Medical Device Link.

Pharmaceutical and Medical Packaging News Magazine
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Originally Published February 2000

OUR VIEW

Industry Should Force EAS Standardization

Retailers have quickly realized that using electronic article surveillance (EAS) systems provides them with a very effective tool to deter shoplifting. Drug chains have installed EAS systems in their stores, and they have seen a significant decline in shrinkage percentages.

In the early days of EAS, chains soon found out how time-consuming it was for their employees to place the tags onto products manually. It would be more efficient if the tags were applied during manufacturing. This realization was the impetus for what is now called source tagging, the process of product manufacturers placing tags inside packages before they reach retail distribution centers.

At first, only a few retailers asked for source tagging, and most product manufacturers ignored their pleas. However, more and more drugstores have installed systems chainwide. They have placed increasing pressure on manufacturers to source tag their products. Some retailers have gone as far as not allowing new business opportunities for manufacturers who fail to source tag. Others have dropped product lines from manufacturers who do not comply with their EAS programs. Pressure to source tag will only increase as the technology rapidly crosses over into mass merchandisers and grocery chains.

Tim Freeze, IoPP Electronic Surveillance Packaging Committee member and manager of product services and solutions, Mebane Packaging Group of Westvaco

Pharmaceutical and healthcare product manufacturers, many of which had resisted the new technology because of the cost, could no longer ignore the demands of the market. Drug chains are one of their primary retail outlets.

Now that many manufacturers have adopted source tagging and have begun complying with the stores' new policies, manufacturers themselves have run into problems. The biggest is that at least two distinct EAS technologies exist, and they are not compatible.

To accommodate retail stores with different types of systems—or with no EAS system at all—manufacturers are required to keep as many as three separate inventories. This inventory nightmare has created additional resistance to source tagging. Adding to worries are manufacturing concerns regarding high-speed packaging lines, which are not always able to run at full speed when EAS tags must be applied in-line or when changeovers must be made to switch from one type of tag to another.

Trade associations quickly scheduled meetings to allow manufacturers and retailers to air concerns about all issues related to source tagging. A special task force was assembled by the Institute of Packaging Professionals (IoPP) to address industry concerns. The end result of this task force was a "State of Industry Report," which provides guidelines concerning various aspects of source tagging and covers all technologies currently in use. (This report is available through IoPP's bookstore for a nominal cost.)

While the guidelines are intended to ease the transition into source tagging, the problems caused by working with incompatible technologies remain. Industry standards need to be established to make the source-tagging process more consistent. After several years of struggle, no concrete standards have been established, multiple technologies still exist, and retailers continue to place demands on manufacturers. Companies that do not currently source tag continually feel pressured and may lose potential new business opportunities in the near future.

Adding to the difficulty is the fact that any advances in technology, such as implementing one standard system, would involve changing a retailer's point-of-purchase equipment chainwide. Many retailers would be reluctant to change unless a return on investment could rapidly be achieved. Perhaps on the horizon looms a major breakthrough that has not been considered because of the very competitive business cultures within EAS tag manufacturers.

For further information, contact the Institute of Packaging Professionals, 481 Carlisle Dr., Herndon, VA 20170-4823; phone 703/318-8970; fax 703/814-4961; Web site, http://www.packinfo-world.org/iopp/.