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Article
RFID: Finding ROI in X-treme Supply Chain Management

The recent RFID Journal Live conference had an interesting new attendee profile: members of the legal community, anxious to learn what was new and valuable in the world of RFID and other auto-identification technologies, specifically as an enabler for "risk avoidance" and corporate accountability.


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In addition to the ‘usual suspects’ that filled the presentation and exhibit halls, the recent RFID Journal Live conference, held in Las Vegas, NV had an interesting new attendee profile. I found myself meeting members of the legal community, anxious to learn what was new and valuable in the world of RFID.

No doubt legislation related to ‘global anti-terrorism’, fiscal governance and other potential ‘risky business’ has stirred the waters of what used to be considered a ‘back room’ function. Whatever the reason, there is a new interest in the use and promise of RFID and other auto-identification technologies, specifically as an enabler for ‘risk avoidance’ and corporate accountability.

Intrigued, I engaged in conversations with members of the legal community, initially assuming that their primary interest might relate to the much publicized issue of ‘privacy’, personal space etc. Interestingly enough I found that many of them were dipping more than a toe into the murky waters of global logistics, transportation and the technical intricacies of global trade and compliance.  A further, but not unexpected, twist was the fact that many of them were developing practice areas, specifically focused on the use of RFID and other technologies to gather and share data in this information intensive area.

Another interesting twist to the hallway and other discussions taking place was the fact that the focus of the conversation appears to have now progressed from one related to tags and readers. Pilots have been performed, companies are now looking beyond the noise of ‘what is hot and what is not’ and getting down to the nitty gritty of ‘what to do with this new data source?’.

Although there was no single answer – in fact the business uses and pilot implementations covered a plethora of vertical and functional issues – I started to see the shadow of a theme. The true value of real time information, as well as the digital data trail enabled through RFID and other transaction independent data sources, was relative to the risk inherent in the supply chain model.

In the case of the pharmaceutical industry, there are compelling business drivers. Product protection is critical in an environment when tampering, dilution or other degradation could result in the loss of more than just profits – there are lives at stake! And in the case of the even more X-treme cold chain, a true representation of every step of the journey across the chain of chains that creates a profile of the state of the item can mean the difference between a life saving substance and an inert and useless compound, what to say of multi-million dollar losses on shipments, multi-million dollar law suites for error induced disease and death, etc.

Aha! Perhaps this ties in with the representation from the legal community!

Another clue was the increasing focus from both end-user presenters and solution providers on the healthcare and life sciences industry. No doubt the increased support, and strong endorsement, from the FDA on the use of RFID in the war against counterfeit and diverted drugs has turned the spot light on technology solutions. The term ‘e-pedigree’ seemed to buzz through the air; every RFID and other auto-ID solution provider seemed to have these words emblazoned on their booth.

Whatever the business driver, the bottom line message was the same. If there is risk, there is a need for a digital data trail. And what better way to enable this than through the combination of RFID, existing data capture tools, current software investments, the ubiquity of wired and wireless networks?

Risk Management becomes a key when we have deep distribution channels, entrust manufacturers to build our products that we have patents, on, etc. Legal issues and management of the X-treme Supply Chain that now have RFID as a central core may be:

  • Intellectual Property Protection
  • Anti-Counterfeiting
  • Supply chain Tracking and security
  • Financial controls and custody
  • Reduction in human errors.

And in healthcare the added benefits of:

  • Product quality
    • (cold chain)
    • Asset and inventory management
    • Proper disposal
  • Over all improved chain performance
  • Digital audit trail-pedigree

Like all enablers, however, the solution takes more than the will to succeed. What is needed is an understanding of the gaps and follies in the status quo – and then the enablers and roadmap to achieving the desired vision.

This simple exercise is similar to planning a trip through rough terrain – like mountain climbing, white water rafting or discovering new territories. And when in doubt, sometimes it is worth engaging the services of a ‘guide’ – fortune does not always ‘favor the brave’!

The following is a suggested use of the 3Pe™ approach to take the first steps on this journey.

Policy

  • What are the current issues? Internal? External?
  • Are there ‘rules and regulations’ that need to be considered and applied?
  • Are there consequences for non-compliance – tangible and intangible?
  • What has changed to create new levels of complexity?
    • Geographic?
    • Political?
    • Financial?
    • Legal?

Process

  • Determine the step by step process within the ‘holistic’ supply chain model
  • At each of the ‘links’ in the chain, evaluate potential areas of risk and constraint
  • Consider the players – all of them – including those that ‘stand in the wings’ – for example compliance and regulatory bodies

Performance

  • What are the key metrics and how well is each player meeting their objectives?
  • Have expectations been well communicated across the supply network – and formalized into service level agreements?
  • What is the impact of non-compliance or poor performance? – as the expression goes, the chain is only as strong as the weakest link!

Enablers

  • And finally, what technology enablers are in place? Planned? Required?

Each journey begins with a single step – start yours now. The learning process to move from myth to realty in RFID is truly important. The costs and risks are nil.  Missteps later—well, you won’t want to have to call a lawyer!




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