Hanmi was looking for an automated solution for item-level tagging to gain greater visibility and maximum tracibility through the supply chain.
The RFID solution delivers:
- Improved accuracy and efficiency of shipping process
- Cost and error reduction
- Decreased manual labor
- Increased management control over order and shipping status
Hanmi’s products are dispersed amongst hundreds of pharmacies throughout South Korea. Prior to their adoption of RFID it was difficult for the manufacturer to have much visibility over store inventory levels at any given time. In order to know when products needed to be replenished, Hanmi had to rely on manual, labor-intensive stock taking at each pharmacy, a process which was neither frequent nor 100% accurate. Hanmi needed more accurate, real time stock level information to improve circulation throughout their supply chain and chose RFID for the solution.
RFID not only solves Hanmi’s circulation challenges, it meets government mandates and improves health safety throughout the country. In South Korea, the pharmaceutical industry struggles with the illegal production and sale of counterfeit and substandard drugs. Because the country is only able to recover around 20% of these illicit pharmaceutical products, the Korean government recommended RFID to combat this growing and dangerous problem, mandating that 50% of all pharmaceutical products be RFID tagged by 2015.
As one of the country’s leading pharmaceutical providers, Hanmi needed to integrate RFID technology into its complex assortment of products, while maintaining the high speed and performance level of its packaging line systems. Item level tagging throughout the pharmaceutical supply chain, which would call for over 60 million RFID tags annually, had never been tried at this scale before. In order to implement the intricate application, Hanmi needed to find RFID tags that would function on all 500 types of its products, which are packaged in a variety of shapes, sizes, and materials. Hanmi also had to consider the internal contents of the products, some of which include liquid and metal, substances that typically negatively affect RFID system performance. Hanmi selected LS Industrial Systems (LSIS), the leading Korean RFID solution provider, and Impinj’s UHF RFID technology for the solution.
How It Works
In order to ensure a stable supply of large quantities of tags, Hanmi selected LSIS as their complete RFID hardware solution provider. LSIS has worked with Impinj since 2004 and introduced Hanmi to Impinj’s superior RFID technology. The team worked closely for over a year to completely implement RFID item level tagging into Hanmi’s supply chain.
Hanmi sought to tag every pharmaceutical item they produced with as few tag designs as possible, while still maintaining reliable read rates. The Impinj Monzatag chip was chosen for use in two types of passive UHF Gen2 RFID tags: a Linear tag and Impinj-designed Satellite tag. These two designs offered the best read rates at an affordable price.
Upon deciding to use only two tag designs, Hanmi was faced with the challenge of fitting one of these two tags on all of their numerous products. While the Satellite tag was small and could fit on all items, its read range was shorter than that of the Linear tag, which could only fit on large items. Hanmi and LSIS did many tests to determine the ideal tag for each type of product.
To overcome the challenge of metal foil wrap inside paper cut boxes, Hanmi patented a design which minimizes the interference from metal. Inside a paper cut box, they sectioned off a small area where the Linear tag is separated from the foil packaging.
The next step for Hanmi was to integrate RFID functions and encoding capabilities into existing packaging lines, while maintaining system performance of 150-200 tags per minute. Impinj’s high speed encoding software, the LSIS Xcode UHF High Performance reader, which is based on Impinj’s Speedway reader, allowed them to meet the speed and reliability requirements.
For paper cut boxes, items pass through a two section encoder. In the first section, items are encoded with the country code, vendor code, product code and serialization number. Items then pass through the second section, to check for encoding errors. If no errors are found, they move on.
A similar manufacturing line is used for plastic medicine bottles. A bottle going through a packaging line is affixed with an RFID tag, then the medicine label is affixed over the tag, and the tag is encoded. At the end of the line, there is a check to verify that the RFID tag is correctly reading the bottle’s contents.
After items are encoded, they are transferred from the automated warehouse to the shipping department, where contents are manually picked and packed into cartons to be shipped to pharmacies. The cartons are pre-encoded with an RFID tag, which contains the order information, and are then run through the shipment verifier, a conveyor belt installed with a reader and Impinj’s Guardwall antennas. The tags on each item and the carton are read, and if all tags match the order information, the carton is verified and proceeds to the dispatch process.
At local pharmacies, store employees use LSIS handheld readers, powered by Impinj’s Indy® reader chips, to take inventory. That information is wirelessly transmitted into Hanmi’s central information server. This data provides valuable visibility of inventory and sale levels.
Hanmi successfully implemented RFID throughout its entire supply chain in December 2010.
Item-level tagging of Hanmi’s products has streamlined their operations and provided greater visibility and maximum traceability throughout the pharmaceutical supply chain.
At the warehouse level, Hanmi has greatly reduced shipment error rate, because they are able to verify the contents of boxes before they are sent out. Once products reach pharmacies, the RFID solution greatly improves store inventory management processes, reducing out of stocks and allowing sales representatives to spend less time taking inventory and more time providing customer service. Hanmi and pharmacies are also able to manage expiration dates of products on the shelves, while preventing the sale of counterfeit medications, and increasing consumer safety. Improved inventory visibility from item level tagging also enables efficient return of recalled items, meaning less time those items are on shelves.
The RFID system also provides insights into Hanmi’s sales by product, region, and season. This increases Hanmi’s ability to forecast the demand for products, allowing them to more efficiently supply materials and replenish inventories when needed.
Hanmi Pharmaceutical, a subsidiary of Hanmi Group, is a Korean manufacturer and supplier of pharmaceutical products in over 40 countries around the world. Founded in 1973, Hanmi is a leading pharmaceutical company in South Korea, with annual revenue of $558 million in 2008.