Capgemini Finds Multi-Billion Dollar Impact Of Radio Frequency Identification Adoption For The Pharmaceutical Industry
Pharmaceutical Companies, Distributors and Hospitals Would Benefit from RFID Adoption Beyond the Supply Chain.
11 December 2003
Princeton, NJ - Radio Frequency Identification (RFID) technology has been hailed for its ability to enable the automatic identification and data capture of tagged items without human intervention, with the potential to revolutionize supply chains across many industries. However, Capgemini, one of the world’s leading providers of outsourcing, consulting and technology services, found in developing a business case for the adoption of RFID in the pharmaceutical industry in partnership with the MIT Auto-ID Center that the benefits of early adoption of RFID extended into drug development and clinical trails processes, as well as improvements to patient safety and effects on grey market activities. This was revealed at an executive retreat today, which brought together 50 decision-makers from the life sciences industry and technology service providers to discuss the current and future state of RFID.
Earlier in 2003, the Auto-ID Center, a consortium of some of the world’s largest corporations that sets the agenda for RFID, asked Capgemini to develop a business case for the implementation of RFID technologies in Life Sciences. At today’s event, Capgemini presented those findings, which identified and quantified areas offering the largest and most practical business benefits for the industry.
“Our analysis shows that application of RFID will have a significant net benefit across the pharmaceutical supply chain from manufacturer to distributor to wholesaler, not to mention additional benefits from improved compliance and reduced patient risk that were not qualified in this analysis,” said Colin Towner, Life Sciences RFID leader for Capgemini. “However, the biggest winners in the short run from RFID adoption appear to be hospitals by improving the quality of care and managing their limited resources better by tracking key assets and helping prevent theft.”
Key Findings.
Key findings from each of the five breakout sessions to delve into the multiple dimensions of the RFID opportunity for pharmaceutical industry were:
The four key features of RFID that can deliver business benefits to pharma companies are unique product identification; non-‘line of sight’ reading of product information; remote tracking of movement and location; and security of identification, from a session entitled “Mechanics of RFID: How It Works”
- Creating a buyers’ consortium of pharmaceutical manufacturers to deal with the Wal-Mart mandate could drive greater adoption of RFID at a lower price per tag, from a session entitled “RFID Supply Chain Improvements & Implication of Wal-Mart Mandate”
- For an average clinical trial, applying RFID can speed completion by up to 5 percent as well as reduce start-up delays and decrease trial errors/dropouts, from a session entitled “RFID Beyond Supply Chain”
- As re-importation of drugs becomes a major political issue in the US and diversion/parallel trade continues to be widespread in Europe, RFID adoption can help to shrink the so-called grey market, from a session entitled “RFID and Counterfeiting & Diversion of Products”
- While the two primary objectives of RFID adoption will be compliance and business process improvement, the shift from today’s “read/store/decide” to an RFID-enabled data environment of “read/decide/store” will make IT architecture, from a session entitled “RFID & Transformation Planning”
“Pharmaceutical companies need to ‘go beyond the beep’ when adopting RFID and automate business processes better in order to shorten the time necessary to accelerate drug development and manufacturing cycle times,” said Terry Hisey, global supply chain and Americas leader for Life Sciences at Capgemini. “Companies which go beyond compliance with RFID will gain a competitive advantage in getting the right product to the right place at the right time for the right level of service.”
Recommendations for RFID Success in Pharma
Capgemini believes there are five key ingredients to successful adoption of RFID inside a pharmaceutical company, and shared them at today’s retreat with the industry. They are:
- Find an internal application first, one that does not require external partners to realize value. The speed to implementation and associated learning will be much faster than attempting to work with partners to affect a cross-company solution. Starting with one product, one plant or one market will allow sufficient learning without slowing the pilot too much;
- Get involved in the standards-setting bodies. Much of the initial work has been primarily accomplished by academics, and further refinement will require business input. Make sure yours is included and that you understand the intricacies of the standards.
- Understand how RFID can help your company enhance its value proposition to customers. Define where your competitive advantage can be increased, and prioritize pilots and investments accordingly.
- Prepare to deal with 10 to 30 times more product data than you have today. Companies that can effectively mine this information for key insights, and have appropriate filters to identify the truly important exceptions/events that occur, will optimize their investment and be able to convert data into information that supports effective decision-making.
- Find an internal champion. This must be someone with passion and commitment to bringing value to your organization from RFID applications. Allow this champion to spread the message across your organization. Many will be skeptical, but some will be enthusiastic. Many RFID-related investigations and projects may be going on already inside the organization. Find them and encourage cross-pollination of ideas without the burden of extensive centralization and excessive control.
About Capgemini
The Capgemini Group is one of the world’s largest providers of Consulting, Technology, and Outsourcing services. The company helps businesses implement growth strategies and leverage technology. The organization employs approximately 50,000 people worldwide and reported 2002 global revenues of 7,047 billion euros.
Capgemini is a sponsor of the MIT Auto-ID Labs and is helping to drive the international standards for RFID while partnering with leading technology companies to provide the enterprise market with comprehensive RFID solutions. In collaboration with MIT Auto ID Labs, Capgemini has developed a business case for the adoption of RFID in the pharmaceutical industry.
Contacts
Capgemini
(917) 934-8735
Marie DiFrancesco
GCI Group
(212) 537-8101
