kids the excitement you felt upon receiving a blue ribbon or trophy from sports or an art or science project? Your parents would post it on the refrigerator and tell everyone how proud they are of you. That’s how I felt upon learning that the prestigious Frost & Sullivan research firm presented Authentix with the North American Authentication Solutions Technology Leadership Award. In that excitement, I immediately recognized that the award itself takes on a different meaning.

For more than 20 years, Authentix has proudly supported a global customer base in combating illicit trade and counterfeit practices. Frost & Sullivan is diligent in their research to identify those companies exemplifying best practices in the development and delivery of technology. The technology leadership award recognizes the transition Authentix is leading toward incorporating more IoT and Big Data analytics within authentication technologies.

According to Frost & Sullivan, “The company’s solutions capitalize on the evolution of Mega Trends such as Internet of Things, Big Data analytics and supply chain integration to thwart counterfeiting measures. This integration enables the company to build and implement robust, end-to-end authentication solutions to help each customer recover lost revenues and protect brand equity.”

Full transparency, it is rewarding to know that the hard work of all Authentixians is front and center for others to witness. Just as relevant is the spotlight being shined on a greater cause – the charge against illicit trade.

The Core of Authentix Comes to Life

Like many organizations, we have our core values that drive how we engage internally and externally. I am most proud of this team because those values come to life with such recognition. This Frost & Sullivan technology award symbolizes validation of our strategy in the authentications market.

All employees seek to focus on the following core values:
Teaming and Collaboration
Advancing Science
Dedication to Client Success
Competing and Winning

This third party validation imparts depth to those value statements that demonstrate more than words on paper. We are laser focused on creating a path where our clients have visibility to their supply chain to efficiently address illicit activity. While the Authentication Solutions Technology Leadership Award speaks to how we are advancing science to create successful outcomes for our clients around the world, I know that this award also demonstrates a group of people who respect and trust each other enough to innovate for a greater good.

Recognition for a Greater Cause

To have Frost & Sullivan acknowledge that Authentix offers leading authentication technology touching across multiple industries is one thing. To also have confirmation that our strategy and execution in the marketplace is meaningful toward a social good is even better.
Oftentimes, this activity is funding organized crime or terrorist groups. In the oil and gas market, we are helping companies fight against fuel smuggling, adulteration or dilution, which can impact the environment and ultimately people’s health. So, this award also confirms that our focus on innovation is contributing to a larger platform that encompasses protection for the health and well-being of the environment and all who inhabit it.

Thank you to Employees and Customers

Yes, our employees carry the brunt of this accomplishment. But, we can’t ignore the greatest collaboration effort with existing customers. Illicit trade is a huge and sometimes dangerous global problem eating away at billions of dollars of lost revenue for many governments and companies. We are very grateful to have a customer voice moving our technology forward because they too recognize a bigger issue.

Every day we enter our doors with the intent to make a difference. We want to make a difference for our customers. We want to make a difference in the lives of our fellow employees. More importantly, we want our solutions to make a difference within the communities around the world.

The North American Authentication Solutions Technology Leadership Award from Frost & Sullivan is one more proof point that our suite of authentication solutions protecting fuel quality for national governments or oil marketing companies, banknotes and commercial brand products is making a difference to stop illicit trade.

The Harmful Implications of Illicit Fuel Trade—the economy, the people, the environment

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Author: Andree Bourgeois

Written by: Kevin McKenna, President, Oil & Gas, Authentix
Stop Fuel Fraud Series

People often ask me what I do for a living. When I state that I manage a business that helps detect and deter illicit fuel trade, most of the time the response is a confused look and the question, “What is illicit fuel trade, and is that really a problem?” My quick answer is that illicit fuel trade is likely the biggest problem that you have never heard of. The first step in tackling this menace is to shed light on its existence and the harm it inflicts on society.

For the past couple of weeks, we’ve produced some different blog posts discussing illicit fuel trade, a major worldwide problem stealing billions of dollars from governments, legitimate businesses, and consumers. “Illicit trade” can be the simple case of outright theft, which is very prevalent in Mexico today, where the state oil company, Pemex, says it lost about $1.6B in 2016 from fuel stolen from over 6,800 pipeline taps across the country. Another scheme of illicit trade is made possible by exploiting the differences in price between fuels or other petroleum products because of tax differences, subsidies, different grades, or product types (e.g., adulteration with non-fuel products such as solvents or waste oils).

