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Best Use of RFID to Enhance a Product/Service: Kuehne + Nagel Monitors Pharmaceuticals to Improve Customer Service

The global transportation and logistics firm turns to RFID to track the location and temperature of shipments.
By Samuel Greengard
Jun 24, 2015

Kuehne + Nagel has built a reputation as a global leader in business-to-business sea-freight, air-freight, overland and contract logistics. The 125-year-old firm, headquartered in Switzerland, has more than 63,000 employees and a presence in more than 100 countries. It serves a wide range of industries, including aerospace, automotive, industrials, high tech, oil and gas, retail, and pharmaceutical and health care.

Five years ago, Kuehne + Nagel set out to improve customer service. The company wanted to develop a system that would monitor the temperature of sensitive pharmaceutical and health-care products in transit on a near-real-time basis. "It's critical to keep the majority of medications within certain temperature ranges during transportation," says Jon Chapman, Kuehne + Nagel's global pharmaceutical product manager. "If you go outside the range, you have no guarantee the product will work effectively."

AirFrance KLM Martinair Cargo partners with Kuehne + Nagel to RFID-track and monitor temperature-sensitive pharmaceuticals. (Photo: AirFrance KLM Martinair Cargo)
Temperature fluctuations sometimes occur during the shipping process or if the temperature-control system fails, and that information wasn't available until a shipment arrived at the destination. "Historically, pharma companies have used data loggers, and they download the data at the destination and then make a decision whether the product is fit to use and can be sold," Chapman says. "Some of the shipments travel to very warm regions that present significant challenges." Kuehne + Nagel wanted to "automate the monitoring process," he says, "to reduce the risk of a problem occurring, and make it easier to quickly identify if there was a problem."

In March 2011, Kuehne + Nagel launched KN PharmaChain—which features an active RFID solution to track and monitor shipments that travel by air and ground across continents, 24-7, in near real-time. RFID sensor tags attached to a shipment monitor and log temperature data. The data is transmitted to RFID readers as soon as a shipment arrives at a waypoint or final point in its journey. The data is transferred to Kuehne + Nagel software, which generates an alarm if an unacceptable temperature deviation occurs. That way, the CareTeam, a trained 24-7-365 monitoring and rapid response team, can take immediate action to correct the situation before the product is harmed.

Kuehne + Nagel has installed the technology globally at hundreds of points along the supply chain. Although the firm charges extra fees for the service, premium pharmaceutical and health-care companies use it regularly, Chapman says. "It's not something every company chooses to use or deploys for all products and situations," he says. "It's something that's valuable for critical shipments involving high-value products, and the partnership between our customers and our company is constantly expanding."

Developing the Solution
Five years ago, Kuehne + Nagel formed a crossfunctional team—with project managers and representatives from logistics, procurement, pharma and IT—to explore how to build an advanced logistics and tracking system using RFID and wireless communications. The team examined an array of issues, including freight flows, technology options, total cost of ownership, data standards, IT compatibility with internal and external systems, and time and cost models. Once Kuehne + Nagel defined the scope of the project, the team whittled down a long list of RFID providers to two candidates, whose solutions they tested using predetermined criteria.

Kuehne + Nagel decided to use out-of-the box active RFID hardware and software from CartaSense, a provider of monitoring solutions. The firm's U-Sensor tags identify and monitor freight shipments, and U-Sensor Gateway fixed readers are located at warehouses and other facilities along the supply chain. U-Sensor Gateway Dashboard readers manage data reception and transmission during trucking.

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