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Department of Logistics
University of Dortmund
These days, it is nearly impossible to open a professional journal from the fields of logistics, economics or production technology and not come across the topic of radiofrequency identification (RFID) technology. These articles invariably invoke the allegedly enormous advantages of RFID, and one is often under the impression of standing on the brink of a revolution in information technology. However, when the critical observer takes the time to look behind the façade of euphoric media coverage, major marketing campaigns and convincing promises of system performance, a different, more sober picture emerges. This article evaluates RFID technology from the critical perspective of a logistician in the pharmaceutical industry.
RFID describes a technology that allows for communication between a transponder (tag) and a read/write unit (RW unit) with magnetic or electromagnetic waves. The basic intention of RFID is to attach a transponder to movable goods and read and modify data at any point in the supply chain. There are two types of RFID technology, with the following distinguishing characteristics.
For systems in the low-frequency (LF; 125kHz) and high-frequency (HF; 13.56MHz) ranges, a magnetic field is created by an antenna attached to the RW unit. As soon as a transponder reaches the magnetic field, electricity is introduced into its antenna, thus allowing the transponder chip to communicate with the RW unit. Although in this case there is technically no transmission of radiofrequency (but rather transmission via magnetic fields), the term RFID has nonetheless been adopted for such systems. Systems operating in the LF and HF ranges tend to operate passively – that is, the energy needed to operate the transponder chip is taken from the antenna of the RW unit. The maximum effective RW distance is therefore limited to 1.5m, depending on the size of the antenna of the RW unit and the transponder. Such systems rely on the principle referred to as “inductive coupling”.
For systems in the ultrahigh frequency (UHF; 868MHz) and short high-frequency (SHF; 2.45GHz) ranges, the antenna of the RW unit emits radio waves, which are received and modulated by the transponder. RFID technology in the UHF and SHF ranges is available as an active or passive system. In passive systems, the transponder receives the energy for operation from the antenna of the RW unit and can achieve a transmission range of up to 6m (with 4W in the USA). Active transponders contain a battery used for the operation of the transponder, including, with some systems, the sending of the response signal. The read distance on active systems can reach up to 100m; additionally, a much higher volume of data can be stored on the transponder chips compared with passive systems. The functional principle of such active systems is also referred to as “backscatter coupling”.
In addition to the different functional principles, varied methods of energy supply and multiple RW distances, there are further distinguishing characteristics of the passive and active systems. For example, the higher the frequency, the higher the speed of transmission between the RW unit and the transponder. However, with higher frequency comes greater systematic sensitivity to metal and water.
Advantages and disadvantages
Compared with other identification systems, RFID systems have the following advantages:
However, this technology involves several systematically inherent and fundamental disadvantages:
In recent years, various RFID systems have come on the market with functions above and beyond the typical data transmission abilities:
The legend of RFID
RFID technology is far from brand new. Active transponder systems were used as early as the Second World War for airplane identification. RFID technology has been used regularly since the 1970s and 1980s, particularly in the areas of animal identification, production control and inventory management.
There are several different reasons for the substantial current interest in RFID technology by nearly all branches of industry:
Nonetheless, sales of RFID products remain quite sluggish because:
For these reasons, various major producers, suppliers and potential users of RFID technology have attempted to stimulate the demand for RFID products and escape the “chicken–egg problem” (potential RFID technology users seek lower system costs, particularly for transponders, in order to implement on a large scale; producers, on the other hand, argue that only higher demand can reduce costs). They have used the following strategies:
This led to:
RFID in the pharmaceutical industry
Nonetheless, more and more pharmaceutical companies are showing a guarded interest in the application of RFID technology.
Improving the supply chain
By equipping products, pallets or loading units with transponders, businesses can speed up the processes of product identification and confirming that shipment has been completed, at the same time eliminating the need for opening the packaging for visual confirmation.
Efficient control of the fulfilment process
Errors in the fulfilment process in wholesale, hospitals or pharmacies often have serious consequences for patients. Products equipped with a transponder could be automatically tracked during the distribution and fulfillment process, leading to easy and quick inventory control and ensuring that pharmaceutical prescriptions are dispensed correctly.
Detecting and combating counterfeit pharmaceutical products
In its report Combating Counterfeit Drugs in February 2004, the FDA determined that a growing number of counterfeit pharmaceutical products were appearing on international markets. A primary reason for this is the often fragmented and multilayered logistics process.
The FDA views RFID technology as one of several possibilities – with the use of the unique and counterfeit-safe transponder number – with strong potential for securing the supply chain. However, the FDA does not currently view RFID as ready for widespread commercial use.
Tracking producers and batch numbers
With the help of the unique transponder number and an international database, date and location of production could easily be traced with RFID technology.
Additionally, one could determine where other products from the same batch were shipped, making targeted recalls more efficient. The production data could also be stored on the chip in such a way as to be easily read by recipients via their RW unit.
Using RFID technology, each step of the distribution process of pharmaceutical products could be recorded and monitored, thus making product theft easy to trace. If all outgoing shipments from a warehouse were equipped with RFID antennas, any diversion of product would be recorded and reported.
Cold chain monitoring
Transponders equipped with temperature sensors and batteries to allow for continual temperature measurement could be employed to monitor the cold chain during shipment. Compared with traditional data loggers, RFID transponders have several advantages. First, with a relatively low price of €8 each, they are cheaper. Additionally, one can read several transponders simultaneously, and through many materials (no loss of cold due to opening of containers). Reading the temperature of the transponder via radiotransmission allows for close temperature monitoring throughout the shipping process, rather than only at its final destination. For example, if a shipment exceeds the mandated shipping temperature during transit to the airport, this can be noted before loading the shipment into the airplane. Transport can be stopped and, this way, time and money related to further transportation and return transport can be saved.
Despite this promising potential, there are many obstacles to comprehensive use of RFID technology, particularly as an “across the board” solution:
Yet many experts still believe that the pharmaceutical industry will be a trailblazer with regards to the introduction of RFID technology to transport and logistics. They cite the following reasons:
Many pharmaceutical firms have recognised the potential of RFID technology and have begun to explore its use. This interest is reflected by the many pilot projects being conducted by firms in cooperation with third-party system integration companies and universities.
As technological advances are made, it is likely that state regulation agencies will turn to RFID technology as a medium for the implementation of new regulations and standards. One needs only look to the many state-funded research projects focused on cold chain monitoring via RFID. However, anyone interested in RFID implementation must be aware of the potential risks and difficulties contained in such a project. In any case, one must consult with a neutral expert on the subject and maintain the necessary critical distance throughout every phase of the project.