Factory overrun
Factory Overrun refers to production surpluses in the industrial production of goods and merchandise. Usually, these surpluses occur in phases of production start and end. Controlled and monitored, the resulting products are destroyed. Black market articles are thus created in an uncontrolled manner.
A factory overrun can also occur during production breaks or after work hours (so-called "fourth shift"). The quantity of goods specified in the production orders is deliberately exceeded. Unnoticed or possibly even tolerated, criminal organizations within the company thus produce black market goods. As a result, they cannot be distinguished from the original products by matching them. Thus, these goods remain under the radar of customs authorities and often sneak through the entire distribution channel to the end customer.
Another form of factory overrun are so-called parallel factories: here, in an identically constructed production site, often not far from the original location, copied products are created under quasi-identical conditions, often even using the same distribution channels.
In all the cases described, the goods are sold with significant price reductions, while the brand owner's prices and revenues come under pressure.
Producers who use counterfeit-proof serialization within their production and supply chain always keep these processes in view, because unique and secure serial codes can uniquely identify each product. Only the brand owner is able to generate the serial codes and pass them on to his supplier. Only exactly as many codes are released as there are goods planned for production. In direct alignment with an enterprise resource planning system, production surpluses of any origin are prevented from finding their way into the economic cycle. It is irrelevant where production takes place. In the end-to-end process, the end customer can then check the product for authenticity via the Internet. At the same time, the importance of quality and high value is emphasized and offers the unique opportunity to take customer relations to the next level with marketing measures.
In this way, serialization can also be used very well to control license production. If the licensor provides the licensee with the serial codes, this is also the basis for the license calculation. This means that for products that carry a serial number, the license has been duly paid.