Sproxil Innovative Solutions to Counterfeit - The Market Immplications

By Lukmon Sumola

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. 10 4............................................................................... 10 5......................................1..Table of Contents Table of Contents .1...........................................................................................................................................................................................................8 Technological development .............................................................0 Recommendation .1.................0 The attractiveness of the market Segment Sproxil Operates......................................................8 3..........................................................1 Inbound Logistics: ..............0 Six Thinking Hat as an Improvement Mechanism .................................................................................................................................................................6 3................................3 1............. 9 3...........0 Introduction .................8 3...........2 Operations ................... 12 2|Page ...........................................5 Services .................................................1.....................................................................1......9 Infrastructure .............................................................................................................. 8 3.......................................................9 3.............................1................................................................. 2 List of Abbreviations ....7 Human Resources .........................................4 Marketing and sales ...........7 3................................................ 10 3..................................................................................0 Reference ..........................................................................4 2............ 4 1................................0 The Counterfeit Products Market ................................................................11 6...................................................................1 Company Profiles ...............6 3..................................1..............................................................................................................................................................................................................8 3..........................................2 Sproxil Solutions to Counterfeit Medicines ...........1......1 Sproxil Value Chain Analysis .....3 Outbound Logistics ............................................ 9 3................................................... 5 2.........................................................6 Procurement ..1..................................

List of Abbreviations The Organisation for Economic Co-operation and Development OECD MPA WHO RFID ERP SC Mobile Product Authentication World Health Organisation Radio Frequency Identification Enterprise resource Planning Supply Chain 3|Page .

Sproxil operates in Africa. electrical cables. However. increase in high speed internet and telecommunication is astonishing. the magnitude and impact compel tougher action from governments. it opens doors for the counterfeit products to travel easily to countries with weak regulatory and enforcement systems. The solution is compatible with any tangible products and widely used by many leading pharmaceutical companies to eliminate multi-billion dollar counterfeit drugs industry. The counterfeiting of pharmaceuticals further highlight the danger.0 Introduction The number of manufacturing products moving backward and forward across global marketplaces due to the integration of world economy. and luxury under wear products. The amount of counterfeit pharmaceuticals sold across border is staggering. It provides substantial business opportunities and challenges. and businesses alike. fake medical products are a major health risk for us all. The fake goods is manufactured across every business sectors and the list of counterfeit products create a daunting challenge to compile. and North America. the socioeconomy implication of counterfeiting cannot be overlooked. Therefore. Sproxil was named 7th most innovative company in 2013 by fast company. It looks into how the company capitalised in the gap in pharmaceutical security market to provide differentiated service offerings that open up a new market and create immense value to their customers. consumers. globalisation. This writing aims to present the innovative solution leverage by Sproxil to eradicate counterfeit medical products market in the less developed countries. we delineate the constituent components of value chain as it applied to Sproxil operations and recommend six thinking hats to bring out workforce creativity.1 Company Profiles Sproxil is a mobile product authentication (MPA) solution provider based in Cambridge Massachusetts founded in 2009. and customers’ customers. government. Asia. such as cosmetics.1. In this article. the third world countries are the likely destination and the breeding ground often used by the counterfeit criminals. The company continue to broaden market share in the industry through expansion into other geographical region and penetration into non-pharmaceutical industries. automobiles. products and services can be purchased from suppliers in different geographical locations. 1. The company provides mobile-based solutions to combat counterfeit pharmaceuticals for the emerging market. 4|Page .

