Is it real? Or just a very clever fake? It's practically impossible to tell real drugs from the adulterated or counterfeit. Now one drug maker is using tiny radio-frequency tracking chips to assure pharmacists they're getting the genuine article.
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
To the long list of weapons in the war on drugs—trained dogs, undercover agents, spy planes—we can now add the RIFD chip. And if that sounds improbable, consider this: One of the world's most renowned drug cops, Aaron Graham, says that when it comes to thwarting counterfeiters and deterring thieves, RFID is the most promising technology he's ever seen.
Graham should know. He spent years tracking and buying counterfeit drugs, first as an undercover agent smuggling prescription drugs for the Food and Drug Administration (FDA), and later in a similar role for Pfizer. Today, as vice president and chief security officer for Purdue Pharma LLP, Graham is using what he's learned during his 20 year career to protect his employer's theft-prone painkillers while in transit.
He's counting on RFID to drive a stake through the heart of the shadowy black market drug business. Under Graham's direction, Purdue Pharma has begun attaching RFID tags to bottles of its narcotic painkiller OxyContin. In November, it began shipping batches of tagged products to two pilot customers, Wal-Mart and drug wholesaler H.D. Smith. In January, Purdue Pharma outfitted a manufacturing plant in New Jersey with RFID technology so it could start tagging its newest product, another potent painkiller called Palladone.
Lots of identifying markings
As for how a tiny label could deter drug rings, it's all about the indelible tracking information that label is now able to provide. The RFID tag applied to each 100-count bottle of OxyContin in the manufacturing process bears an electronic product code (EPC). That EPC, in effect, provides each bottle leaving the plant with a portable database containing such information as when and where the pills were packaged. That "pedigree" then accompanies the bottle as it moves from the manufacturer, to the wholesaler, and on to the pharmacy. When the bottle arrives at a drug store, the pharmacist can easily confirm the drug's origin—and therefore, its legitimacy—simply by scanning the tag.
It's worth noting that the bottles Purdue Pharma tags are the bulk bottles provided to retailers, not the smaller bottles dispensed to individual customers. In addition, the company only tags the 100-count bottles, not their shipping cartons. Carton tagging has proved unnecessary because the manufacturer is recording 100-percent tag read rates on all outgoing shipments, and Wal-Mart and H.D. Smith have recorded 100-percent read rates on their end as well.
Once that tiny read-only RFID tag is applied to a bottle, tracking it is a cinch. "We know when the RFID tag goes on the bottle in the manufacturing line," says Graham. "We know when the bottle comes off the line, we know when it goes into our vault, we know when it comes out of our vault, we know when it goes to the dock, and we know when it gets to the customer."
But is that enough to thwart thieves and counterfeiters? "I've been a cop for over 20 years and I've been studying the movement of prescription drugs since 1994, and clearly this is the most progressive technology I've ever seen," says Graham. "RFID is the first technology I've seen that will give our industry the ability to distinguish counterfeit from authentic, and to track the product from the manufacturer to the drug store and determine when somebody tries to introduce a counterfeit drug into the distribution channel."
Purdue Pharma has been so successful in creating its anti-counterfeit track and trace program that another major retailer and a second drug wholesaler have asked the company to ship RFID-tagged product to their facilities as well.
Can't touch this!
Of course, no technology is failsafe; and Purdue Pharma isn't relying solely on RFID to curb thefts of OxyContin. The drug manufacturer also has a security program in place that the U.S. Mint would envy.
For example, as an added deterrent to thieves and counterfeiters, the company has adopted what Graham calls fully integrated anti-counterfeiting packaging. Under the system, the RFID tags are strategically concealed behind the bottles' existing labels. In addition, those labels—at least in OxyContin's case—feature a variable-effect, color-shifting ink, similar to the technology used to deter the counterfeiting of U.S. currency.
