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Textile counterfeiting DNA to improve supply chain integrity

September 18th, 2015 / By: / Feature

ADNAS1In an era of false profits, it is incumbent on every manufacturer of consumer-facing products to ensure that their supply chain is intact and honest. Counterfeits sometime share no common content with their originals—original models that are marketed by those companies who worked (and spent) hard to establish their markets and deliver honest claims.

Other times, however, profiteers damage markets and consumers by simply diluting the original product whose claims they steal. This is a known practice to counterfeiters of pharmaceutics, spirits, coffee—and textiles. It is a practice that affects virtually every commodity in which high- and low-priced species comprise the market, and in which quality is governed by cost of goods.

The scope of the problem

Counterfeiting is such a common practice that in some industries it is considered a rite of passage. Your brand simply has not arrived if it has not been copied. The International Chamber of Commerce estimates the “counterfeit economy” to exceed $1.7 trillion this year. Textiles appear to dominate the shadow world with 50 percent of all illicit goods seized by U.S. Customs and Border Patrol classified as counterfeit textiles and apparel, according to Frontier Economics. A market survey by Applied DNA Sciences showed that 89 percent of cotton sheets and pillowcases were non-compliant with their label claims.

The results of counterfeiting—degraded or dangerous consumer product; financial, reputational and liability damage to companies—are the symptoms of a supply chain out of control. Beyond damaged markets, companies and consumers are becoming vulnerable to serious risk of morbidity: textiles and textile dyes that are polluted, even with carcinogenic substances. In our opinion, California’s new Transparency in Supply Chains Act signals a new wave of liability and ethical questions surrounding the health and safety of workers worldwide, including issues of slavery and human trafficking in the textile industry.

The textiles and apparel supply chains, extending right up through finished goods, are rife with product that does not match its label or documentation. Wool, cotton, synthetics and specialty fabrics are all impacted. To the consumer, counterfeits are hard to detect when a label identifies a quality fabric, which, in fact, does not contain that fabric or contains a diluted version. In clothing, footwear, sheeting, uniforms and protective wear, consumers are in increasing danger of getting far less than what they think they purchased.

Meanwhile, retailers and brand-owners can be exposed to enforcement risks from the Textile Act, enforced by the Federal Trade Commission, and the Lehman Act, which prevents competing by use of false claims and is enforced by the Department of Justice.

Controlling the supply chain:

Making the decision to control a company’s textile supply chain is a true 21st-century issue, and an urgent one that needs addressing not only by the retail brands, but the entire supply chain must take responsibility for their “link” in it. This is not an easy problem to solve and it takes collaboration to pinpoint the gaps and mutually agree to close them. Two major issues are fiber substitution and origin laundering.

Fiber substitution

Long before textiles reach the consumer in the form of finished goods, the root of the problem may be traced far “upstream,” starting with raw fiber or unprocessed spun yarn (greige goods), which may be “blended” but labeled as 100 percent Pima cotton, for example.

The problem of blending, or fiber substitution, is particularly acute with upscale fibers such as cashmere, merino wool and luxury cotton such as American Pima and Egyptian Giza. Too often, when a luxury fiber is sent abroad for manufacture of sheeting, towels, or apparel, the original fiber content is blended with other lower quality fiber, reducing costs and falsely improving profits for the cheater—and inevitably producing lower product quality.

Driven by the goal to maximize profits, some yarn suppliers, spinners and even fabric manufacturers may presume that their fabrics will not be subjected to testing, and, therefore, the deception for the perpetrator continues with little or no enforcement.

Origin laundering

A different form of textile identity fraud, but just as pernicious, has been called “origin laundering.” In this case, the point of origin of textiles or apparel is hidden, or simply whitewashed by trans-shipping through a midpoint. One outcome, much in the news now, is the potential to undermine free-trade agreements between the U.S. and countries worldwide. Another is the ability to circumvent fair trade, sustainability requirements, human trafficking and other agreements, or other labeling based on specifying a point of origin.

Potential losses for companies extend to market share, brand reputation, stolen IP, liability to recall, potential legal and accounting costs and even criminal action. Even quality growers and manufacturers, whose every interest is in shipping pure product, share in these risks and losses, having partially lost control of their supply chains. Reputational and market competitive issues may taint an entire segment of an industry, or even of an entire nation. And loss of market share inevitably means loss of jobs.

Furthermore, in the case of specialty fabrics, health and safety may be at risk, even as a matter of life and death. Counterfeit flame-retardant material may be defective, with obvious dire consequences. Fabric coatings, which are designed to block dangerous UV radiation on clothing, canopies, tents and other materials, are widely counterfeited, again with obvious health consequences.

The bottom line: in all cases, cheating through mislabeling or false documentation is a form of theft and, ultimately, a crime. By recapturing control over the supply chain, it’s a crime that can be prevented.

A fiber to finish solution

Anxiety about supply chain lapses, and mislabeling of product is prompting some retailers to step up their use of technologies, initially through genotyping, as a supply chain diagnostic, then applying a unique botanical DNA marker, authenticated at each stage throughout the supply chain, in order to close the loop on supply chain lapses.

The results of instigating this type of technology include:

  1. Quality control by verifiable authentication at each stage of the supply chain
  2. Traceability with a bird’s-eye view, in real time, offering a holistic transparency in the chain of custody transfer
  3. Brand protection with court-defendable evidence for internal and external investigations
  4. Results that have measurable benefits

Driven by the need to help supply chain managers and brand owners with solutions to help with traceability, authenticity and quality, Applied DNA Sciences developed a botanical DNA-based platform, offering a proven forensic solution that stands up to the harshest textile treatments and coatings, and is admissible as forensic evidence in court.

Fully customizable, the botanical DNA platform offers three core solutions for textiles and apparel applications:

  1. fiberTyping®, a test of native cotton fiber only, it gives a clear result that determines whether the original cotton DNA is present in the fiber, yarn or fabric. Specifically, it is a patented DNA test that provides a means to verify original Extra Long Staple (G. barbadense) fiber cotton content, from raw fiber to greige to finished goods.
  2. SigNature® T, a unique forensic identity marker that remains present from fiber stage through finished garment on a retail hanger and beyond. Applicable to any natural or synthetic fiber, yarn, fabric, or finished goods, these markers cannot be copied or simulated.
  3. SigNify®, DNA authentication of the SigNature T mark at each stage throughout the supply chain. This provides forensic proof of origination and allows brands to back up their label claims to the end consumer.

This patented system enables retailers and brands to protect their products from the fiber all the way to finished goods. In this way, every one in the supply chain can be sure that their products are fully source verified, preserving the quality, integrity of premium textile goods.

This provides the necessary product claims substantiation consistent with corporate Quality Assurance and Compliance policies, as well as U.S. labeling and consumer protection laws. Brands and products can be protected, which means that products can meet consumers’ expectations.

John Sherman is executive director of marketing, MeiLin Wan is executive director of textiles and product development, Anna Stec is manager of textiles and project development, and James Hayward is president and CEO of Applied DNA Sciences.