Argentine pharmaceutical distributors use RFID to achieve 40% profit growth
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Argentine drug distributor Axxa Pharma claims that since 18 months ago, the company’s drug warehouse in Buenos Aires adopted RFID technology, corporate profits have increased by 40%. Axxa Pharma attributes this profit growth to the adoption of the RFID system.
Axxa was established three years ago and its revenue has increased by 250% so far. The company claims that RFID helps the company cope with rapidly growing business needs by tracking the entire process of all kinds of medicine containers from reaching the warehouse to being sold to customers.
RFID has significantly increased the company’s profits and, more importantly, enhanced supply chain visibility, thereby improving product safety, said van Gelderen, executive director of Axxa Pharma. By tracking each bottle of medicine, the company ensures that warehouse medicine will not be illegally stolen, expired medicine will not be sold to customers, and identify whether it is sold at a low profit.
This system, van Gelderen said, “can improve consumer satisfaction because we can absolutely guarantee the traceability of the source of medicines and confirm that they have been professionally processed in our factory.”
Axxa Pharmacy was founded in Buenos Aires three years ago and is engaged in the distribution and wholesale of medicines. The medicines are sold to hospitals and pharmacies all over the country in Agenyan. Due to rapid business development, this summer, the company moved to a larger warehouse to handle large quantities of medicines.
Axxa Pharmacy has been looking for a set of RFID solutions to track the company’s regulated drugs. “Counterfeit drugs are rampant in the market,” van Gelderen said. “The drug supply chain is often artificially disrupted and mixed with fake drugs.”
Since drugs change hands many times before they are delivered to consumers, it is difficult to determine when counterfeit drugs have been mixed in. Axxa Pharmacy hopes to use RFID to provide electronic records, such as which drugs are provided by which suppliers, and the expiration time of the drugs. The company also wants to know that the medicine has not been stolen or manipulated to ensure that the company does not sell expired medicines. Ultimately, the company also hopes to provide suppliers and customers with this type of information to increase their trust in Axxa.
The program was installed in early 2009, provided by the software development company BDEV, and uses Alien Technology tags and readers. The system provides all the functions required by Axxa Pharma. In addition, the system can track pharmaceutical profits to ensure that they remain above the minimum level set by the company, said Mauro Crovato, BDEV’s technical manager.
At the beginning of the application, the company only labelled medicines priced at more than US$1,000, and then began to label all single-product medicines priced at more than US$500. Currently, the company labels all medicines priced at more than US$300.
When eligible new medicines arrive at the warehouse, they are transported directly to the receiving area; there, workers unpack the containers and attach an Alien Squiggle label to each medicine. Workers then use an Alien desktop reader to read the label and enter the drug-related data into the company’s back-end system, including the supplier, expiration date and price.
The reader sends the tag ID code to the BDEV software through the Wi-Fi connection, and the software corresponds the ID code to other data of the drug posted in the Axxa database. The medicines are then placed on storage racks in the warehouse. Axxa Pharma installed two RFID doors with Alien readers at the entrance and exit of the warehouse. If someone illegally takes the medicine from the shelf and takes it away from the warehouse, the reader will obtain the medicine ID code, display an alert on the software interface, and send a notification email to the relevant personnel.
When a customer places an order, the order is sent to the BDEV software, and the software prints a pickup slip. The employees retrieve the medicines needed according to the pick-up list, pack them in the box at the second RFID workbench, a desktop reader on the workbench reads the ID code of the label, and the BDEV software confirms that the medicines are prepared correctly. If there is a fast-expiring product in the prepared medicine, the software sends an alert to the relevant personnel.
The software also compares the purchase price of the drug with the price sold to customers to determine whether the profit level specified by Axxa Pharma is met. If the profit is low, the management will receive an alert. Then, the medicine box is sent to the logistics department of the warehouse, where the medicine is read again and loaded onto the truck, ready to be shipped to the customer. In this way, the system software updates the drug information again-supplementing the transportation time and destination.
In the next month, Axxa Pharma also plans to let customers obtain drug-related data through the BDEV software, such as the supplier of the drug, storage time in the warehouse, and transportation time. Customers can also enter the ID code printed on the front of the RFID tag on the Axxa Pharma website to obtain this information.
“The RFID system is the best management tool we have. There is no doubt that it helps the company guarantee profits,” van Gelderen said. “Every time a medicine with a substandard profit is ready to be shipped, my BlackBerry will receive a message. Since the medicine has not been delivered yet, the price can be adjusted immediately.”
According to van Gelderen, the company uses 2,000-3,000 labels every month.
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