Nov 06, 2007MBA Group distributes medical devices and supplies related to orthopedic surgery, neurosurgery, cardiovascular surgery and anesthesia, to private and public hospitals in Spain, Italy and Portugal. In the past, workers at the company's central warehouses in Spain had to manually check the contents of each container it shipped to customers before that container left the site. The process could be time-consuming and potentially allow errors to slip through. Now the medical products supplier is using radio frequency identification to automate that process and improve the accuracy of its orders.
The RFID deployment began with a proof-of-concept phase that lasted from April to June 2006, says Miguel Garcia, commercial director at BC Biocon, an IT services division of MBA. BC Biocon developed the RFID program, known as "q2dc"—an acronym for "quién, qué, dónde y cuándo" (who, what, where and when)—which was integrated with MBA's existing ERP system. At that time, the study was based on a few of the more than 5,700 products MBA offers.
Following that phase, permanent installation of the system began in May 2007. The first task, Garcia says, consisted of labeling every product already in stock, as well as the new products being received from different suppliers—200,000 units altogether—with EPC Gen 2 RFID labels from UPM Raflatac. Thus far, says Marcus Vaenerberg, UPM Raflatac's VP of RFID sales, MBA has purchased a total of 300,000 RFID labels.
Once the majority of items were affixed with the RFID labels, BC Biocon installed an Intermec IF5 reader in the warehouse, attached to a conveyor surrounded by four RFID interrogator antennas. It then used software it developed to integrate the reader into MBA's back-end ERP system. "The system has been processing the orders served from the central warehouse since mid-October," Garcia explains.
When a shipment arrives from a supplier, MBA warehouse personnel manually compare that supplier's delivery paperwork with the product itself. The workers input the serial and batch numbers of each product into the company's ERP system and encode a unique Electronic Product Code (EPC) number onto the label's embedded tag, while a Toshiba printer prints the product's bar code, MBA's logo and other related text on the label's surface. The RFID label is attached to the product's carton, which is placed on the conveyor and transported past the RFID interrogator antennas. The tag's unique RFID number is read and linked with the product's data, and the tagged carton is then stored on a shelf until it is needed to fill an order from a hospital.
The ERP system compares what should have been picked against what actually has been processed, Garcia says. "For each order," he explains, "the system shows its destination, the total number of articles and a list of missing or surplus articles." After the validation is complete, the RFID system automatically moves the conveyor forward to let the pallet off the conveyor.
"The main advantage lies in the reduction in the time taken to read the products during the order validation process," says Garcia, "and in the guarantee that the data on the delivery notes and invoices for a given period is consistent with warehouse stocks."
Garcia says the RFID system has helped the MBA Group reduce reconciliation times between product stocks, and also eliminate annual accounting adjustments due to loss of materials in storage. "These two qualitative criteria alone justified the investment," Garcia says. In addition, he adds, order-preparation time is reduced and the information obtained is more reliable than that resulting from the previous manual method, "enabling us to process more orders with the same personnel and eliminating order errors."
According to Garcia, the company is still working on additional challenges, including how to use the system with products that have been returned to the warehouse—for instance, when customers receive MBA Group products for surgical procedures but ultimately do not use them. Within the next few months, MBA Group intends to test the RFID system at three of its distribution centers in the north of Spain. It then plans to extend the system to the remainder of its distribution centers throughout Spain and Portugal in 2008.
The third phase of the deployment will cover the warehouses of MBA Group's 23 divisions throughout Spain, Italy and Portugal. The group also intends to provide its customers with Intermec IP4 handheld RFID readers. "This," Garcia says, "will enable MBA to track product stock levels in the hospitals, as well as the expiration dates of sterile products."
