There is no end to the information on RFID, but has anyone actually created any value from RFID yet? Many sectors are investigating uniquely numbering individual sales packs – mass serialization – using technologies such as RFID. However, the sector that is perhaps most advanced in this investigation is healthcare.
Many healthcare companies have initiated major research into mass serialization technologies and are conducting large-scale trials. What lessons can the other packaging sectors learn from this activity? A number of the healthcare regulatory authorities such as the FDA and the Department of Health have published reports aimed at reducing dispensing errors and defeating counterfeiters using mass serialization techniques. The FDA advocates a layered approach to counterfeit prevention in which RFID would play an important role. The FDA also details a timetable for the introduction of mass serialization by 2007.
A number of other factors exist in the healthcare sector driving the implementation of RFID. Major retailers are demanding suppliers use RFID – approximately 20 pharmaceutical companies supplying Wal-Mart are to start tagging all bulk containers of Class 2 drugs this year. The Department of Defence has mandated that suppliers use RFID by January 2005. This mandate applies to all products, not just pharmaceuticals. RFID tags will be required on the lowest possible part/case/ pallet packaging and on key high-value items. The problem facing the pharmaceutical companies is how to generate value while complying with the legal and commercial pressures.
These problems are sure to be faced by other sectors in the near future. How is healthcare doing it? Mass serialization can give other benefits besides supply chain control. It is through these other benefits that the healthcare companies hope to create value. Introducing mass serialisation also allows:
- counterfeit prevention – better brand protection
- improved quality control – through traceability
- the possibility of ‘intelligent’ packs
- stock control within the shop – 'stock to shelf' not just warehouse 'stock to dock'
- authentication – packs can be authenticated instantly to check if the product is as intended
- expiry date verification.
Thus significant value can be created by combining mass serialization with security technologies and advanced in store systems.
To understand what value can be created, a major trial is being undertaken by a group of companies together with a representative sample of pharmacists. The trial is being run by PA Consulting and is designed to confirm the possibility of achieving value from mass serialization and to gauge user acceptance. The trial will run in a group of 50 pharmacies, dispensing doctors and hospitals. A number of groups are concerned by the privacy issues raised by RFID. Working with some of these groups the PA trial also seeks to gain insight into best practice. It is believed to be the first trial of its type in the world.
What have we learnt?
Pharmaceuticals are leading the way in the practical implementation of mass serialisation. Other sectors should aim to learn from the practical experience being gained in the pharmaceutical sector.
RFID offers many opportunities to create value. Involvement in similar trials is sure to reap valuable rewards for other companies. What impact will it have on you - and are you ready to get value out of RFID?
This article originally appeared in 'Packaging Magazine' in November 2004, and was written by Paul Earnshaw of PA Consulting Group's Product and Process Engineering Practice.