Purdue Pharma has also configured its manufacturing sites to double as distribution centers, which cuts an entire leg out of the transportation process. "We distribute product straight from our manufacturing sites," says Graham, "because [shipping it to] a distribution center would be one additional step that we don't want to worry about from a transportation perspective. Our facilities are very Fort Knox-like."
Once a shipment is under way, Purdue employs armed guards and uses armored transportation carriers to discourage holdups. It has invested in GPS (global positioning system) tracking devices so it can track the movement of its product at all times. In addition, undercover agents follow each load once it leaves the dock.
"We have the most progressive transportation security protocol in the country for pharmaceutical drugs," says Graham, adding that the FBI has told him Purdue's system should be considered the gold standard for U.S. drug makers. "It's a very sophisticated and integrated transportation security protocol that is redundant in order to protect the load."
Other than a couple of minor incidents in 2001 when fake OxyContin showed up from overseas, Purdue hasn't had any major problems with counterfeiting. However, OxyContin continues to be a prime target for theft. But now when product is stolen, Graham believes the RFID tags will help police and drug enforcement agents track down and convict the thieves. In fact, Purdue Pharma has plans to donate 100 hand-held scanners from Symbol Technologies to law enforcement officials. When authorities recover stolen drugs, they can simply scan the label to determine where the supply chain was breached.
What price safety?
Of course, all this comes at a price—a price reportedly in excess of $2 million when the costs of the RFID tags and infrastructure are totaled up. What does Purdue Pharma stand to gain? Well, to begin with, by using RFID tags, it stays in Wal-Mart's good graces. As a top 100 supplier to Wal-Mart, Purdue comes under the retailer's mandate to include RFID tags on Class II drugs. The tags also keep it in compliance with FDA track and trace requirements for prescription drugs. And Graham adds that Purdue Pharma is also the first pharmaceutical company to comply with a multi-layered approach to combating counterfeit drugs recommended by the FDA's Counterfeit Drug Task Force last fall.
Still, Graham admits that other than some discounts issued by insurance companies because of the strong security protocols in place, the only other return on investment is the solace of knowing that its customers are buying authentic products.
"Usually corporate security isn't the place to demonstrate ROI," he says. "But when you're talking about human safety, it's a pretty [worthwhile] commitment. And as word gets out that the cops are solving some of these crimes, it'll act as a deterrent. It's all about [keeping] the bad guys [away] from your brand."
Parcel giant FedEx Corp. is automating its fulfillment flows by investing in the AI robotics and autonomous e-commerce fulfillment technology firm Nimble, and announcing plans to use the San Francisco-based startup’s tech in its own returns network.
The move is significant because FedEx Supply Chain operates at a large scale, running more than 130 warehouse and fulfillment operations in North America and processing 475 million returns annually. According to FedEx, the “strategic alliance” will help to scale up FedEx Fulfillment with Nimble’s “fully autonomous 3PL model.”
“Our strategic alliance and financial investment with Nimble expands our footprint in the e-commerce space, helping to further scale our FedEx Fulfillment offering across North America,” Scott Temple, president, FedEx Supply Chain, said in a release. “Nimble’s cutting-edge AI robotics and autonomous fulfillment systems will help FedEx streamline operations and unlock new opportunities for our customers.”
According to Nimble founder and CEO Simon Kalouche, the collaboration will help enable FedEx to leverage Nimble’s “fast and cost-effective” fulfillment centers, powered by its intelligent general purpose warehouse robots and AI technology.
Nimble says that more than 90% of warehouses today still operate manually with minimal or no robotics, and even those automated warehouses use robots with limited intelligence that are restricted to just a few warehouse functions—primarily storage and retrieval. In contrast, Nimble says its “intelligent general-purpose warehouse robot” is capable of performing all core fulfillment functions including storage and retrieval, picking, packing, and sorting.