Why fuel fraud is hard to detect

In both cases of illicit trade, the execution of the crime is simple – take a lower price (or stolen) product and either mix it with a higher priced product or replace it outright – sell the fuel at full price and pocket the difference. Even small differences in product prices can generate massive returns for criminals due to the sheer volume of petroleum products consumed every day. The crime is further enabled by the difficulty in detecting when it is perpetrated.

What does this mean to you?

Most consumers never see the road fuels that they purchase, and even if they did, an illicit product may look the same as legitimate product. If as a consumer, I unwittingly buy adulterated fuel at the premium price, obviously, I don’t get what I paid for; but it can also damage the engine of my car, reduce my fuel economy, and increase air pollution. The government doesn’t collect the taxes it needs, legitimate businesses suffer from unfair competition, and the reputation of oil marketing company brands may be unfairly tarnished.

At Authentix we believe that a system of fair and open commerce serves as a powerful agent for good throughout the world. When this system is compromised by illicit trade, civil society is weakened. The scope and scale of illicit fuel trade is particularly damaging in this regard – diverting money to organized crime and, in some cases, terrorist organizations, while defrauding governments of tax revenue necessary to fund programs in the service of their citizens. In many cases these taxes are a significant portion of the country’s total tax revenue – any shortfall in collection may necessitate higher taxes in other areas, placing an even larger tax burden on the populace.

The only people benefiting are the criminals perpetuating the crime – and it is BIG business. Our experience in several countries is that the illicit trade rate in the fuel supply chain was over 30% – translating into hundreds of millions of dollars each year lost to criminals in each of these countries.

Time to disrupt the business of illicit fuel trade

Fuel Marking Programs (FMPs) are a highly effective means to redistribute illicit gains away from organized crime and savings toward legitimate businesses and Government, while ensuring consumers get the quality products for which they have paid. In weeks to come, we will dive into FMPs and how we have seen FMPs assist governments in enforcement of policies prohibiting illicit fuel trade. Many of these programs deliver a significant return on investment of usually five to 10x the cost of the program.

I hope you recognize the lasting implications illicit fuel trade has on all of us. Usually after an awakening to how people’s everyday lives are affected, the next question is typically, “Why isn’t every government doing an FMP?” My personal opinion, it’s the same reason that most citizens aren’t aware of the problem and the harm it brings to their community – something we at Authentix are working diligently to change.

Click here to learn more about how Authentix’s Vigilant® offering is helping governments prevent fuel fraud. You can also learn more about Assure™, our brand protection fuel marking program for oil marketing companies.

Frost & Sullivan Applauds Authentix’s Impressive Authentication Technology Portfolio that Combats Illicit Trade

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Author: Andree Bourgeois

Authentix harnesses the latest technological trends to present market-focused, adaptable authentication solutions for a customer’s specific market

SANTA CLARA, Calif. — July 11, 2017 — Based on its recent analysis of the authentication solutions market, Frost & Sullivan recognizes Authentix, Inc. with the 2017 North American Technology Leadership Award. Authentix’s portfolio of advanced authentication solutions supports companies in combating illicit trade and counterfeiting practices. The company’s solutions capitalize on the evolution of Mega Trends such as Internet of Things (IoT), Big Data analytics, and supply chain integration technologies to thwart counterfeiting measures. Authentix employs a lock-and-key approach, wherein physical devices are paired with proprietary chemical markers, creating offerings that deliver robust, data-driven authentication solutions helping customers recover lost revenues and protect brand equity.

Click here to view the multimedia release.

“Authentix seeks to aid customers with their transition to more IoT-based operations by capturing data at each point in the authentication process to ensure that any enforcement actions are based on secure and accurate information. This starts when authentication markers are applied to products and continues when markers are tested for or scanned in the field or at a laboratory as the product moves through a supply chain. The results of these tests and scans aggregate into a single data platform for easy verification,” said Frost & Sullivan Research Analyst Danielle VanZandt. “With Authentix’s solutions, customers can monitor their supply chain interactions, identify potential areas of vulnerability, and receive actionable insights, facilitating proactive decision-making to mitigate illicit trade.”

