Medical Device Link.

Originally Published PMPN April 2005

NEWS

Erik Swain

Are you implementing radio-frequency identification (RFID) because Wal-Mart or another major customer says you have to? If so, you are doing it for the wrong reasons and are missing out on a chance for significant supply-chain efficiencies, two experts said at an Institute of Packaging Professionals (IoPP) conference in March.

Michael Putnam, product marketing manager for Markem Corp. (Newton, MA), said the current practice of having warehouse personnel slap RFID tags on boxes for retailers that require them is inefficient and short-sighted.

"It gets you to compliance, but you have to take the long view, and the details absolutely matter. It requires data integration, which is not easy," said Putnam, speaking at IoPP's Eastern Equipment Seminar in Secaucus, NJ. "But you have to think strategically about how to get return on investment from this."

He said "slap-and-ship" is merely the first of four phases of RFID implementation, and only the final two will bring any benefits to the manufacturers of pharmaceuticals and other products. Slap-and-ship is a problem because it's a process that the warehouse is not designed for, and because it's manual, it creates a bottleneck.

The second stage is scaling the slap-and-ship process up to accommodate higher volumes, he said. That includes tagging multiple stock-keeping units at multiple distribution centers. "That brings some benefits, such as being able to link EPC (Electronic Product Code) data into your customers' systems, but there is no benefit to your overall enterprise."

The third stage, then, is crucial. That, he said, involves moving RFID tagging to packaging lines. "You can put an applicator on your packaging line and apply tags at line speeds, and then verify that they're good. Not only does that eliminate the bottleneck in the distribution center, but you can start to associate EPC with batch and lot information in a more precise way," he said. "That allows full traceability from production to distribution to the customer. But there will be costs to retrofit your packaging lines, and the benefits will mainly be internal."

To get the full range of benefits RFID can bring, companies will need to move to the fourth phase, which is using RFID data with partners. "If you can associate EPC data with the entire manufacturing process and tie it to a batch and lot, and then share that information with your customers, you have an extended track-and-trace system in place," he said. "That means your recalls will be more limited, you will reduce the number of times your product is out of stock, and you can plan manufacturing and shipping based on customer demand. But to make this work, we need common data formats, and there is work to be done with standardization."

Other practical considerations come into play as well, he noted. These include figuring out where on the package is best to place the tag, especially on packages containing metals or liquids, which can be hard to read or cause interference. As of now, he said, the best practice for figuring out what tagging procedures work best is "statistical testing of tag rejects."

Another challenge, said Mark Roberti, founder and editor of RFID Journal (Long Island, NY) is developing RFID systems that can accommodate frequencies anywhere in the world. In the United States, the frequency range for RFID is 902–950 MHz. But in Europe, it is 866–868 MHz, and in Japan, it is 952–960 MHz. "To accommodate today's global manufacturing and shipping, we need to create an antenna that can work at all of these frequencies," he said.

Also, he said, the day will come when RFID tags are not applied like a label, but are integrated into the material of cardboard boxes, or into the ink printed on them. "The benefits to that is that it will cost less than sticking a label on, and that there is less risk that tags will be damaged," he said. "Plus, there would be no delay in packaging line speed."

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