RFID News

Staff -- Purchasing, 1/13/2005

The Food and Drug Administration is pushing the use of RFID (radio frequency identification) technology to improve the safety and efficiency of manufacturing and distribution in the drug industry. In early 2004, the FDA issued a report that recommended the pharmaceutical industry begin using RFID by 2007 in an effort to reduce counterfeit drugs. In November, the agency published a compliance policy guide to help drugmakers implement RFID feasibility studies. FDA also announced that it is creating an internal RFID Workgroup to "monitor adoption of RFID in the pharmaceutical supply chain, proactively identify regulatory issues raised by the use of this new technology, and develop straightforward processes for handling those issues."

The ARC Advisory Group recently conducted an RFID Deployment Best Practices study in which ARC talked to 24 companies that were actively investing in Electronic Product Code Radio Frequency Identification (EPC) RFID. According to Steve Banker, service director for supply chain management at ARC, "the impression conveyed to the public by many pundits is that all Wal-Mart SKUs bound for three of the retailer's Texas Distribution Centers from the top 100 suppliers will be RFID tagged starting January 1. This is incorrect. In fact, there were a set of negotiations between Wal-Mart's top 100 suppliers and the retail company and Wal-Mart has shown more flexibility than many anticipated." ARC says suppliers negotiated a wide range of agreements. For example, one large supplier will be shipping over 700 Stock Keeping Units (SKUs) starting on Jan 1.

German retailer Metro Group began using RFID with 20 suppliers in early November, tagging pallets with "Smart Chips" for tracking from supplier to warehouse. The METRO Group will begin the second phase of the RFID launch as early as next year. At that point, participating industry partners will equip both pallets and transport packaging with RFID Smart Chips to automate supply management processes.