Supply Chain Innovation: The ROI on RFID

Pharmaceutical Reverse Distribution Business

GENCO Pharmaceutical Services, formerly Capital Returns, is a leading provider pharmaceutical reverse distribution. Until recently, managing pharmaceutical returns and recalls meant having the product opened and touched by many hands. The process was labor intensive and took significant time to accomplish.

Supply Chain Security

Complicating the pharmaceutical reverse distribution process was the security needed for Schedule II controlled substances. These pharmaceuticals have additional reporting requirements mandated by the U.S. Drug Enforcement Administration.

Goals

GENCO Pharmaceutical looked to achieve two business goals with the implementation of the RFID system:

Increase productivity
Invest in technologies that promote efficiency

Delivering an Innovative Supply Chain Solution

GENCO Pharmaceutical invested in the hardware and used their own engineers to devise an RFID-based solution the addressed both goals. The streamlined processed included:

Sending clients bar-coded bags that products were package into before boxing
Separating Schedule II product from over-the-counter pharmaceuticals automatically using a RFID antenna and bar code readers
Using barcode readers to time-stamp received products
Using barcode technology in processing all products at every step

Incoming pharmaceuticals scanned with RFID technology

Supply Chain Innovation Leads to RFID Expertise

As you would expect, building an entire return center around RFID processes lead to engineers becoming RFID experts. GENCO engineers optimized the center for the:

Read rate of RFID
Placement of antennas, tags and pallet stations
Ideal conveyor speeds

Return on Investment

The results exceeded expectations. The payback period for the investment was just 5 months. Overall productivity increased from 27.6 cases per hour to 62.4, a 126% increase. Under the old system every package needed to be opened and inspected. With RFID technology in place, the opening of packages decreased from 100% to just 6%. In addition, by automatically sorting Schedule II controlled substances, greater security was achieved. The RFID implementation delivered on both desired goals resulting with increased productivity at GENCO Pharmaceutical’s reverse distribution center.