Recognizing Real RFID Adoption Potential

Three critical questions to answer before embarking on a radio frequency identification initiative


e-Pedigree benefits extend beyond the critical area of patient safety into an array of strategic and economic benefits. Several comprehensive business cases from both within the pharmaceutical industry and from independent research companies have concluded that pharma supply chain partners (manufacturers, wholesalers and the retail pharmacy chains) will realize a positive return on investment. The ratio of RFID tag cost to average pharma product margin truly differentiates pharma's return on investment from other industries, likeconsumer goods.

Answer 2. Physics challenges are being understood and overcome

Some practical answers have resulted from the extensive RFID piloting done in this industry. Small size of tagging surfaces at the item level and products that contain metals and liquids are some of the physics hurdles that have been overcome. Currently, pilots are testing high frequency (HF) RFID tags as a technical solution to many of the physics challenges. Bar codes will be used in parallel at the item level, providing a means for back-up data collection.

Answer 3. The pharmaceutical supply chain is building new collaboration

e-Pedigree has become a catalyst to bring a new level of collaboration to the pharmaceutical industry supply chain. This collaboration is based on each player recognizing that the sum total of collaborating effectively is better than the individual pieces. Many of the quantifiable benefits in pharma business cases depend on new levels of collaboration around data. The key to collaboration in the pharma supply chain is that all partners obtain value. Ultimately, expect the pharma manufacturer to own the data because they will gain the most from the transformational effects of real-time supply chain visibility as it extends out to patients in the future.

What Does This Mean for Me?

Up front, recognize that there is a barrage of biased RFID hype that is being pushed in your direction. Don't be fooled into believing the "ubiquitous" RFID story. Understand that you don't really need to immediately jump on the RFID bandwagon before it's too late. Ultimately RFID will have an impact only in focused applications that solve a problem in a unique way and that are value driven. A good way to quickly evaluate your RFID opportunity is to answer the three questions discussed in this article. The pharmaceutical industry is moving rapidly towards RFID adoption. For pharma, there is a real RFID value proposition, physics challenges that have been overcome, and a new collaboration process that is working across the supply chain.

About the Author: Robert Goodman is the founder of Get It Done Consulting, a consulting firm providing RFID and supply chain services. He can be reached at rgoodman@getitdoneconsulting.com or 617-852-3805.

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