Magazine Article | March 17, 2009

Web Exclusive! - Track-And-Trace Transforms How Manufacturers Think About The Supply Chain

Source: Field Technologies Magazine
Integrated Solutions, January/February 2009

Pressures to comply with government and private sector regulations have driven RFID (radio frequency identification) adoption among manufacturers. While state- and retailer-generated regulations lack the ability to fully streamline supply chains, many industries are looking to the federal government to set national standards with the ultimate goal of a safe, secure, and efficient global supply chain. As ultimate actions remain inconclusive, manufacturers have turned their attention to deriving business value from RFID implementations integrated with serialization solutions that provide a deeper, more granular, layer of visibility and tracking within the supply chain. Here are two examples of how companies are leveraging RFID and track-and-trace to drive efficiency and strengthen business. 

Ensuring patient safety is a priority for the entire pharmaceutical industry. This means keeping counterfeit product off retail shelves. As part of its overall patient safety program, a global pharmaceutical firm set its sights on the potential security gaps in its own chain of custody.

To make certain every patient taking one of its products always receives the right dosage of the right medicine, the firm decided to take a hard look at how products were flowing through its supply chain. The company chose to focus, initially, on its distribution and warehousing operations — from initial receipt and put-away to packing and shipping. The company decided to start small with its most vulnerable product first, while at the same time, designing a scalable, track-and-trace platform from which to do business in the future.

The firm implemented a semi-automatic strategy in its manufacturing plant, utilizing track-and-trace technology to send information collected by RFID and bar code equipment to its ERP (enterprise resource planning) system in order to generate serial numbers for cases and pallets. In the warehouse, the firm used the same technology to manage handheld bar code and RFID transactions and automate various processes, including aggregation, verification, and decommissioning.

As a result, the company achieved significant improvements in its fulfillment processes. The firm reached its goal of getting orders right the first time, which is important not only for financial reasons, but it helps guarantee that the legal pedigree document is 100% accurate. As serialization processes are adopted throughout the supply chain, the company expects to see further increases in the operational efficiencies.

When Wal-Mart asked its largest suppliers to apply RFID tags at both the pallet and case levels, a major North American food processor saw it as an opportunity to use the technology to improve its current business processes and position itself for the future. The company recognized that the manual slap-and-ship method other suppliers were using to meet the Wal-Mart mandate wouldn't work because so much of its tagging takes place during the manufacturing process. To drive real business value and reduce costs in the supply chain, the firm needed to automate and integrate its supply chain processes.

The company tackled the project in phases, starting with tagging 10-pound product bundles and pallets and 25-pound product pallets only. Within three months of the implementation, the firm was tagging all of the products being shipped to Wal-Mart from the North American facility and the 3PL (third party logistics) warehouse.

With track-and-trace, a link is created between the company's ERP system and the RFID appliances, managing real-time device orchestration at each step of the serialization process. With more than 1,000 automated transactions, the integration supports current industry standards, substantially enhances visibility into the shop floor, and gives the company the ability to respond rapidly to new business requirements.

By driving ROI through RFID, the firm has significantly increased its process automation levels, production efficiency, and real-time visibility into inventory levels. Inventory is now managed down to the specific case level in the ERP system and provides information about the true age of the stored products to business users. The newly automated product movement transactions also offer more accurate information about inventory quantities — enabling precise production scheduling and loading. Plus, with increased visibility into the manufacturing process, the company now has a framework for an improved product recall plan.

These examples of how RFID is being applied in two specific vertical industries are just a small sample of how this technology can deliver measurable business value. As smart, efficient, and agile global supply chains continue to evolve, successful manufacturers will be those that take measures to control risk, maintain brand reputation, and remain focused on driving ROI.