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After trial and error, drug maker deploys RFID

Purdue Pharma, among the earliest SAP adopters of RFID, is tracking its most sensitive drugs with the technology. SAP plans to launch industry specific software to deal with RFID deployment and data integration challenges.

CHICAGO – Drug companies are used to trial and error, but Stamford, Conn.-based Purdue Pharma, took the whole notion of trial and error to another level when it began experimenting with radio frequency identification (RFID) in 2003.

We did a lot of experimenting with packaging and processes before we got it down.
Chuck Nardi,
 chief information officerPurdue Pharma

Purdue, which manufactures the commonly stolen and counterfeited drug OxyContin, is among the earliest SAP RFID adopters. It began a pilot project to tag bottles of the drug that would be shipped to Wal-Mart.

"We didn't know who to go to for help in the beginning," said Chuck Nardi, Purdue's chief information officer, who leads the RFID project team. "We did a lot of experimenting with packaging and processes before we got it down."

Nardi and Mike Celentano, associate director of supply chain and RFID systems at Purdue, discussed their project during a presentation to several hundred attendees at RFID Journal Live last week in Chicago. SAP, which hosted a session on its RFID initiatives, plans to roll out industry-specific software to address the use of sensor-based technologies like RFID.

When a company deploys RFID, it is not only implementing a new technology, it is changing entire business processes, Nardi said. It took several different packages and labels before the company overcame the physical challenges of sticking the tiny RFID chip to each bottle.

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Purdue eventually figured out a way to place the tiny RFID chip under each pill bottle label and worked with a tag supplier to bundle the chip labels on a roll. But the process was demanding and it took months of experimenting before the company determined how to mechanically stick the labels on each pill bottle and how many bottles of the drug could be boxed together, and still get good results from RFID tag readers.

Nardi said the technology is helping the firm keep a grip on its drug supply and reduce stolen shipments. The company deployed RFID in its New Jersey and North Carolina facilities and also started tagging Paladone, a second highly stolen and counterfeited drug it manufactures.

"We learned that it takes a lot of changes and disruptions before you get it down right," Nardi said. "Once you get it down, the benefits can be substantial."

More companies like Purdue need to realize RFID is the foundation to an adaptive supply chain that can result in the ability to respond to disruptions as they occur, according to Amar Singh, vice president of global RFID and business development at SAP.

"When you deal with product tracking in a pharmaceutical environment, you have to deal with integration across not only multiple systems within one enterprise, but you have to integrate multiple systems across multiple enterprises, Singh said.

While companies like Purdue must deal with the plethora of physical problems associated with deploying RFID, they also face challenges when integrating the data and working with multiple partners to collect data. To help alleviate those problems, SAP plans to launch a software package to RFID deployment and sensor data integration issues in specific industries, Singh said.

The technology alone is only a building block that could be used with other sensor-based systems to get a better view of products and supplies passing through the supply chain. The key is linking the data collected by an RFID tag and other sensor readers to the appropriate tools and applications for analysis, Singh said.

"RFID is one of those sensing mechanisms that can allow you to sense what's happening in real time, but sensing isn't enough," Singh said. "Having the ability to analyze and respond to the information coming in is the right way to use the technology."

For Purdue, the use of NetWeaver and SAP's exchange infrastructure (SAP XI) could help it integrate data from the multiple systems used by its partners.

"There are multiple industries using this technology in very different ways and we plan to address this," Singh said. "We'll identify specific business processes for specific industries."

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