Authentix remains the only end-to-end authentication solution provider for fuel supply protection, combining the devices and covert markers with the Authentix Information System (AXIS®) and comprehensive Authentix services and support. The company also has a robust portfolio of proprietary authentication solutions for major industry verticals:

• Vigilant™: Authentix’s flagship, this authentication solution protects national fuel supplies globally. The solution helps governments and in-country fuel suppliers fight fuel dilution, smuggling, tax evasion, and illicit trade. Vigilant recaptures valuable fuel excise tax revenues for government customers, ensures top fuel quality for citizens and the environment, and creates a level playing field for all participants in a country’s fuel market.

• Jewel™: This solution allows Authentix to partner with global central banks to protect and authenticate banknotes. The Jewel optical markers, read with its high-speed sensor technology, can be easily integrated with any banknote design and deployed on high-speed note sorters to validate the authenticity of individual banknotes. Additionally, Authentix provides implementation services in tandem with banks to ensure a seamless transition.

• Sherlox™: Sherlox is Authentix’s brand protection solution. Validated with a proprietary handheld reader and cloud technology, Sherlox utilizes covert markers to enable in-field authentication instantaneously through smart mobile devices during brand audits.

• Assure™: Assure is the company’s proprietary fuel brand marking solution. Assure helps major, global oil marketing companies provide consumers with the fuel product quality they pay for and to guarantee that specific fuel additive treat rates are accurate.

“With the success of its solutions, Authentix continues to grow within mature markets. Its deep and rich experience and industry knowledge allow it to showcase the value of its authentication solutions and the ways in which they can generate a rapid return on investment,” noted VanZandt. “Leveraging trusted customer relationships and continuously focusing on the customer’s needs will win Authentix significant customer and revenue growth over the long-term.”

Each year, Frost & Sullivan presents the technology leadership award to the company that has demonstrated uniqueness in developing and leveraging new technologies that significantly impact both the functionality and the customer value of the new products and applications. The award lauds the large R&D spend toward innovation, its relevance to the industry, and the positive impact on combatting illicit trade.

Frost & Sullivan Best Practices Awards recognize companies in a variety of regional and global markets for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analysis, and extensive secondary research to identify best practices in the industry.

About Authentix

Authentix, a leading global authentication and information services company, assists customers in combating illicit trade and managing the integrity of their global supply chains. With comprehensive end-to-end authentication solutions, we help safeguard customers in refined fuels (e.g., gasoline, diesel, lubes, and LPG) and branded products (e.g., pharmaceuticals, agrochemicals, and spirits industries) from counterfeiting, product theft, product diversion, and adulteration. In addition, we help protect currencies for many leading central banks.

Headquartered in Addison, Texas USA, Authentix, Inc. has offices in the US, UK, UAE, Saudi Arabia and Africa serving clients worldwide. For more information, visit http://www.authentix.com.

About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, collaborates with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants. For more than 50 years, Frost & Sullivan has been developing growth strategies for the global 1000, emerging businesses, the public sector, and the investment community. Contact us: Start the discussion.

Contact:
Claudia Toscano
P: 210.477.8417
F: 210.348.1003
E: Claudia.Toscao@frost.com

There Are No Shortcuts To Safe Medicines

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Author: Andree Bourgeois

The Partnership for Safe Medicines® recently hosted a panel briefing of several former federal law enforcement officials and public health experts to discuss the merits of recent prescription drug importation proposals[1]. The panel highlighted one of the often overlooked aspects of these proposals aimed to quickly reduce the cost of prescription drugs to patients in need in the United States: the safety of these drugs that would circumvent current FDA regulated domestic supply chains.

Certainly the promise of lower cost prescription drugs is a powerful message to an electorate that sees the costs of these medicines continue to rise while stories of lower cost drugs in other parts of the developed world also make headlines. But those other countries have carefully negotiated and managed supply chains with pharmaceutical companies that ensure the safety of their drugs and often make it illegal to fill a prescription from outside the country. Such is the case in Canada, where Canadian pharmacies cannot fill prescriptions for U.S. patients. Instead, internet pharmacies that claim to be Canadian import drugs or counterfeits sell them to unsuspecting consumers. Like it has for so many other industries, the internet has enabled easy access of buyers and sellers, but with little accountability for product quality or authenticity. Consumers are left to trust the supplier is legitimate, often with no means for recourse if there is a problem.

