Optimising supply chain security

RFID is a powerful tool that the pharmaceutical industry can use to face new supply chain challenges and, more importantly, boost pharma’s ability to solve these critical problems.

The many challenges facing the pharmaceutical industry are the result of today’s complex global environment, and they go well beyond the standard challenge of obtaining approvals for new drugs and getting them to market. Increasingly sophisticated counterfeiting operations and creative re-importers are taking advantage of the wide range of mandated socio-economic price structures. Additionally, shortened expiration dates for many high-cost drugs are driving up expiry-date return costs for manufacturers.

The security and safety of well known, branded drugs used to be taken for granted; not any more. FDA statistics reveal the scope and size of the global issues pharma is dealing with in 2006:

• Counterfeiting is currently estimated at 7–10 per cent of the total market and growing annually.
• Product returns during 2004 for overstock and expiration date issues totalled $2bn.
• Theft and other losses are estimated at more than $40bn annually worldwide.
• Consumer litigations for drug-related deaths and illness are on the rise – a serious consequence of drug counterfeiting.
• Recalls are becoming more common and more costly, with over 1000 reported in the USA during 2004.

Supply chain visibility

Numerous government subsidies and differing state-by-state regulations in the USA have resulted in a supply chain for pharmaceutical products that provides numerous potential points of entry for counterfeit products. A drug supply chain that is not secure will create patient safety issues on top of significant costs to manufacturers and wholesalers working to address criminal activities. It is in the best interest of pharmaceutical manufacturers to look for viable solutions to their supply chain issues now, rather than face continued media criticism for the profits reported by successful companies, contrasted with the growing concerns over the safety of prescription product. 

If a manufacturer is unable to accurately measure the costs of each factor that has an impact on their supply chain, it is very difficult to determine how or where to initiate any corrective action. Properly deployed, RFID solutions can provide accurate, repeatable, time-stamped product-movement data. Business intelligence software can then turn the data into actionable information that meets today’s market pressures.

Supply chain visibility that tracks the location and movement history of pallets, cases and item-level products is an important first step on the path to a more secure drug supply.

RFID is not a one-size-fits-all technology. The term RFID covers a broad range of technologies and radio frequency bands, each with different application-based strengths and limitations. Some RFID frequencies are best suited to manufacturing process improvements and increased productivity. Other RFID frequencies, such as UHF (900 MHZ), are better suited to supply chain tracking, an FDA-recommended element to combating diversion and counterfeiting.

The key for any decision regarding RFID is to first define the processes and business practices that would benefit the company most once it has decided that RFID technology provides the most effective countermeasure. The next step is how best to determine appropriate measurements of improvement.

Support and solutions

As a global supplier of sensing and control products, Omron has delivered RFID solutions to manufacturing customers for over 20 years. The company’s product offering originally provided low-frequency, factory automation systems, and this has now grown into a broad range of radio frequency products and engineered application-specific solutions with global support capabilities.

Omron’s first goal as a supplier is to determine the best RFID solutions to suit the client’s application, then to support and optimise that solution wherever it is being deployed – from the local plant or distribution centre to the other side of the world. Omron’s commitment to client success makes it a technology partner to be considered for any RFID-related project.

Company profile

For more information, visit www.omronrfid.com or call +1 888 303 7343.

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