All businesses have trade secrets; information that they would rather keep confidential that is valuable to a company’s growth and competitive advantage. This could include technical information (formulas, designs, tools, manufacturing processes, and computer source codes) as well as business secrets (customer and employee lists, financial and accounting data, and product and marketing plans). Such information can be critical to the success of a business; however, many companies do little to protect it.
Many changes in the business community have made protecting intellectual property (IP) more challenging. Today’s business environment is extremely dynamic and increasingly competitive on a global level. For manufacturers, this new globalized economy requires managing extended supply chains in which outside partners and suppliers perform critical functions, from product design and manufacturing to product support, from various locations throughout the world.
In order to remain competitive, manufacturers are also increasingly turning to outsourcing and off-shoring, making protecting design data even more problematic and it more essential for them to have a well established strategy for managing supply chain risk. In addition, rapid technology changes and today’s increasingly mobile workforce both add to the complexities of IP protection. The risk of having IP stolen or in some way compromised is among the greatest risk that manufacturers face today.
IP theft can result in counterfeited versions of a company’s products being designed, manufactured and sold on the black market. Whether it’s actually outright theft of IP or possibly an unintentional “leakage” of valuable information by an employee or supply chain partner, it carries a hefty cost. The World Customs Organization estimates that IP theft impact on the global economy accounts for $500-$600 billion in lost sales each year, or 5-7% of world trade. The FBI estimates that in the U.S. alone, counterfeiting and piracy accounts for over $200 billion is lost sales each year.
IP Protection in Product Development
Because of all the complexities mentioned above, IP contained in products and product designs is increasingly at risk. In order to enable truly collaborative design, companies are opening themselves up to heightened risk of IP theft. Implementing the organizational structures, business processes, and technologies that support “IP friendly” collaboration are essential to protect design IP. Companies must also document IP, establish legal protection, and safeguard product data by enhancing IP security and digital rights management.
One way in which manufacturers are combating the risks of IP theft is through the implementation of product lifecycle management (PLM) software. PLM systems enable companies to create a central repository, or vault, in which data from multiple systems across an extended global supply chain, is safely kept. The PLM platform becomes the mechanism by which product data is shared among the extended design team members.
The PLM system can determine whether a person is authorized to access the data they are attempting to access, in essence protecting IP while also streamlining the product development process. With this type of system in place, all requests for product data—regardless of where it originates within the company or supply chain—are managed by this single system. Multinational project teams can then collaborate effectively while obeying any relevant export control regulations, commercial IP laws, and security protocols of all countries involved.
While IP theft is still a huge concern for global manufacturers, it’s a risk they can mitigate with proper diligence from an organizational and technology standpoint. With the right processes and systems in place, manufacturers can safely compete in the global market while also protecting their most valuable assets.
Image by zebble