European Convocation on RFID

Transcription

1 European Convocation on RFID Mike Rose Vice President Johnson & Johnson Tom Aelbrecht Technology Manager Johnson & Johnson

2 Agenda Business Overview RFID/EPC Program Innovation Research Challenges

3 Business Overview World s s most comprehensive, and broadly based manufacturer of healthcare products $53.3B Net Trade Sales in 2006 Approximately 122,000 employees More than 200 operating companies Selling products throughout the world Major business segments Consumer Medical Devices & Diagnostics Medicines & Nutritionals

4 >> Medicines & Nutritionals >> Medical Devices & Diagnostics >> Consumer

5 Johnson & Johnson Credo Guides Our Actions The Four Tenets Customers Employees Community Shareholders

6 RFID/EPC Program

7 RFID Vision Johnson & Johnson will be a leader in the appropriate use of RFID technology to develop innovative products and business solutions that improve the quality, safety, and efficiency of healthcare delivery.

8 RFID/EPC Strategy Johnson & Johnson will be a leader in the appropriate use of RFID technology to develop innovative products and business solutions that improve the quality, safety, and efficiency of healthcare delivery. OBJECTIVES Healthcare Delivery Innovation Supply Chain Efficiencies Brand Protection Product Innovation RFID Leadership GOALS Improve Patient Safety Improve Supply Chain Efficiencies Reduce counterfeiting and diversion incidents Develop new RFID enabled products & services J&J recognized as as industry RFID leader

9 Program Highlights Consumer

10 In the beginning. Tagged Product is Re-Palletized & Shrink-Wrapped Read Point Outbound Dock Door Tagged Product is Loaded onto Trailer

11 Promotion Execution Pilot Consumer

12 RFID Promotion Observations Compliance lower than anticipated Backroom dwell time is low (~1 day) Early execution was unexpected With RFID, can proactively set replenishment levels rather than waiting for Out Of Stocks for action Ability to better calculate sell thru Real time information on the exact dates promotions are at retail Uncovering additional opportunities

13 First Aid Kit: RFID Daily Data Visibility at multiple points can lead to increased sales and reduction in cuts 1 2 Mean StDev Comparison of When the Store Rec'd the Display vs. Store Effective Date Normal # of Displays Average POS Sales # of Days Before or After Event Date that Display was Rec'd /15 3/27 Mean: -7.4 Store Effective Date: 4/1/06 N 211 With RFID visibility, we could have prompted Can reorder see when at stores displays who took display were received down early at Backroom Variable Reorder No Reorder ~$1.2 million retail sales 4/9 4/22 5/5 opportunity Average Daily POS for Stores that Set and had Box Crucher reads before 4/1 Stores with reorders vs. no reorders 5/18 Date 5/31 6/13 6/26 7/9 # of Days Before or After the Store Effective Date that the Display was Set # of Displays Can see when displays went to sales floor 0 have realized early 0 execution Day Display was Set in Relation to Event Date 3 # of POS Units Sold Mean StDev N Mean: -3.6 Store Effective Date: 4/1/06 With RFID visibility, we could here to prevent Out of Stocks ~75% of Displays Set Early Histogram of POS Units Sold by Day 4/ Day (in relation to store effective date) Began cutting due to early execution; Customer thought product supply issue

14 Program Highlights Medicines & Nutritionals

15 Counterfeiting A Key Challenge Counterfeit drugs (according to WHO): <1% in developed world >30% in some parts of the developing world >50% from rogue internet sites In 2000 FDA opened 6 cases; In 2006 opened 53 Increasingly sophisticated methods Lack of focus on product authenticity in some countries Many potential entry points No track & trace systems

16 Technology Solutions Multifaceted layered approach Track and trace solutions Bar code and RFID Electronic product codes Serialization unique identifier numbers Pedigrees using a uniform code

17 RFID Proof of Concept Flip Off Seals with Identity Goal Evaluate incorporating 13.56MHz tags into flip-caps and safety closure seals Scope Development consortium of 8 partners Exclusive In Mold Label (IML) Technology modified to accommodate RFID tags Outcomes Technology feasible RF effects on biologicals?

18 Program Highlights Medical Devices & Diagnostics

19 Tracking Use of Instruments and Consumables

20 Tracking Equipment in a Hospital

21 RFID enabled inventory cabinet - France Business Value Better replenishment of stents Reduced out of stock, increased revenue Faster invoicing Reduce # of FTE s required to execute onsite inventory management. Stent inventory management system Now Future 21

22 Innovation

23 RFID Research Laboratory Established in 2003 Locations - Beerse, Belgium and Raritan, NJ Center of excellence across operating units Investigate leading edge technologies Evaluate impacts to business processes Leverage learning s s across decentralized units

24 RFID Incubator Fund Established in 2004 Stimulate RFID-enabled innovation Co-funding model Enriches RFID knowledge base Enhances community of practice

25 Research Challenges

26 Creating Value Why should a consumer care about RFID? How do we create value for the consumer? Once we have all this event data, what do we do with it? How do we create business value? How do we redesign our processes to use this information?

27 Technology Research Areas RFID deployment vs. infrastructure implementation Reduce tag cost and complexity. Low cost tags, Printable tags, etc. Convergence of RFID with other wireless protocols to leverage existing wireless infrastructure Reducing the complexity of RF application to liquid and metals HF vs. UHF discussion in item level tagging RF effects on biological products

28 Healthcare Research Areas How do we address the challenges associated with healthcare? What areas are ripe? What are not? How do we deploy a "common" infrastructure across a very diverse industry? Why should patients care about RFID? What are the incentives for various supply chain parties to deploy RFID?

29 Close Encouraged by promotional displays results Exciting new opportunities for RFID enabled services and products Standards are important for broad adoption Continuing research investment is critical to advancing RFID

30 Questions?