Revolutionising the pharmaceutical supply chain with RFID tracking technology

Bayer S.p.A. is an Italian division of Bayer AG, the global pharmaceutical company. It serves more than 17.000 customers in Italy and relies on an extensive supply chain of logistics and transport partners.

Murata ID Solutions provides turnkey RFID and IoT solutions. Born in 2005 as a spin-off company of the University of Parma (Industrial Engineering Dept), the company has been part of the Murata Group since 2017.

Supply chain logistics tracking challenge

The visibility of Bayer’s distribution processes was a major concern for the company. It couldn’t track deliveries in real time and was unable to monitor the progress of goods in the supply chain. Any problems with packages – such as missing or damaged goods – were only discovered when their customers received their deliveries.

Murata ID Solutions provided Bayer with a tracking solution built around Radio Frequency Identification (RFID) technology. The solution:

• • provides full and real-time visibility of all distribution operations.
• • delivers value to Bayer’s partners.
• • increases the customers’ service level.

What is RFID technology?

RFID is an accurate and cost-efficient identification technology used to automatically track large volumes of goods. An RFID label is attached to an item and emits a signal which is read with an RFID reader. Every tag is unique, meaning individual assets can be tracked with high accuracy using the data collected by the reader.

The scale of the project which Murata ID Solutions proposed to Bayer was unheard of in the pharmaceutical sector as the technology is not widely leveraged there. However, Bayer was convinced that Murata ID Solutions’ expertise, research and development credentials, and partnership with the University of Parma RFID laboratory, would enable it to quickly and successfully deliver the industry-first project.

Firstly, Murata ID Solutions carried out a feasibility study to provide a blueprint of the key parameters, action points, and expected outcomes of the project. Then it proposed a three-part, turnkey solution consisting of:

• • RFID labels
• • RFID printers and readers
• • dedicated business intelligence (BI) software

The feasibility study was completed in 2019 and by spring 2020, the tracking system was fully operational.

RFID tracking solution

The RFID solution allows the comprehensive tracking of individual boxes of pharmaceutical products as well as the sustainable GreenPallets they are shipped on.

RFID readers and stations have been installed at Bayer’s distribution partners’ facilities in every location. This network has over 30 facilities. Packages and pallets are scanned each time they arrive at and depart from a facility. Tags can be read as many as 15 times before the shipment reaches the end of the supply chain.

Increasing supply chain efficiencies through data interpretation and management

The id-Bridge Middleware processes and interprets the information transmitted from the tagged products. It forms a scalable software layer integrating the RFID devices with the legacy ERPs of Bayer’s logistics and transport partners. The processes that Bayer needs to track are principally receipt, shipping and inventory and the id-Bridge dashboard is tailored around these processes. This simplifies the management of the different stages of the operation. When a label is scanned, the dashboard receives the information and interprets the data, turning it into actionable insight. Bayer reviews the information and has real time visibility over the location of each product in the supply chain.

Optimising the supply chain: benefits of the RIFD solution

The transparency and insight gained from the tracking data has helped Bayer improve its customer service, resilience, security, and productivity.

The RFID solution has the following benefits:

• • It is easy to monitor performance and meet operational KPIs.
• • It promotes a proactive approach by providing alerts if a package is missing, enabling immediate action to address potential issues.
• • It improves customer service by minimising additional costs and delays.
• • It improves supply chain efficiency by increasing accuracy and eliminating distribution errors and returns.
• • It strengthens supply chain security.

Improving pharmaceutical supply chain security

The real time visibility and alerts increase the security of the supply chain. Moreover, the RFID labels don’t need line of sight to be read so each shipment is wrapped in white film with the RFID label not visible inside. The products are impossible to identify visually and this reduces the risk of theft. The id-Bridge dashboard has an alert system to notify the operator to problems, such as missing packages.

Creating a sustainable supply chain

The RFID technology enhances Bayer’s sustainability and circular economy initiatives. It allows the company to effectively track its sustainable, recycled GreenPallets and ensure their steady supply. As a result, the RFID labels have decreased turnover time, improved stock management and helped Bayer adjust quickly to changes in demand.

Benefits of the RFID solution for supply chain partners and customers

It is not just Bayer which has benefitted from the technology; the company’s Logistics and Transport partners also recognised RFID’s high value and were able to integrate the solution without disrupting established processes. The technology has helped collaboration between supply chain partners as handing over the responsibility for each shipment is now easy to document. Improvements in efficiencies have also enabled Bayer to make cost-savings on logistics and distribution expenditures.

Bayer’s customers can benefit from an increased service level by taking advantage of the RFID tagged boxes for fast, automatic receipt, inventory count and other internal processes.

A radical transformation of the pharmaceutical supply chain

Murata ID Solutions’ RFID tracking solution has been a very cost-effective way for Bayer to monitor and improve their supply chain operations. Michele Palumbo, Head of Supply Chain Management at Bayer S.p.A stated that the RFID investment payback period for Bayer was less than 6 months.

Murata ID Solutions’ RFID tracking solution builds traceability and flexibility into the supply chain. It is a system which works not just for the manufacturer, but also for their distribution partners and customers. The technology radically transforms the supply chain by providing access to the data needed to gain visibility, reduce risk and improve operations.

Further evolution: RFID system linked to Blockchain

The solution developed for Bayer is continually evolving. At pilot level Murata ID Solution’s RFID system now integrates with Blockchain, which means that the system writes all relevant information in Blockchain. This open system based on shared information thanks to Blockchain notarisation and transparency enables a stronger and more faithful collaboration between Bayer and its stakeholders. It increases confidence and reliability between all logistic partners.