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RFID Tests Are Positive For CVS And Pharmaceuticals

The retailer, along with eight others, wraps up the first phase of an industrywide RFID test.

Elena Malykhina

September 30, 2004

3 Min Read

CVS Corp. continues to test radio-frequency identification technology both in its internal operations and with a group of drug suppliers, distributors, and retailers--initiatives that the national drugstore chain says are paying off with promising results.

The retailer is one of nine participating in a pilot designed to establish an RFID operating and adoption model for the drug industry. The pilot is part of Project Jumpstart, an industry effort to fight counterfeit drugs and theft, which is a $30 billion problem for the pharmaceutical industry. Jumpstart's goal is to compare RFID tagging, which augments an end-to-end supply-chain model, to the current state-required "paper pedigrees," or paper credentials, that accompany drug shipments to ensure their authenticity.

The first phase of the pilot ended this month and included some RFID tagging at the item level. It also used track-and-trace technology from RFID chipmaker Matrics Inc. and supply-chain-software vendor Manhattan Associates Inc. Accenture, a global consulting, technology services, and outsourcing company, has also been actively involved in the project.

"During the pilot, scenarios were executed to validate the benefits of RFID against the business issues of pharmaceutical companies like CVS," says Jack DeAlmo, VP of inventory management and merchandise operations at CVS. DeAlmo spoke about CVS's RFID efforts Wednesday at this week's EPC Global U.S. Conference in Baltimore.

A second phase of the project will further explore RFID's value within the pharmaceutical supply chain. New companies such as Merck, Novartis, Sanofi-Synthelabo, Walgreen's, and Wyeth have joined and will participate in the next phase.

In addition to Project Jumpstart, CVS conducted an internal RFID pilot designed to speed up delivery of prescription drugs to customers and to improve the tracking of those drugs. "Every customer is our best customer, but our pharmacy customers are our most loyal," DeAlmo said. "We need to make sure that we deliver their prescriptions to them in the most efficient manner."

DeAlmo said the company learned several lessons from the industry pilot and CVS's internal pilot: optimum tag location is important, case tags are subject to handling conditions, quality assurance requires that both the RFID tags and any paper-based information are readable and compatible, and readers with more antenna power perform better. But DeAlmo warned that these lessons don't necessarily reflect RFID's effectiveness. "We have to be patient about seeing operational efficiencies with RFID, and it's going to take a few years before we see them."

Also at the EPC Global show, Accenture revealed findings from tests conducted during Project Jumpstart. Based on shipping, tracking, and tracing of nearly 13,500 packages during an eight-week period, results showed that EPC and RFID can help companies meet regulatory and retailer requirements, increase product security and consumer safety, improve order accuracy, and increase the speed of recalls and returns. Results were shared with the U.S. Food and Drug Administration.

Meanwhile, Manhattan Associates came out of the industry pilot's first phase with a new RFID offering for the pharmaceutical industry. The vendor this week released the EPC Manager, an addition to its Integration Platform for RFID. Greg Gilbert, Manhattan Associates' director of RFID solutions and strategy, says EPC Manager, which works with legacy systems and has capabilities to capture unique EPC data, is designed to test the business value of RFID among pharmaceutical manufacturers, distributors, and retailers.

About the Author(s)

Elena Malykhina

Technology Journalist

Elena Malykhina began her career at The Wall Street Journal, and her writing has appeared in various news media outlets, including Scientific American, Newsday, and the Associated Press. For several years, she was the online editor at Brandweek and later Adweek, where she followed the world of advertising. Having earned the nickname of "gadget girl," she is excited to be writing about technology again for InformationWeek, where she worked in the past as an associate editor covering the mobile and wireless space. She now writes about the federal government and NASA’s space missions on occasion.

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