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Protecting the Brand While Gaining Operational Efficiencies with Item Level Identification Kirsi Viskari Technical paper + 7604

Takeaways from this presentation • What is item-level identification? • Why should it be used? • How could it be used? • What are the obstacles ? Paper 7604 Kirsi Viskari 2

Contents • Identification techniques and methods • Use cases • Conclusions Paper 7604 Kirsi Viskari 3

Printed identification • Human eye or machine readable codes • Barcodes most common – Linear vs two-dimensional • Conventional printing limits variable information usage – Inkjet and other digital printing enables • Low-cost method Paper 7604 Kirsi Viskari 4

Embossing and holograms • Embossing used for production related batch level information • Holograms mainly used for authentication – Normal holograms easy to copy • Micro embossing used for hologram-like effects • Embossing not adding new materials • Limitations for variable information usage Paper 7604 Kirsi Viskari 5

Laser marking • Used in packing lines for production related information • Enables also usage of variable information • Not adding new materials • Difficult to erase • High investment, but low variable cost Paper 7604 Kirsi Viskari 6

Radio Frequency Identification RFID • Efficient identification of several items at a time without a line of sight • HF for short distance, UHF for longer distance • Passive tags in supply chain cases • Limitations with metal and liquids • Relatively high variable cost (tags) Paper 7604 Kirsi Viskari 7

Fingerprint technologies • Information interpretated from scanning a spot of the surface • Laser bean diffraction exhibits a pattern – fingerprint • Not adding any materials, impossible to copy • Requires special readers and careful guarding of first readings Paper 7604 Kirsi Viskari 8

Logistics use cases; wholesale/transport • Logistics efficiency crucial for these companies • Often not part of decision makers when choosing identification systems, but have to comply • Increasing demand and decreasing order size speak for automated solutions like RFID Paper 7604 Kirsi Viskari 9

Logistics use cases; retailer • Major retailers are pushing actively for new technologies like RFID – Having the power to mandate • Wal-Mart as the spear head • Main objective to improve inbound and in-store logistics and reduce out-of-stock situations Paper 7604 Kirsi Viskari 10

Logistics use cases; consumer • Case specific services existing (UPS, FedEx etc) – Consumer needs to know which system to use • New technologies available, but use cases missing – > hen-and-the-egg situation • Increased functionalities like digital cameras in mobile devices, but user experience not yet on acceptable level Paper 7604 Kirsi Viskari 11

Logistics use cases; reverse logistics • Need to be controlled on item level in pharmaceutical product recalls • Would provide benefits for the manufacturer in – Consumer electronics recalls – Warranty cases like in car industry • Efficient methods required together with item level identification Paper 7604 Kirsi Viskari 12

Anti-counterfeiting use case • Increasing problem causing – Financial losses for brand manufacturers – Increased costs for customs and other officials – Health risk for consumers • Brand protection means often easy to copy – secure means expensive to implement • Involving all supply chain parties improves the security level Paper 7604 Kirsi Viskari 13

Conclusions • Implementation of item level identification is slow due to – Rapidly developing technology – Lack of global standards • No one technology or method suitable for all cases – Combining technologies offers flexibility and cost-efficiency – Different technologies for different packaging levels Paper 7604 Kirsi Viskari 14

Combining packaging levels in tracking 08:32:21 08:57:32 14:02:52 Tracking history Transparent relations handling allows 12.01.2007 08:32:21 Packing line unique item level time stamps to be 12.01.2007 08:57:32 Warehouse inbound created and updated automatically 12.01.2007 14:02:52 Warehouse outbound when pallet or container is read and 13.01.2007 18:32:12 Wholesaler inbound identified in the logistics chain. 15.01.2007 06:20:13 Wholesaler outbound 15.01.2007 08:54:28 Retailer inbound Paper 7604 Kirsi Viskari 15

Case: PackAgent Securing Orion Pharma’s Prescription Drug • Whole supply chain (pharmaceutical brand owner, converter/printer, distributor/wholesaler, 7 pharmacies) • Item level RFID and shipping case level RFID and barcode • One prescription drug • Duration from Nov 2005 to April 2006 Paper 7604 Kirsi Viskari 16

Main results of the pilot • Manufacturer: – Unit level information management enables accurate and real- time supply chain management – RFID used in warehouse logistics can alone increase efficiency substantially • Wholesaler: – Increased effectiveness with decreasing order sizes and increased transactions • Retailer: – Change from bar codes to RFID label could be bigger than the change from ordinary price tags to bar codes Paper 7604 Kirsi Viskari 17

Summary • Fast developing technologies offer new possibilities • Item level identification will become more and more important – > The role of packaging will increase • Need for global, accepted standards – Or need for a strong initiator Paper 7604 Kirsi Viskari 18

Thank You for Your Attention! Paper 7604 Kirsi Viskari 19