AmorePacific: The First to Implement, Industrial 4.0 Technology to Combat Counterfeits

In the fast paced world of the beauty industry, many companies are racing to keep up with the constantly change of beauty trends. AmorePacific, world's 7th largest cosmetic company, has become one of the few leading companies that has been able to keep up with the industry’s demand, deliver fast results and eliminate counterfeit products through an innovative approach.

What were the problems AmorePacific faced?

In order for AmorePacific to maintain their market leadership in the cosmetic industry, AmorePacific must continue to keep their brand value, and increase brand awareness. AmorePacific found this to be difficult because various counterfeit cosmetics were being produced all over Asia. Over the past years, many industry leading cosmetic products have been illegally duplicated and were sold at a much cheaper price, tarnishing their brand image and losing consumers trust. Therefore, many companies have increased their anti-counterfeit efforts to protect their brand name. AmorePacific has been a victim in several instances of counterfeit issues and have tried to find better ways of preventing this major issue.

Why was AmorePacific facing these problems?

In emerging markets, various suppliers around Asia find it more lucrative to create side deals and personal revenue from selling fake high end products. Packaging of well known brands could easily be produced, labelled, and sold in the market. These products will continue to affect many industries, including cosmetics. Eliminating unauthorized access to molds will decrease the number of counterfeit products produced. Knowing and tracking all your physical assets will be important for companies to have control over the production of their products.

AmorePacific discovered that ensuring their molds were being used correctly and in the right facilities were key to reducing the number of fake products. Moreover, due to not knowing their mold's locations, allowed for other suppliers to potentially use AmorePacific's molds to produce counterfeit products. Without knowing the location a supplier who originally was contracted to use the mold in South Korea, the supplier could illegally take the mold and use it in China without AmorePacific knowing. This causes their tooling to be overused, their products to be duplicated and their brand value to decrease.

Another problem was the unauthorized use of AmorePacific molds at the supplier's facilities. For example, during the daytime suppliers may use AmorePacific's molds to create their products and during the night it could be used for counterfeit activities. This also lead to the counterfeit issues AmorePacific faced. By tracking mold activity, AmorePacific could determined if the number of shots matched the number of products produced. If 100,000 shots were made and only 50,000 products were delivered than the remaining 50,000 shots could potentially be counterfeit products being produced.

How AmorePacific tackled its pain points?

AmorePacific conducted research to evaluate many different solutions to their problems such as digital and mechanical trackers and sensors which could help with their problems. AmorePacific searched for a mold management solution which could help track the activity and location of their molds. Upon discovering eShotLink, a wireless mold counter, AmorePacific immediately saw the need to implement the counter to its suppliers' manufacturing plants. The eShotLink tracks a mold’s shot counts, cycle times, location and 10 other data sets and transmits this data to a terminal wirelessly. The collected data was then sent to a cloud based system, allowing them to instantly track and monitor the status of their molds.

With this data, AmorePacific gained insight on how to resolve one of their biggest challenges: counterfeiting, by monitoring molds locations and shot counts. They eliminated the possibility of unauthorized use of their molds within supplier's facilities and other facilities. When suppliers are aware that they're being tracked, they do not take any part in illicit activities to avoid litigation and the loss of business with AmorePacific. AmorePacific was able to remove the possibility of production of counterfeit products, having full transparency within its supply chain. Attacking and eliminating the root cause of the counterfeiting problem allowed AmorePacific to thrive in a competitive market despite the large number of fake cosmetic products plaguing the industry.