1 The anti-Counterfeit Technologies for the Pharmaceuticals There are many anti-counterfeit technological products available today in the market for the manufacturers. The region with the highest rate of counterfeit products are African countries. to reduce and eradicate counterfeit pharmaceutical. over 100. The accuracy of defining the extent of fake products is a problem. However. minimise death tolls caused by usage of fake products. According to WHO. the ultimate losers are the customers that received suboptimal prescription drugs at excessive price which can sometimes exposed them to health and safety risk or possibly death. obtaining accurate field statistic is a herculean task. and Latin America.0 The Counterfeit Products Market The counterfeit products are found everywhere in the world and in all sectors of the economy.000 deaths globally caused by counterfeit malaria and tuberculosis medicines reported by The British think-thank network. and the estimate varies.000 deaths yearly are linked to counterfeit pharmaceuticals in Africa alone. There are other studies that report approximately $600 billion annual increase in the counterfeit products in the last four years. the investment in technology present the best way forward. discourage counterfeiters. the feature is attached to the pack but it is difficult and expensive to 5|Page . The Organisation for Economic Co-operation and Development (OECD) statistic shows that counterfeit products rate is minimum in the industrial countries but high in the countries where regulatory and enforcement systems are weak. Overt – The overt features enable the end users to verify the authentication of a pharmaceutical product package. In some less developed countries. the counterfeit pharmaceutical fatalities yearly statistic figures can be in the estimate of six figures. wholesale distributors. The estimate of 700. government agencies. of which Counterfeit medicine alone accounts for $200 billion. Therefore. 2. Although. The pharmaceutical industry world-wide loses considerable amounts to counterfeit criminal. Asia. However. the counterfeit products is a multi-billion dollar underground economy producing hundreds of billion dollars fake products yearly. the death tolls is unknown but significant number of people have lost their life. The counterfeit products market is estimated by the OECD to be at region of $250 billion annually in 2009. The existing technologies deployed to fight the counterfeit pharmaceuticals are classified as follows. and improve sales of genuine prescription drugs. In most of these countries. more than 30% of the prescription drugs in the market can be counterfeit.2. and end-users. The technology adopted to fight counterfeit medicines war can varies from one country to another.

3. which then remain with the product throughout it life cycle. The example of Covert include. Track and Trace – It involves assigning a unique identification number to each product unit during manufacture. South America and Africa. embedded image. How sproxil works?.reproduce. Holograms. serialisation. The customers are empowered to act against counterfeit products by utilising there mobile phone to confirm the authentication of every products they purchase to ensure genuine products are purchased at the point of sale. there is a label on the package they can scratch-off to reveal a one-time use product unique code.2 Sproxil Solutions to Counterfeit Medicines The company provides a unique solutions to combat counterfeit products using mobile based verification service. The most popular overt features is the dove hologram used to protect credit cards. According to 2013 Smithers Pira market intelligent report. radio frequency Identification (RFID) etc. Once a consumer purchase a product. and peace of mind for the end-users. They then text the code via SMS to a toll-free number using their respective mobile phone.use require laboratory testing or field test kits to scientifically prove authentication. optical variable devices. The example include. The examples include. laser coding etc. Covert.0 The attractiveness of the market Segment Sproxil Operates The anti-counterfeit market has a significant growth potential in the under developed and emerging economy countries. the anti-counterfeit market is 6|Page . barcodes. The technological solutions offered by Sproxil provides better security. Biological taggants. anti-counterfeit market remain untapped and have high level of counterfeiting. The consumer will then receive instant respond confirming that the product is genuine or warning that it may be a fake. Middle-East. The example include. Sproxil differentiate its service offering from other competitors by leverage the existing growing technology at our fingertips to prevent consumers of being reap off and expose to health and safety risk by the counterfeiters. Forensic Markers. digital watermarks. unique sequential numbering. security graphics etc. reliability. DNA taggants etc. manufacturers and government than many competitors in the market.The covert features have hidden component not visible to outsider. 2. it helps the brand owner to identify fake medicines. In most of the countries in Asia.

The financial outlook of anti-counterfeit market is quite attractive. The product manufacturers will do anything to keep counterfeiters at bay. IBM cloud services and track and trace technological system to provide exceptional value-added services tailored to the specific market segment. Sproxil must design a defensive strategy to protect and grow its current market share. Although.expected to worth about US$79.6% from 2009 to 2014. and the external factors of five competitive forces swing in favour of Sproxil at the moment. it is the idea of viewing organisation as a system made up of subsystems each with inputs.1 Sproxil Value Chain Analysis Sproxil used a simple but effective solutions. The question that come to mind now. of which all the activities are interlinked and act as a complete business system. producing. administration and management. building. the compound annual growth rate is estimate at 8. The concept of value chain is based on a process view of an organisation. The innovative solutions leverage by the company to combat counterfeit pharmaceuticals created unrivalled competitive advantage. transformation processes and output that acquire and consume resources. Porter (1998) further stated that how company manage value chain activities determines costs and affect profit. materials. These discrete activities a company perform in designing. In the form of labour. software and hardware suppliers are the major worries that pose high threat to the Sproxil existence. Combining mobile network. marketing. is that. how sustainable is the competitive edge enjoy by the company at the moment. the company could earn attractive return on investment. The source of Sproxil competitive advantage stem from series of activities the company perform to deliver valueadded services the customers are willing to pay for. 7|Page . Being the early adopter. The substitute brand in the market technology systems are not as effective. The two main categories of business activities identified are primary and support activities. The industry competitors will need to reinvent the wheel to retain the market share. delivering and supporting was coined by Porter (1998) as a value chain. money. land. equipment. 3. According to Porter (1998) it is necessary to examine all the activities a company performs and how they interact to analyse the source of competitive advantage.3 billion by 2014. the new entrant to the market posed low threat due to setup cost and technological knowhow. To sustain its market position. The backward integrations from the mobile network.

