ARC's New RFID Systems in the Manufacturing Supply Chain Study Released Pharmaceuticals - The...

DEDHAM, Mass. -- Use of passive RFID (Radio Frequency Identification) tags for product tracking is one of the major issues in today's manufacturing supply chain. Many RFID tag and reader manufacturers are already part of the gold rush surrounding the Wal-Mart, US Department of Defense, and other

mandates, while numerous CPG, food, beverage, and other manufacturers who supply these customers continue to struggle to justify the use of RFID on their products. Pharmaceuticals, however, possess many characteristics that make RFID an attractive solution for manufacturers, and ARC believes this segment could represent another potential RFID gold rush after the original mandates take flight. (www.arcweb.com/res/rfid)

The RFID Value Proposition for Pharmaceuticals

Tracking and tracing capabilities are vital to pharmaceutical manufacturers for a variety of reasons, many of them regulatory. These increasingly necessary capabilities can be used to track pedigree or facilitate product recalls or other actions that necessitate the ability to track the product through the channel. RFID is particularly well-suited to one of the regulatory issues currently looming, anti-counterfeiting, and the US FDA has already recommended that RFID be part of a layered approach to counterfeit prevention that includes RFID, tamper-proof packaging, bar codes, and other forms of security such as hidden inks.

While the early portions of the FDA timeline stress cases and pallets, by late 2007 it is likely that most item-level pharmaceuticals will be tagged as well. Chantal Polsonetti, ARC Vice President and author of the just issued report RFID Systems in the Manufacturing Supply Chain, explains: "The RFID market potential in pharmaceuticals is huge, with over 12 billion units as candidates for item-level tagging in the United States alone. Unlike the experience with retailer-driven mandates whose business value is distributed unequally throughout the supply chain, pharmaceutical manufacturers can easily justify using passive tags all the way down to the item level on the basis of tracking and tracing requirements. Pharmaceuticals also have a higher price tag and margin relative to retail products that could only accommodate item-level tagging at a tag price of five cents or less. "

ARC's analysis of the market for RFID Systems in the Manufacturing Supply Chain recognizes the profound pull inherent in this truly (customer) demand-driven, supply chain phenomenon, plus the counterbalancing effects of passive RFID's technological shortcomings, current lack of interoperability across vendor products, and continued struggle by manufacturers to arrive at an internal business case. The report provides strategic information including RFID tag, reader, and other hardware market size and potential, leading suppliers, key factors that contribute to market growth, market dynamics, and strategic issues that suppliers will face.

Note to Editors: This document can be used with attribution to ARC Advisory Group. For a graphic containing "Total Market for RFID Systems in the Manufacturing Supply Chain", please contact mailto:press@arcweb.com .

Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. No matter how complex your business issues, our analysts have the expert industry knowledge and first-hand experience to help find the best answer. ARC's presence is global with offices in North America, Europe, Asia and now including China. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax 781-471-1100, E-mail info@arcweb.com, Web www.arcweb.com.