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Hanmi Pharmaceutical Uses RFID to Automate Picking, Shipping

The Korean drugmaker—which has employed EPC tags to track 60 million items annually, and to help it carry out government-mandated price changes—is now expanding the system to wholesalers and drugstores.
By Claire Swedberg
Apr 20, 2012Korea's largest pharmaceutical company, Hanmi Pharmaceutical, is testing a radio frequency identification system at five of its wholesalers, as well as at five retailer locations throughout the nation. Since the company's Hanmi IT division installed the technology two years ago at two factories, the drug manufacturer has tracked 60 million product units annually, from packaging to picking and shipping, thereby enabling an automated process from an order's receipt to the shipment of a packed carton to a wholesaler.

This year, however, the system provided an additional benefit, the firm reports. When the Korean government identified several products requiring a 30 percent price reduction, Hanmi was able to quickly deploy staff members equipped with handheld RFID readers, who located the unsold goods within all of the stores and warehouses, and then addressed price changes accordingly.

A Hanmi cardboard carton with an LSIS Linear RFID tag fitted inside a recess within the box

Every year, Hanmi manufactures 60 million product units (such as individual bottles or boxes of pills) within 500 different product categories, at its two factories in Korea. The company established its Hanmi IT division in 2005, and began investigating RFID technology around the same time, undertaking its first pilot in 2006. With government funding, the firm began installing RFID on its production line in 2009. A growing number of Korean pharmaceutical companies are implementing RFID systems in order to address pending government mandates regarding the need to employ RFID tags or bar codes to track all drugs by 2013. The mandate is intended to provide visibility into the movements of medications through what is a complex supply chain with multiple distribution models and pricing policies. However, says Jay Jun, Hanmi IT's strategy and planning manager, Hanmi was ahead of that mandate, having put in place an RFID system in 2010 so that it could track every item shipped from either of its factories.

In conjunction with RFID, Hanmi was able to implement an automated picking system (APS), using EPC Gen 2 passive ultrahigh-frequency (UHF) RFID tags and readers to identify products, and to then collect, box and ship those items without a need for human intervention. The only manual portion of the process, in fact, is an inspection carried out by Hanmi's staff as each box is packed for an order.

After testing various tags, the company opted to deploy LS Industrial Systems' (LSIS) Satellite and Linear tags, made with Impinj Monza chips. Each tag is encoded with a serial number, the first three digits of which indicate the country (Korea); the following four digits identify the company (Hanmi), while the remaining digits signify the product code. A corresponding bar-coded label is also printed with the same serial number. Hanmi installed 50 fixed readers along the conveyors at both manufacturing facilities, covering a total of 35 factory lines.

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