This article was originally published by RFID Update.
August 11, 2005—Last week RFID Update participated in a phone call discussion about the cold chain. Moderated by Steve Roemerman, Chairman of Regan, Jacob & Sydney, the meeting covered all aspects of the ways in which RFID is being used throughout the cold chain to improve old processes and create new ones. The thought leader participants, while all actively involved in cold chain applications, came at the topic from varying perspectives: Dean Frew is CEO of RFID solutions provider Xterprise, Adrie Kalie is the RFID Program Manager of Dutch logistics giant TNT, and Kevin Brown is a Vice President of sour cream-producer Daisy Brand, where he acts as Information Systems Manager. The following is the second of a two-part series highlighting key takeaway points from the discussion.
One of the points made by Daisy Brand’s Brown was that while the potential is huge for RFID to improve the cold chain, it remains largely untapped. Currently, there are pieces of the cold chain that have begun integrating RFID, but until the whole chain is covered end to end and the relevant information is transferred among trading partners seamlessly, the value is still only nominal. “If the end of the supply chain doesn’t have the ability to share [the RFID] information, then it’s all for naught for all of us,” he said. “The value is in the data,” not the technology itself. To really make it work, therefore, “We have to be able to maintain visibility from a good’s origin to its destination and correlate that data.” Xterprise’s Dean Frew added that a key requirement for doing so is that “all stakeholders be on the same page,” from the manufacturer to the distributor to the end customer.
Another sign of the relative immaturity of RFID cold chain applications is that small companies are doing the majority of integration work. Because existing backend and ERP systems cannot handle the new realtime data generated by RFID tags and related sensors at the enterprise edge, there is a need for bleeding edge integration work that smaller, nimbler technology solutions providers are able to provide. TNT’s Kalie said, “We’re an SAP shop, but SAP simply cannot handle sensored environments.” So he sees “a lot of small businesses out there developing integrated solutions” for situations like TNT’s. Do not expect this phenomenon to last, however. As the market matures, so too will big integration companies’ expertise in this area. “If you’re a systems integrator,” said Brown, “you have to be in a space where not only can you handle the traditional integration work between large ERP systems and supply chain management and those kind of things, but you have to start addressing these real time events. Eventually, you have to get there.”
And they will; the ever increasing demand for RFID and sensor cold chain applications will attract increasingly more players. The pipeline of new pharmaceuticals alone could be a lucrative market. Kalie cited data from a recent Biotechnology Industry Organization article that there are about 350 new biotech products in clinical trials, more than one-third of which are considered to be temperature sensitive. The problem of how to ship such high-maintenance product is one that spells huge opportunity for cold chain solution providers.
It is in the pharmaceutical domain where “platform convergence” is most evidently beneficial. The idea is that the RFID reader infrastructure being rolled out in North American and European cold chains today will allow more than the mere monitoring of environmental conditions. Eventually, it could be leveraged to generate key improvements to change-of-ownership and tracking processes as well. Frew explained that “regardless of what it is you are shipping, you typically have multiple needs you’re trying to address, multiple pain points in your supply chain.” Classic examples include the monitoring and validating of temperature at different points as a function of time, trying to track the location of product through the supply chain, and change-of-ownership/hand-off verification. With a true RFID cold chain infrastructure, all three of those elements can be converged on one technology platform. “So rather than having a temperature recorder, then a bar code scanner with a human involved, then paper work that has to be signed at the dock, you can do all three of those together.”
Take the five-minute Cold Chain Survey