For the past seven years, third-party service provider ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
Photo courtesy of Dematic
For the past four years, automated solutions provider Dematic has helped support students pursuing careers in the STEM (science, technology, engineering, and mathematics) fields with its FIRST Scholarship program, conducted in partnership with the corporate nonprofit FIRST (For Inspiration and Recognition of Science and Technology). This year’s scholarship recipients include Aman Amjad of Brookfield, Wisconsin, and Lily Hoopes of Bonney Lake, Washington, who were each awarded $5,000 to support their post-secondary education. Dematic also awarded $1,000 scholarships to another 10 students.
Motive, an artificial intelligence (AI)-powered integrated operations platform, has launched an initiative with PGA Tour pro Jason Day to support the Navy SEAL Foundation (NSF). For every birdie Day makes on tour, Motive will make a contribution to the NSF, which provides support for warriors, veterans, and their families. Fans can contribute to the mission by purchasing a Jason Day Tour Edition hat at https://malbongolf.com/products/m-9189-blk-wht-black-motive-rope-hat.
MTS Logistics Inc., a New York-based freight forwarding and logistics company, raised more than $120,000 for autism awareness and acceptance at its 14th annual Bike Tour with MTS for Autism. All proceeds from the June event were donated to New Jersey-based nonprofit Spectrum Works, which provides job training and opportunities for young adults with autism.
The logistics process automation provider Vanderlande has agreed to acquire Siemens Logistics for $325 million, saying its specialty in providing value-added baggage and cargo handling and digital solutions for airport operations will complement Netherlands-based Vanderlande’s business in the warehousing, airports, and parcel sectors.
According to Vanderlande, the global logistics landscape is undergoing significant change, with increasing demand for efficient, automated systems. Vanderlande, which has a strong presence in airport logistics, said it recognizes the evolving trends in the sector and sees tremendous potential for sustained growth. With passenger travel on the rise and airports investing heavily in modernization, the long-term market outlook for airport automation is highly positive.
To meet that growing demand, the proposed transaction will significantly enhance customer value by providing accelerated access to advanced technologies, improving global presence for better local service, and creating further customer value through synergies in technology development, Vanderlande said.
In a statement, Nuremberg, Germany-based Siemens Logistics said that merging with Vanderlande would “have no operational impact on ongoing or new projects,” but that it would offer its current customers and employees significant development and value-add potential.
"As a distinguished provider of solutions for airport logistics, Siemens Logistics enjoys a first-class reputation in the baggage and air-cargo handling areas. Together with Vanderlande and our committed global teams, we look forward to bringing fresh impetus to the airport industry and to supporting our customers' business with future-oriented technologies," Michael Schneider, CEO of Siemens Logistics, said in a release.
I recently came across a report showing that 86% of CEOs around the world see resiliency problems in their supply chains, and that business leaders are spending more time than ever tackling supply chain-related challenges. Initially I was surprised, thinking that the lessons learned from the Covid-19 pandemic surely prepared industry leaders for just about anything, helping to bake risk and resiliency planning into corporate strategies for companies of all sizes.
But then I thought about the growing number of issues that can affect supply chains today—more frequent severe weather events, accelerating cybersecurity threats, and the tangle of emerging demands and regulations around decarbonization, to name just a few. The level of potential problems seems to be increasing at lightning speed, making it difficult, if not impossible, to plan for every imaginable scenario.
What is it Mike Tyson said? Everyone has a plan until they get punched in the mouth.
It has never been more important to be able to pivot and adjust to challenges that can throw you off your game. The report I referenced—the “2024 Supply Chain Barometer” from procurement, supply chain, and sustainability consulting firm Proxima—makes the case for just that. The company surveyed 3,000 CEOs from the United Kingdom, Europe, and the United States and found that the growing complexities in global supply chains necessitate a laser-sharp focus on this area of the business. One example: Rightshoring, which is the process of moving business operations to the best location, means companies are redesigning and reconfiguring their supply chains like never before. The study found that large numbers of CEOs are grappling with the various subsets of rightshoring: 44% said they are planning to or have already undertaken onshoring, for instance; 41% said they are planning to or have undertaken nearshoring; 41% said they are planning to or have undertaken friendshoring; and 35% said they are planning to or have undertaken offshoring.