give medical advice. 3. store. It is at this point the company will act as a direct link between the customers and their end-users 3. Sproxil receive and store products data on IBM cloud services and also pass information to the customers (Pharmaceutical companies. The manufacturers have now tag the finished products with a covered unique identification code already in Sproxil system.3 Outbound Logistics It relates to the relationship Sproxil have with the customers and all the activities required to collect. Cable Company etc) on the customers’ customer purchase experience. The backend system response to SMS text message in real time alerting consumers of fake/nor fake or stolen products. and escalate counterfeit or stolen products.1. It uses the national mobile network to disseminate information back and forth to their customers’ customer and relied on third party company for products serialisation. 3.1 Inbound Logistics: This involve the partnership relationship Sproxil build with the suppliers of the frontend and backend technology system the company used to carry out its daily business activities.1.2 Operations All the activities Sproxil required to transform input into outputs to satisfy their customers (The consumer. geographical locations etc to improve customer service. The customer support desk designed to give 24/7 support to their customers’ customers by providing assistance during verification process.1. the distributor and the brand owners). The daily operations will include collection of products data from the manufacturers.The primary activities consist of the following: 3.4 Marketing and sales 8|Page . The national mobile network carrier. through integrated ERP system between Sproxil and the customers. The backend system will use the data to monitor customers products as it travel through the supply chain pipeline until it finally consumed. Sproxil will now monitor the products movement as it travels from the manufacturing factory to the regional distributors’ warehouse. and distribute the output. the IBM and the hardware vendors.1. and to the individual pharmacy being stored until the product finally consume.

5 Services It includes all the activities required to keep the services provided by Sproxil to be working effectively for the customers.7 Human Resources 9|Page . Sproxil’s client portal provides access to pharmaceutical manufacturers concerning pharmaceutical sales. 3. Technological development. The code counter on the website used as a testimony to show that the service is effective and efficient in combating fake pharmaceuticals and that people are using the services. Sproxil prepare a unique service offering that meet specific needs of the customers and focus on delivering of exceptional value difficult for prospect customers to turn down. each activity have numerous distinct value activities. due to the nature of the solutions the company provide. stolen drugs. and other consumable items.Procurement.1. Porter (1998) tells us that support activities are divide into four generic categories. The company outsource all components or operations that cannot be performed in-house without incur high cost to third-party company to concentrate on core competence. In addition. Sproxil offers exceptional customer service to the customers’ customer at zero cost.1. stationery etc. It partners with all local mobile network providers to ensure that the confirmation SMS text message is at no cost for the end users.6 Procurement The function responsible for all the purchasing of materials. persuade buyers to purchase their solutions and facilitate their purchase. and Infrastructure. 3. Sproxil supports anti-counterfeit campaign to raise awareness of it services and lobby the countries policy makers and the regulators. The company respond on time to customers’ customer queries and formed a partnership arrangement with their key customers. This will includes the building sproxil used to carry out its operations. which includes:. the office equipment. services. 3.1. hardware and software. The company use various medium of market communicate tools suitable to the targeted region to promote its products.It refers to all activities Sproxil deployed to inform prospect client about the services the company provides. Human Resources. and suspected counterfeit.

