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RFID Yields Quick ROI for Orthopedic Products Maker
DePuy Orthopaedics, a unit of Johnson & Johnson that manufacturers replacement joints and other orthopedic products, reported positive ROI within months of using RFID to track the individual items packed within its surgical kits. Kits are now processed in less than a minute, compared to the 10 to 30 minutes it took with bar coding.
Feb 26, 2008—This article was originally published by RFID Update.
February 26, 2008—You know the song: "The leg bone's connected to the hip bone...", but you might not know just how many components are needed to connect such parts during orthopedic surgery. A replacement knee joint, for example, typically comes in a kit with dozens of complementary parts, which may or may not be needed for the operation. DePuy Orthopaedics packages and ships an average of 675 of these kits (which it calls "sets") each day, and receives a similar number of returns. The Warsaw, Indiana-based manufacturer of orthopedic devices uses RFID to ensure surgeons receive complete kits and that each part is accounted for.
DePuy now places an ISO 18000-6 standard UHF RFID tag on each item in its orthopedic kits and a master tag on the outer packaging. Prior to shipping orders to hospitals, the kits are moved through an RFID scan tunnel which identifies each item and ensures the kit is complete, then records the serial numbers and lot codes associated with the shipment. Returned kits, which contain the items that were not needed by surgeons for a particular surgery, are also processed through the scan tunnel to instantly record the contents, which are later placed back into inventory.
"It used to take us 10 to 30 minutes to inspect each set, and now we accomplish it in less than a minute," Dave Johnson, director of distribution at DePuy Orthopaedics, said in a video profile of the system produced by ODIN technologies, the Dulles, Virginia-based RFID consulting and integration firm that designed and installed the system. "The accuracy of the RFID process so far has been amazing.
"Being able to develop a scalable system with 100 percent read accuracy required every tool in our toolbox," ODIN technologies president Patrick Sweeney told RFID Update. ODIN now offers a version of the system it developed for DuPuy as a turnkey solution for other manufacturers.
By reducing processing time from 10 to 30 minutes per kit to less than one minute, DePuy has improved efficiency and reduced its labor requirement, and was able to raise productivity. DePuy, which is owned by Johnson & Johnson, claimed positive return on investment within a few months and has hinted it will expand its system to more locations.
Sweeney said the system was more challenging than most product or inventory tracking applications for several reasons, including:
Approximately 65 percent of the orders DuPuy receives require same-day shipment, according to Johnson, so time-consuming packaging and quality control processes posed a challenge to on-time performance. Returns are also time sensitive. To keep inventory levels down, DePuy wants to record returned unused products as quickly as possible so they can be made available to fill new orders.
"I see RFID as a competitive advantage because now I can take some of my resources and redeploy them to other areas," Johnson said in the video.
Zimmer, another orthopedic product manufacturer, previously announced it has a similar system but uses high frequency RFID (see RFID Ensures Surgeons Have No Bones to Pick with Supplier). Separately, Spanish orthopedic supplier MBA Grupo announced plans to manage between one and two million items annually with RFID and to install UHF systems at all 23 of its subsidiaries to track shipments to hospitals (see Med Distributor Converts to Gen2 RFID for Item Tracking).
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