Faking it: who pays the price?
March 1st 2008

Counterfeiting may not be new. But it's a growing global menace, with its roots in organised crime. It costs governments and taxpayers countless billions every year. Consumers are ripped off and sometimes put at huge risk

Any company that cares at all about quality, brand reputation and social responsibility – not to mention its customers and employees – ought to run a mile from buying counterfeit products.

And yet it's no longer just fake luxury and consumer goods that are flooding European markets, but industrial products too – even safety-critical components such as roller bearings.

For the industrial sector, the growing risk of counterfeit products is extremely serious, and can lead to grave consequences for any company that buys and uses them.

Quite apart from contributing, innocently or not, to industrial piracy on a global scale, the problems can very quickly hit much closer to home.

The most immediate risk is that fake parts can and will fail prematurely – causing severe damage to machinery, and resulting in costly downtime, lost production output and increased maintenance costs.

But health and safety can also be catastrophically compromised for those using the machinery. Recent discoveries in Europe have highlighted the growing nature of this problem with over 3500 industrial accidents per year due to poor quality fake products.

And it goes without saying that anyone who has bought counterfeit products can expect no redress from the manufacturers for any costs, liability or claims.

Brammer is Europe's leading distributor of maintenance, repair and overhaul (MRO) products – and understands only too well the importance of maintaining production line integrity and the financial impact of downtime.

Alarmed by the potential danger of counterfeit parts to business, the company is calling for a far greater awareness of the risks, and of the importance of using authorised distributors – who provide the only certainty of guaranteeing product quality, traceability and manufacturers warranty cover.

But the problem runs deep.

Manufacturer's must manage the conflicting pressures to improve production by reducing downtime at the same time as reducing maintenance costs.

This relentless drive to stay competitive influences some companies into decisions based on unit price rather than total cost and performance.

The chance to get components cheaper can lead companies toward unauthorised distributors with their lower overheads and seemingly lower costs. However, any decision to choose an unauthorised distributor can potentially compromise machine performance and safety. Products from an unauthorised source are often not to the latest specification, have been incorrectly stored and handled and a lack of industry specific expertise can result in wrong fault diagnosis. It can also mean bearings that are counterfeit.

Brammer's managing director Ian Ritchie argues for a very different approach: 'Companies need to understand the importance and relevance of the total acquisition cost, rather than just the piece part cost. To maximise production efficiencies downtime must be minimised, which in turn means guaranteeing the quality and performance of components and equipment.

The counterfeiting opportunity can also arise when a company is not 100% vigilant in the control of its MRO spend. If purchasing within a company is not controlled, and directed through the authorised distributor route, then this can potentially 'let in' counterfeit product and place the business at risk 'through the back door'.

The benefits of using an authorised distributor, according to Brammer, far outweigh any short term cost argument.

Authorised distributors offer the reassurance of genuine and quality assured products, consistent part numbers, instant confirmation of availability, total product traceability, and full manufacturer's warranty.

"We cannot emphasise enough how important it is to buy branded products only through authorised distributors," says Ritchie. "Not only do counterfeit parts have serious economic impacts which damage the ability of genuine manufacturers to invest in R&D, customer support and innovation, but more importantly they can have extremely serious consequences for the companies that purchase them.

"Brammer is Europe's largest distributor of bearings and offer customers a choice of global leading quality brands. We feel it is as much our responsibility as our supplier partners to draw our customers' attention to this major and growing problem, and its potential repercussions. For those who use counterfeit products, either knowingly or otherwise, the risks are much greater than any potential short term saving."

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