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Pharmaceutical Example

Pharmaceutical Example

In the second scenario a manufacturer of a pharmaceutical product ships five pallet loads to a national distribution center where the goods are cross-docked and re-routed for delivery to five regional distribution centers. The manufacturer uses a 3rd party delivery service to transport the product to the national distribution center and the distributor uses its own transportation means to ship the products to its regional distribution center. The delivery is complete when the products have been received at the five regional centers. The empty pallets are returned to the national distribution center by reverse logistics. The average duration of the journey of each pallet is +/- 22 days and the average distance traveled is 1,802 miles.

The products are packaged for pharmacy dispensaries in 250 ML pill bottles containing 200 pills. Each bottle includes an NFC RFID tag providing content data. Twelve bottles are packaged in a carton. Each carton includes an EPC RFID tag containing serialization information for its contents of 2400 pills. 48 cartons, carrying 115,200 pills are loaded onto each pallet. Each pill has a retail value of $6.00. The five pallet loads with 576,000 pills are worth $3.5 million all together. The shipping manager configures each pallet for the first leg of the journey to the national distribution center and again for the second leg of the journey to the regional distribution centers.

The pallet EPC SSCC tag is enabled so that the manufacturer can aggregated and store the individual EPC RFID tag data identifying the serial numbers of the 48 cartons loaded on each pallet. (The pills themselves may block the individual tags on the cartons in the middle of the pallet load, and so the EPC SSCC tag insures a more accurate reading is guaranteed.) The EPC RFID tag is configured to report its manifest data when the pallet load leaves the manufacturer’s plant to provide an advanced shipping notification (ASN) to the national distribution center. The EPC SSCC tag is read to document delivery of the pallet loads when it arrives and to send an ASN to the regional distribution centers, where the EPC SSCC tags are read to automate the receipt and handling of each pallet load. The cost to use the pallet EPC SSCC options are $0.85 for each time the EPC SSCC data is modified during each leg of the journey. As there are three required memory transactions, the total cost for the intended delivery is $12.75 for the EPC SSCC option.

The value of the pharmaceutical products shipped on the five pallets is worth $3.5 million. The risk of theft and counterfeiting is high. The pallet UHF Reader/Writer is enabled for the rental trip. The UHF Reader/Writer is configured to automatically read the individual EPC RFID tags on each carton several times during their journey. The reader is configured to conduct an on-demand inventory when certain sensed conditions exist or on a schedule. For example, if the truck stops, the reader is configured to update the manifest when the pallet senses a condition or is on the move again. This allows losses to be identified and pin pointed in real time. Ten readings by the UHF Reader/Writer are anticipated for the pallet rental trip. Each reading costs $0.65. The cost to read the EPC RFID tags on the cartons to preserve an accurate e-manifest is $32.50.

The IEEE 802 WiFi(RTLS) and Bluetooth options are also enabled. The WiFi and Bluetooth options are enabled to permit seamless cross-docking and other automation at and between the national and regional distribution centers. For example, when the EPC SSCC tag on each pallet is read at the dock door, the LAN at the distribution center accepts an electronic handoff and takes over management of the pallet. The LAN host computer system communicates with a fork lift which instructs the fork lift operator on a display where the pallet is to be stored, staged or shipped. The cost to enable the WiFi and Bluetooth options cost $0.18 and $0.07 respectively and are expected to be used 4 or 5 times each, costing $6.90 for the rental of five pallets.

In order to provide a means to report the theft or a risk observed by the UHF Reader/Writer or one or more of the sensors on the pallets, the GSM Cellular option is enabled. The cellular option provides 24/7 visibility nationwide and is configured to report a real or potential threat electronically to the manufacturer’s computer system or the shipping manager’s smartphone or PC. During the summer months, the temperature sensor in each pallet is enabled to document temperature conditions. (The pharma products have sensitivity to higher temperatures.) The pallet is configured to set a Geofence of 35 miles from an intended road map between each leg of the journey. If a bridge is washed out and a diversion outside the geofence occurs the receiving party can be notified of a possible delay. The GSM cellular option is configured to aggregate data and report for five pallets 8 times during the intended trip. The cost to collect, aggregate and report the data from the enabled RFID options and the on-boards sensors using the GSM Cellular option is $74.75.

The total costs for electronic surveillance and e-manifesting is $125.90, which works out to $25.18 per pallet. These extra costs amount to $0.00022 per pill. The insurance provided by this additional cost is realized when the LTL pallet load is compromised by organized crime. Removal of one or more cartons from the pallet could cost tens of thousands of dollars in potential losses as well as risk to safety of patients who unwittingly consume counterfeit pills replaced on the pallet load. The GSM cellular option can be configured to send a report of a sensed problem in real time, while the activity is occurring, leading to a more likely prompt apprehension of the crooks.

Pharmaceuticals Example

Category Disable Enable Fee Freq. Miles Trip Duration/Hrs   Cost
RFID Options
(ISO 18000)
          e-pedigree – 22 days    
EPC GRAI   5 free   1802 528    
EPC SSCC   5 0.85 3 1802 528   12.75
NFC   5 free   1802 528    
DASH 5   1.15   1802 528    
UHF Reader/Writer   5 0.65 10 1802 528   32.5
RFID Options (IEEE 802.n)                
WiFi (RTLS)   5 0.18 5 1802 528   4.5
Bluetooth   5 0.07 4 1802 528   1.4
Zigbee 5   0.04   1802 528   0
Cellular Options                
GSM   5 1.25 8 1802 528   50
CDMA 5   1   1802 528   0
Temperature   5 0.05 60 1802 528   15
Geofence   5 0.65 3 1802 528   9.75
CO2 5   0.04   1802 528    
Impact 5   0.03   1802 528    
Etc…. 5       1802 528    
Pallet rental fee:               $25.18
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