Fighting Counterfeit Parts with Blockchain

Counterfeit parts are a hidden risk lurking in many global supply chains, especially in industries like aerospace, automotive, electronics, and healthcare. A single fake microchip, turbine component, or medical device can compromise safety, destroy brand trust, and trigger costly recalls.

Yet in complex, multi-tiered supply networks, tracing a part’s journey from origin to end use is no small feat. That’s where blockchain is making waves, not just as a buzzword, but as a real solution to traceability and trust.

Why Counterfeit Parts Are So Hard to Catch

Global supply chains often involve hundreds of suppliers, spread across multiple countries and tiers. Documentation is fragmented. Audits are infrequent. And verifying authenticity often depends on paperwork that’s easy to forge.

Some sobering stats:

• The OECD estimates 3.3% of global trade is counterfeit, worth over $500 billion annually.
• In aerospace alone, counterfeit parts have been found in everything from cockpit displays to structural components.
• For critical infrastructure or health equipment, a single fraudulent part can be catastrophic.

How Blockchain Can Help

Blockchain acts as a decentralised, tamper-proof ledger. When applied to supply chains, it records every step a product or part takes, from raw material to finished good, with data that's visible, secure, and verifiable.

Here’s how it works:

1. Each part gets a unique digital ID, linked to manufacturing data, materials used, quality checks, and more.
2. Every transaction (production, shipment, inspection) is logged onto the blockchain by approved parties.
3. Once logged, it can’t be altered, creating a “single source of truth” that all stakeholders can access in real time.

This means suppliers can no longer falsify records, and buyers can verify origin, compliance, and handling history with confidence.

Real-World Use Cases

1. Aerospace & Defence Companies like Honeywell are using blockchain to track aircraft parts, ensuring only certified components enter their supply chains. In one pilot, Honeywell listed over 25 million parts on a blockchain-based marketplace, enabling real-time verification by airlines and repair shops.

2. Automotive German automaker BMW has tested blockchain to track ethically sourced cobalt for EV batteries, preventing both counterfeit materials and unethical labour practices.

3. Pharma & MedTech Pharmaceutical firms are adopting blockchain to meet regulations like the EU Falsified Medicines Directive, helping to track packaging and serial numbers through the entire supply chain.

Why It Matters Now

With the rise of regulatory pressure, geopolitical instability, and supplier fraud, traceability is no longer a “nice to have.” It’s a necessity. And while blockchain won’t eliminate all risks, it adds a powerful layer of accountability.

Here’s what businesses stand to gain:

• Reduced risk of recalls and liability
• Faster supplier verification and audits
• Improved customer trust and product safety
• Stronger compliance with ESG and trade regulations

What to Consider Before Adoption

Blockchain isn’t plug-and-play. It requires:

• Clean, structured data at every supply chain tier
• Supplier onboarding and collaboration
• Integration with existing ERP, logistics, or compliance systems
• Governance: deciding who can read/write data

But platforms are emerging that simplify adoption, especially when paired with technologies like IoT, digital twins, or QR/NFC tagging.

Final Thoughts

Blockchain may have started in cryptocurrency, but its future in supply chain risk management is becoming clearer every day. By enabling secure, end-to-end traceability, it offers a credible solution to one of the sector’s biggest threats: counterfeit parts.

At SupplyCheck, we’re helping businesses future-proof their sourcing through smart, transparent, and ethical procurement. And technologies like blockchain are key tools in that mission.

Want to explore supply chain traceability solutions for your business? Contact us to learn more.