But that’s not all. CEOs are also struggling to deal with the rise of artificial intelligence (AI) and its application to business processes, the potential for abuse and labor rights issues in their supply chains, and a growing number of barriers to their companies’ decarbonization efforts. For instance:
Nearly all of those surveyed (99%) said they are either using or considering the use of AI in their supply chains, with 82% saying they are planning new initiatives this year;
More than 60% said they are concerned about the potential for human or labor rights issues in their supply chains;
And virtually all (99%) said they face barriers to decarbonization, with 30% pointing to the complexity of the work required as the biggest barrier.
Those are big issues to contend with, so it’s no surprise that 96% of the CEOs Proxima surveyed said they are dedicating equal (41%) or more time (55%) to supply chain issues this year than last year. And changing economic conditions are adding to the complexity, according to the report.
“As inflation fell throughout last year, there were glimmers of markets stabilizing,” the authors wrote. “The reality, though, has been that global market dynamics are shifting. With no clear-set position for them to land in, CEOs must continue to navigate their organizations through an ever-changing landscape. Just 4% of CEOs foresee the amount of time spent on supply chain-related topics decreasing in the year ahead.”
Simon Geale, executive vice president and chief procurement officer at Proxima, added some perspective.
“It’s fair to say that the complexities of global supply chains continue to have CEOs around the world scratching their heads,” he wrote. “The results of this year’s Barometer show that business leaders are spending more and more time tackling supply chain challenges, reflecting the multiple challenges to address.”
Perhaps the extra focus on supply chain issues will help organizations improve their ability to roll with the punches and overcome resiliency challenges in the year ahead. Only time will tell.
Investing in artificial intelligence (AI) is a top priority for supply chain leaders as they develop their organization’s technology roadmap, according to data from research and consulting firm Gartner.
AI—including machine learning—and Generative AI (GenAI) ranked as the top two priorities for digital supply chain investments globally among more than 400 supply chain leaders surveyed earlier this year. But key differences apply regionally and by job responsibility, according to the research.
Twenty percent of the survey’s respondents said they are prioritizing investments in traditional AI—which analyzes data, identifies patterns, and makes predictions. Virtual assistants like Siri and Alexa are common examples. Slightly less (17%) said they are prioritizing investments in GenAI, which takes the process a step further by learning patterns and using them to generate text, images, and so forth. OpenAI’s ChatGPT is the most common example.
Despite that overall focus, AI lagged as a priority in Western Europe, where connected industry objectives remain paramount, according to Gartner. The survey also found that business-led roles are much less enthusiastic than their IT counterparts when it comes to prioritizing the technology.
“While enthusiasm for both traditional AI and GenAI remain high on an absolute level within supply chain, the prioritization varies greatly between different roles, geographies, and industries,” Michael Dominy, VP analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results. “European respondents were more likely to prioritize technologies that align with Industry 4.0 objectives, such as smart manufacturing. In addition to region differences, certain industries prioritize specific use cases, such as robotics or machine learning, which are currently viewed as more pragmatic investments than GenAI.”
The survey also found that:
Twenty-six percent of North American respondents identified AI, including machine learning, as their top priority, compared to 14% of Western Europeans.
Fourteen percent of Western European respondents identified robots in manufacturing as their top choice compared to just 1% of North American respondents.
Geographical variances generally correlated with industry-specific priorities; regions with a higher proportion of manufacturing respondents were less likely to select AI or GenAI as a top digital priority.
Digging deeper into job responsibilities, just 12% of respondents with business-focused roles indicated GenAI as a top priority, compared to 28% of IT roles. The data may indicate that GenAI use cases are perceived as less tangible and directly tied to core supply chain processes, according to Gartner.
“Business-led roles are traditionally more comfortable with prioritizing established technologies, and the survey data suggests that these business-led roles still question whether GenAI can deliver an adequate return on investment,” said Dominy. “However, multiple industries including retail, industrial manufacturers and high-tech manufacturers have already made GenAI their top investment priority.”