So why not simply empower the FDA with oversight on importation of drugs from other countries to help ensure safety? That’s a reasonable proposal, but one that will undoubtedly add to the cost of importation. Furthermore, this is not a U.S. only policy problem. For example, if the U.S. and Canada were to legalize the import/export of drugs between the two countries, what would be the effect on Canadian drug prices? In 2014, total Canadian expenditures on prescription drugs was estimated to be $29B[2]. By comparison the United States spent $374B[3]. Even a mild influx of orders from the U.S. could stress the Canadian system, more importantly Canadians, affect pricing since drug companies will be forced to negotiate with Canada as an international supplier, and not a domestic single payer system, certainly driving up costs for Canadians.

The U.S. has left the pharmaceutical industry largely unregulated when it comes to pricing. We have no single payer system, we do not place limits on pricing, and we let the profit motivation of the free market system drive pricing, profit, investment, and innovation. And while we can certainly feel the effects of rising drug costs, we can also see that this system has of its own accord driven us to greater and greater innovation for treatments and cures, and has created a very secure supply chain for the sale and distribution of those medicines. There is almost certainly some kind of change and reform coming to healthcare costs in the U.S., and the pharmaceutical industry will have its part to play, but compromising safety cannot be part of the equation.

Counterfeiting and diversion of medicines and medical products are global issues that affect all countries. These illegal activities threaten the health and welfare of the citizens who receive fake or substandard product, as well as threaten the revenues of brand owners. These activities also undermine the efforts of the government to ensure the availability of affordable drugs to its citizens, thus enabling the proliferation of disease, which can lead to development of drug resistant pathogens.

Authentix is dedicated to the development of products and services that allow the authentication of products and their packaging in supply chains around the world. Authentix provides integrated programs that enable manufacturers to protect their products in complex supply and distribution chains, and informatics to monitor and report on problems as they become apparent.

For more information visit http://authentix.com/offerings/sherlox/.

1.) http://www.safemedicines.org/2017/04/the-fallacy-of-drug-importation.html
2.) https://www.cihi.ca/en/canadians-spent-288-billion-on-prescription-drugs-in-2014
3.) http://www.latimes.com/business/la-fi-drug-costs-20150414-story.html

Authentix Announces Jewel Accredited & Certified Partners for Banknote Security and Authentication

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Author: Andree Bourgeois

ADDISON, Texas, Dec. 1, 2016 /PRNewswire/ — Authentix®, a leading global authentication and information services company, is pleased to announce that five currency industry organizations have completed the Jewel Certification program. Jewel Certification enables industry suppliers to become more familiar with the design and incorporation of Jewel into the banknote. As part of the process Authentix transfers best practices in the handling, use and quality checks of the feature. Support for a trial to demonstrate incorporation into the ink, varnish, substrate, or finished banknote is also provided.

Jewel is a complete Level Three security platform involving proprietary materials, QC equipment, and specialized sensors to be used by the Central Bank for confirming the presence and correct response of the feature. Jewel is characterized by its high security, durability and ease of incorporation via a wide range of implementation options. Jewel is in use by several leading Central Banks and has been developed in response to the Central Bank’s need to dis-aggregate their supply chain in order to have more options as they strive for highly secure and cost effective currency designs.

“Central Banks increasingly want choice and to build best of breed solutions to stay ahead of counterfeiting threats,” says Tim Driscoll, General Manager of Authentix’s Currency & Tax Stamp Business. “Authentix has partnered with six of the most respected names in banknote substrates, inks, design and printing. Central Banks are assured of continuity and choice when selecting Authentix Jewel.”

Accredited and certified partners include respected names in banknote security such as Landqart AG, PNO Global, Royal Joh. Enschedé and Arjowiggins Security. Authentix will continue to grow the partner program in both size and offerings.

Although Authentix will support all industry suppliers in meeting a Central Bank’s specification for the incorporation of Jewel, Certified partners are uniquely positioned to support the Central Bank’s needs with established competency in print trials and marketing the offering.

About Authentix:
Authentix, a leading global authentication and information services company, assists customers in combating illicit trade and managing the integrity of their global supply chains. With comprehensive end-to-end authentication solutions we help protect currencies for many leading central banks as well as help safeguard customers in refined fuels (e.g. gasoline, diesel, lubes, and LPG) and branded products (e.g. pharmaceuticals, agrochemicals, and spirits industries) from counterfeiting, product theft, product diversion, and adulteration.

Headquartered in Addison, Texas USA, Authentix, Inc. has offices in the US, UK, UAE, and Africa serving clients worldwide. For more information, visit http://www.authentix.com/offerings/jewel/

 

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