Systems Engineering Perspective of e-pedigree Systems

Transcription

1 information (shown in dotted blue), and then feed the necessary data into the DPMS application. It is to be noted that the business events and process operations such as packing, shipping and receiving (shown in dotted blue lines and circles) are the primary source of the EPCIS event information. Once the pedigree source data is received, the Pedigree system generates the electronic DPMS Pedigree which can be electronically transmitted through secure and authenticated means of communication between the supply chain partners/stakeholders. The pedigree workflow is initiated by the creation of the manufacturer s pedigree document, which is then sent to the wholesaler in the DPMS message format. Upon receipt of the pedigree information, the wholesaler appends the pedigree document with the receipt information, thereby creating the nested data structure. During this process, the Pedigree application also notifies (shown in dotted blue bi-directional arrow) the EPCIS system, which records the business event of shipment-receipt. As the product moves from the wholesaler to the retailer, the DPMS message is sent from the pedigree application at the wholesaler s end to the retailer s end. The pedigree document is updated in a nested fashion, using the capture application information or the EPCIS event information. Model B, thus relies on DPMS message for pedigree regulatory compliance while supporting and enabling internal integration with EPCIS capabilities for non-pedigree compliance purposes. Similar to Model A, the pedigree workflow requires trading partners to establish a means of transport mechanism. The transport is through point-to-point connection using standard protocols of AS2, FTP, HTTP(s), fax and . AS2 is the recommended standard for DPMS messaging. Thus Model B provides pedigree workflow without any message conversion between trading partners. The EPCIS to DPMS and DPMS to EPCIS conversion is performed within the trading partner s infrastructure. This system also enables the use of EPCIS for serialized product tracking and other business purposes unrelated to pedigree compliance Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

2 Figure 4-12 Architectural standard - Model B DPMS + EPCIS (interoperability) Model C Model C represents a step-up in complexity. In the Model C system, the pedigree information can be transported either in the form of a DPMS pedigree or EPCIS data message. (Recall in Model B that pedigrees were only sent using DPMS). As illustrated in Figure 4-13, the pharmaceutical manufacturer has both DPMS and EPCIS based application within its pedigree infrastructure. The manufacturer can initiate the pedigree workflow in one of two ways. 1) EPCIS event based initiation The EPCIS event information (shown in dotted blue) is received by EPCIS application (shown in red). EPCIS application can either transmit the EPCIS event information to the wholesaler, thereby sending the pedigree information wrapped in an EPCIS event message. 2) Pedigree data based (non-epcis) initiation On the other hand, the manufacturer can also create the Pedigree document model using the capture data itself (shown in orange). As in Model B, the Pedigree application can receive the event information from EPCIS or directly receive the pedigree raw data from the capture application. The electronic pedigree is then transmitted to the wholesaler s infrastructure. Once the pedigree information has been sent to the Wholesaler, the wholesaler updates its system. This might happen in several ways, and this represents the complexity of this approach. If the 4-56 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

3 message has been sent using DPMS, then the wholesaler must then either update the DPMS pedigree using a DPMS application or update the wholesale EPCIS system with a receiving event. On the other hand, if the message has been sent using EPCIS event information, then the updated EPCIS event information would be stored in the EPCIS repository wholesaler or it might need to be deconstructed to feed a DPMS application if there were a need to generate DPMS based pedigree for downstream trading partners. EPCIS event EPCIS event EPCIS EPCIS EPCIS OR OR Capture Application Pedigree DPMS message Pedigree Capture Application DPMS message Pedigree Capture Application Manufacturer Wholesaler Retailer/Hospital Figure 4-13 Architectural standard - Model C 1 Figure 4-14 depicts a scenario where the manufacturer has a Pedigree application within its infrastructure, and sends a DPMS message only to the Wholesaler. The Wholesaler in turn, has the infrastructural capability to send either DPMS message or EPCIS event information to the downstream trading partner, namely the retailer/hospital. Figure 4-15 illustrates a scenario where the retailer has a DPMS only application within its infrastructure. The manufacturer and the wholesaler both have the capability to send DPMS or EPCIS events for pedigree flow through the trading partners. This model thus provides pedigree compliance flexibility when trading partners across the supply chain have a combination of DPMS and/or EPCIS capabilities. As with other models, trading partners need to set-up agreement and make decisions on each connection. The data transmission between partners can be based on DPMS protocols of AS2, FTP, HTTP(s) and fax, whereas the EPCIS events are bound to SOAP/HTTP, XML/HTTP + TLS (HTTPs), XML/Message queues Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