The concept is a way of putting parallel thinking into practice instead of argument that yield no immediate result. compensation. management. an important human capital the company cannot do without. technological system is the backbone of Sproxil operations and the source of the company competitive advantage. It is an evolutionary way of focusing thinking in one direction. finance. Mobile App. everyone adopt the style of thinking and behaviour associate with the hat think. Track & Trace solutions. The only inimitable and nonsubstitutable source of competitive advantage. When a hat is put on. Partnering with IBM help Sproxil to benefit immensely from the cost saving associated with the cloud environment. IBM ILOG Elixir Enterprise.1. The six thinking hats are to be worn one at a time as each hat define different thinking. selection.0 Six Thinking Hat as an Improvement Mechanism The method of Six Thinking Hat is a brainchild of Edward de Bono. 4.9 Infrastructure It consists of numerous activities including planning. 3. Sproxil uses different software application system and hardware to perform it operations.It consists of all the activities involve in recruiting. The company invest in staff development program and training.8 Technological development Technology is essential for every business in the modern era. training and development. In fact. such as 2D capturing software. and government affairs. While at the same time. 10 | P a g e . quality management. IBM cloud service etc. he used six metaphorical hats with different colours to describe certain way of thinking. In Sproxil. accounting. employees are considered as the most vital resources. It is used to perform a range of value-added activities to carry out the day to day business operations. 3. it enables everyone to think together in parallel and on the same page cooperatively. and maintenance. Effective management of all sproxil information and technological systems can contribute significantly to the company cost position.1. service offerings quality lapse will have direct implication on revenue thereby threat the market position of Sproxil. according to Porter (1989) every value activity embodies technology.

about generating new ideas. control. and critical. for Sproxil to sustain and improve competitive position. It is use for thinking about thinking. and continue to provide value-added services customers are willing to pay for. though. It is for caution. The company must create a learning workforce through education and training to promote innovative skills within. concepts. 5. The individual market players will continue to fight to widen their market share and extend competitive advantage. It a creative hat. It is about hope and positivity. risk assessment. find possibilities and alternatives. Deployment of De Bono literal thinking tools in Sproxil will ensure that all workforce are thinking in the same direction cooperatively. and perceptions. When employees are committed. standing still mean falling down. intuitions and emotions. and taking overview. Education and training is a predictor of employees’ commitment and job satisfaction. it is easy to be overused. It help find benefits and value in a situation. The logical positive. Investment in six thinking hats training to invent constructive medium of thinking among workforce bring huge benefits. Thinking together in parallel will improve meeting time and boost innovation. It should not be overused. Therefore. especially in generating creative and innovative ideas. It is about feelings. 11 | P a g e . It is about process. It can be dangerous when overused. It is possibly the most useful hat.0 Recommendation The anti-counterfeit technologies market is growing at a rapid rate. When this hat is put on.The six thinking hats are characterised by the following colours – White Red Black Yellow Green Blue It focuses on information and data. they stays with the company through thick and thin. The white hat is neutral and objective. The training should start from the top management cascading downward to the floor workers. Sproxil cannot continue to rely and depend on the old recipes. and shares company goals. The hat allow you to present view without justification and explanation. everybody is creative.

J.int/impact/FinalBrochureWHA2008a.. UK. Viewed on 6th Nov. 2013 on http://www. 2013 Bono. Publisher.com viewed on 5th Nov. 1–13. IMPACT (2006-2010) International Medical Products Anti-Counterfeiting Taskforce. Pp.. (2012) Anti-Counterfeit Technologies: A Pharmaceutical Industry Perspective Sci. 12 | P a g e .1. K.harvard. MacGuru Ltd. Pharm.pdf viewed on 5th Nov. D.hks.who.pdf Porter. Italian Medicines Agency (AIFA). & Stevens. (1985) Six Thinking Hats: An Essential Approach to Business Management.2013. Gudala.org/documents/data-and-analysis/tocta/8.sproxil. Viewed on 6th Nov. 81.0 Reference http://www.unodc. P. M. no. Bansal. Vol. http://www. Malla. E.. and Tiwari.Counterfeit_products. S.edu/var/ezp_site/storage/fckeditor/file/Morris_Stevens.6. (2006) Counterfeit medicines in less developed countries: Problems and solutions.. 2013 on http://www. publisher. P.pdf Morris.E (1998) Competitive Advantage: Creating and Sustaining Superior Performance.D.