generating operational efficiencies from item level rfid

Generating Operational Efficiencies from Item Level RFID

Case Orion Pharma: Item level authentication through the supply chain

Kirsi ViskariManager, Intelligent SolutionsNew Business InnovationsStora Enso

Stora Enso in Brief

• A world leader– 16.9 million tonnes of paper and board – 7.7 million m3 of sawn and processed wood products

• Four main divisions – Stora Enso Publication Paper, Stora Enso Fine Paper,

Stora Enso Packaging Boards and Stora Enso Forest Products

• Sales EUR 13.2 billion • Approximately 46 000 employees in more than 40

countries• Market capitalisation EUR 9.3 billion (31 Dec 2005)• Shares listed on Helsinki, Stockholm and New York

stock exchanges

Orion Oyj Orion Pharma

Orion Pharma in Brief

• Turnover 550 M€, personnel 2700

• Businesses:– Proprietary Products

• Stalevo®, Comtess®/Comtan®

– Specialty Products • broad portfolio of mainly generics,

OTC, including CMO

– Animal Health– Fermion (active pharmaceutical

ingredients)

• 300 products marketed in over 100 countries, over 4000 SKUs

• Own marketing territory covering Finland, Scandinavia, Germany, UK, the Baltic states and eastern EU

• 10% market share in Finland

A North European, R&D-intensive, business-driven pharmaceuticals company with strong emphasis on developing innovative treatments for global markets

• Strategy emphasises profitable growth and balanced management of risks

• R&D emphasis on discovery and early development, about 17 % of turnover

– core areas CNS, cardiovascular and hormonal therapies

– 7 molecules launched from own pipeline since 1980’

• Partnerships and networking are important in R&D and access to global markets

Five Key Business Drivers for Brand Protection Solutions

• Consumer safety

• Consumer safety• Brand Protection


• Consumer safety• Brand Protection• Loss of revenues


Losses through counterfeitingand piracy

€ 3.8 billionSoftware

€ 0.5 billionWines & Spirits

€ 8.2 billionTobacco

€12.6 billionPharmaceuticals

€ 7.5 billionClothing & Footwear

Annual LossesSector

Source: www.4ipr.info

• Consumer safety• Brand Protection• Loss of revenues• Regulatory compliance


• Consumer safety• Brand Protection• Loss of revenues• Regulatory compliance • Overall supply chain efficiency


PackAgent Solution

• Product Authentication• Tracking history• Auto-ID technologies• Standard hardware• Parent-child management

Item level trackingExample

08:32:21 08:57:32 09:02:32

Transparent relations handling allows unique item level pedigree stamps to be created and updated automatically when pallet or container is read and identified in the logistics chain.

Tracking history

08:32:21 Container 153

08:57:32 Pallet 8458AK6

09:02:32 Manufacturer

10:32:12 Wholesaler 1

12:52:09 Warehoouse 57

13:23:54 Retailer 746532

Item level trackingExample

12:52:09

Transparent relations handling allows unique item level pedigree stamps to be created and updated automatically when pallet or container is read and identified in the logistics chain.

Versatile and scalable solution

Anti-counterfeit measure covering the whole supply chain- vs. holograms, special inks or physical tamper evidence tool

Supply chain visibility - Flexible information exchange- Real time data

Easy product authentication for point of sale and consumers

Combining different marking technologies

Building the relevant supply chain


PackAgent Pilot with Orion Pharma


Case: PackAgent Securing Orion Pharma’s Prescription Drug

• Whole supply chain (pharmaceutical brand owner, converter/printer, distributor/wholesaler, 7 pharmacies)

• Item level RFID and shipping case level RFID and barcode• One prescription drug, Marevan• Duration from Nov 2005 to April 2006


Pilot supply chain overview

One Packaging Converter

Jaakkoo-Taara, Turku

One Pharmaceutical Manufacturer

Orion Pharma, Espoo

Seven Pharmacies

University Pharmacy Helsinki, Turku, Tampere, Tallinn Pansana, Tallinn €lejoe, Pärnu

Two Wholesalers

Oriola, EspooAS Oriola, Tallinn


• RFID technology, HF & UHF• Product authentication• Item-level tracking and identification (pedigree)• Automated recall• Supply chain collaboration • and data sharing

Pilot Scope

Solution Provided by Stora EnsoBusiness partner Bearing Point


Complete pedigree on individual Marevan package


Recall notification on individual Marevan package at Point of Sale


HF at item level

• All tags endured automated packaging line • UPM Raflatac 18 x 36 mm 13,56MHz HF tag

performance was excellent in the pilot• Wholesale pack (10 items) can be read both at

the end of production line and pharmacy inbound at once in few seconds

• Global standard, cheap readers• Ideal for point-of-sale read • Less chance for unintentional read event due

to close proximity requirement • Recommendation to use HF at item level

justified


UHF on transport box level

• UHF suitable for transport box or pallet level tracking– Clear benefits in logistics with gate reader at warehouse

• Parent-child relationship management enabled item-level timestamps

• Relatively fast and easy implementation at both Orion and Oriola with good results and improved processes

• Separate UHF tests were conducted by Orion and Oriola to test UHF functionality

– 100% read accuracy with non-blister packs attainable– Blister packs challenging even if UHF tag placed on transport box with no surface to the blister material


Barcodes on transport box level

• Linear barcodes used in parallel with UHF tags

– Contained same box ID

• Not all parties involved had RFID readers

• Wireless barcode readers found functional in warehouse picking


• Positive consumer feedback, no claims or negative feedback• Good feedback and development ideas from all participating

parties• Successful integration with Orion’s SAP based supply chain

management system• Whole supply chain integration in less than 3 weeks• Seamless usage of 3 different Auto-ID technologies in

parallel: HF RFID, UHF RFID and barcode• Results in general were better than expected and the

maturity of technology was on positive side compared to expectations

Pilot highlights


• Unit level information management enables accurate and real-time supply chain management

– real-time POS data– lead-time follow-up– better forecasting and planning– exception management e.g. recalls –etc.

• RFID used in warehouse logistics can alone increase efficiency substantially

Manufacturer Feedback Orion Pharma


Wholesaler Feedback Oriola

• Usage of new technologies makes it easier and quicker to manage the workload associated with decreasing order sizes and increased transactions

– Increased effectiveness

• Network type of solution – Decreases the need of costly point-to-point systems

integration– Also smaller companies can be involved.


Retailer FeedbackUniversity Pharmacy

• Change from bar codes to RFID label could be bigger than the change from ordinary price tags to bar codes enabling changes in

– cashing process, – logistics, – drug safety – and targeted customer services

Jussi Kalsta, Customer Service Manager, University Pharmacy, Helsinki, Finland

• Label reading not causing extra work • In order to get the most out of the

RFID labelling, the label should be included in all boxes, not just boxes from single producer


Consumer Feedback

• 66% had a positive opinion of the pilot, 37% were neutral

– No one had negative opinion

• Only 17% of consumers had any questions– Most questions were related to whether the package is

followed after the POS

• No one refused to take the tagged package

”This is advanced technology, wow!””It is good that companies invest in security”


• 2 % of tags were dead and were rejected during tag writing process

• Calibration of readers important

• Operational environment can create challenges– Metal tables, WLAN coverage etc

• New or changed processes require clear routines– IT service routines, thorough training etc

• RFID hardware development cause incompatibility– Delayed or unexpected reader internal software updates

Lessons Learned


What is important for the future ?

• Integration options and scenarios should be finalised and agreed – identify the best process based on your Business Drivers

• RFID and IT are just tools – they have to be integrated to the business processes

• Process Change is what really delivers the benefits