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Purdue Pharma Gets Down to the Item

The pharmaceutical company is the first in the world to integrate RFID tagging of individual bottles of pills into a packaging line. Learn how Purdue did it.
By Mark Roberti
Feb 01, 2005—On Nov. 29, 2004, a small team of packaging, IT and security experts at Purdue Pharma made history. At a production facility in Wilson, N.C., the group went live with the world’s first system for tagging large numbers of unique items with EPC tags. Just as the Wright brothers’ first flight at nearby Kitty Hawk ushered in the era of manned flight, the Purdue tagging project marks the dawn of a new era of smart products.

Founded in 1892, Purdue Pharma, a privately held pharmaceutical company based in Stamford, Conn., is best known for making over-the-counter medicines such as Betadine antiseptics and Senokot laxatives. The company also makes prescription drugs, including Schedule II narcotics MS Contin and OxyContin. It was the need to track these painkillers that led to the company’s interest in RFID.

In November 2003, Wal-Mart announced that it would require its suppliers of Schedule II narcotics to tag individual bottles with RFID tags, beginning in 2004. The suppliers were invited to Wal-Mart’s Bentonville, Ark., headquarters to be briefed on what was expected of them. Purdue sent a small team of executives, including David Richiger, executive director of package design and development, and Chuck Nardi, executive director of supply chain and corporate systems.

Senior executives at Purdue felt RFID was the wave of the future and would eventually deliver benefits throughout the pharmaceutical supply chain by reducing counterfeiting and improving patient safety. They made the bold decision not just to comply with the Wal-Mart mandate but to integrate RFID into Purdue’s OxyContin production line. By doing this, they could capture data as the product moved from its packaging area to “the vault”—a super-secure storage area—and then to the shipping area.

“From the start, we decided we didn’t want to take a slap-and-ship approach,” says Richiger. “We wanted an automated way to integrate RFID tagging into our current packaging line, and we wanted to integrate the data into our IT systems.”

A Cross-Functional Team
Richiger and Nardi quickly formed a cross-functional RFID project team, which included Jeff Zerillo, executive director, supply chain management; Mike Celentano, associate director of supply chain and RFID systems; Sajan Idicula, systems analyst, logistics; Kevin Leggett, electronics and implementation specialist; Harry Ramsey, senior package development engineer; John Fox, assistant director, materials management; and Aaron Graham, VP and chief security officer.

The team traveled to Arkansas in December 2003 to attend a gathering of suppliers and technology vendors at a hotel near Wal-Mart’s headquarters in Bentonville. One of the first tasks was to identify companies that could deliver RFID tags based on the Class 1 and Class 0 Electronic Product Code specifications that Wal-Mart wanted to use. Alien Technology and Matrics (now owned by Symbol Technologies) were, at that time, the only companies that could deliver EPC tags. Matrics had a 1-inch by 1-inch tag that was perfect for the small pill bottles (roughly 4 inches high by 2 inches wide by 1 inch deep) that Purdue was using to ship OxyContin in, so Purdue quickly settled on Matrics as its RFID technology provider.

In January 2004, Matrics sent a team to Purdue’s Wilson facility to survey the site and begin fleshing out a plan for a pilot. Later that month, Purdue invited executives from SAP to the Wilson facility. Purdue uses SAP’s R3 enterprise resource planning (ERP) software, as well as its supply chain management (SCM) application, and wanted to learn how the data captured by the RFID system could be integrated with these IT systems.

Matrics worked with SAP to develop a prototype system that integrated Matrics readers with SAP’s supply chain management application. In April, Purdue’s RFID team gathered in a conference room at SAP’s U.S. headquarters in Newtown Square, Pa. A Matrics reader was able to read every serial number on 48 individually tagged bottles that were packed in a carton that was more than 10 feet from the reader antenna. The numbers were captured by a prototype middleware SAP had been developing, called Auto-ID Infrastructure (AII), and then transmitted to SAP’s SCM application, both running on servers at SAP world headquarters in Walldorf, Germany. The captured data was presented back to the system in Newtown Square nearly instantaneously. The team realized then that they had just achieved a major proof-of-concept milestone.
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