4 EPCIS events EPCIS EPCIS OR Capture Application Pedigree DPMS message Pedigree Capture Application DPMS message Pedigree Capture Application Manufacturer Wholesaler Retailer/Hospital Figure 4-14 Architectural standard - Model C 2 EPCIS event EPCIS OR EPCIS Capture Application Pedigree DPMS message Pedigree Capture Application DPMS message Pedigree Capture Application Manufacturer Wholesaler Retailer/Hospital Figure 4-15 Architectural standard - Model C Model D (EPCIS only) Since EPCIS based systems have all necessary business event information stored in the repository, the operational data can be used to send pedigree information. The EPCIS events are not mapped to any DPMS message structure. Manufacturer s business operations such as production, packing and shipping lead to generation of EPCIS events. Event like shipping is send to the wholesaler and then subsequent shipping from the wholesaler to retailer also generates EPCIS relevant information. Thus Model D relies entirely on EPCIS events for pedigree regulatory compliance without any dependency on DPMS capabilities. This model also requires point-to-point connectivity between 4-58 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

5 trading partners and decision for each connection. The standard protocols for transport include SOAP/HTTP, XML/AS2, XML/HTTP, XML/HTTP + TLS (HTTPs), and XML/Message queues. The biggest assumption made is that EPCIS events satisfy pedigree requirements from a regulatory standpoint. EPCIS data EPCIS data EPCIS EPCIS EPCIS EPC Query EPC Query Capture Application Capture Application Capture Application Manufacturer Wholesaler Retailer/Hospital Figure 4-16 Architectural standard - Model D As shown in Figure 4-16, the manufacturer initiates the pedigree workflow by sending EPCIS event information to the wholesaler. The wholesaler upon receipt of the shipment, modifies its own EPC- IS repository, and after the shipment is made, the change is reflected in the EPCIS event data Summary of Models The following table () summarizes the pedigree compliance models A through D. The table highlights some of the high level distinguishing factors and also some of the common standards (protocols) to be adopted for data transmission. Table 4-8 Summary of pedigree architecture standards Message Format Data Transmission (Trading Partner connectivity) Data Transmission (Protocols) 4-59 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

6 Model A: DPMS only DPMS Point-to-Point connectivity between trading partners AS2, HTTP, FTP, fax and . Model B: EPCIS with DPMS (integration) DPMS Point-to-Point connectivity between trading partners AS2, HTTP, FTP, fax and . Model C: EPCIS and DPMS (interoperability) Model D: EPCIS only DPMS or EPCIS events EPCIS events Point-to-Point connectivity between trading partners Point-to-Point connectivity between trading partners EPCIS event protocols: SOAP/HTTP, XML/AS2, XML/HTTP, XML/HTTP + TLS(HTTPs), and XML/Message queues DPMS protocols:as2, FTP, HTTP(s), fax, SOAP/HTTP, XML/AS2, XML/HTTP, XML/HTTP + TLS(HTTPs), and XML/Message queues Technical Challenges EPCIS events are operational steps in a pharmaceutical supply chain. These events are typically generated when there is a change in ownership of the drugs or there is any internal product handling event. Pedigree data on the other hand, tracks change of ownership. Additional events need to be added to capture change of ownership in the absence of any physical handling, and events that do not lead to any change in ownership should be excluded from the pedigree information for an item. Thus there are changes that need to be made to the EPCIS event and systems for pedigree compliance. Pedigree laws require particular data elements to be included in the pedigree document. This includes the drug information, license information, timestamps etc. Some of these fields can be readily retrieved from the EPCIS events, while others require creation of standards and extension of fields. Thus it can be inferred that creating DPMS from EPCIS events requires standardization rules, and investment to ensure that systems comply to the new set of standards Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

7 Business Challenges Duplication of systems If EPCIS and DPMS systems co-exist, then the supply chain stakeholders have to maintain two different kind of systems within their infrastructure. This leads to increased costs of operations, maintenance and upgrading of the systems Critique of Model D EPCIS-only (audit needs) EPCIS only approach leads to issues in audits, investigations and other use-cases that require scrutiny of pedigree data. This becomes a difficult process, since the Pedigree document is always created from EPCIS events, and must be assembled whenever there is a need for the document Based on the above, and per our research of (SupplyScape, 2008), out of the Models under question, EPCIS only poses various issues over DPMS only. However the combination of EPCIS and DPMS based model, where EPCIS is used for serialized item tracking and trace, and DPMS for pedigree information provides a lucrative option as compared to the separate world options of DPMS only and EPCIS only. A loosely coupled paradigm of EPCIS and DPMS would provide a model for integration of the business processes as well. In view of this, Model B becomes a lucrative option. Model C, which aims at attaining full interoperability across the supply chain, has very high needs of standardization of interfaces. This is a time consuming process, and adoption of this model, would significantly hamper the industry s quest for implementation of e-pedigree systems across the United States and the globe. The following section lists the standards and their statuses per the industry s position on the roadmap for e-pedigree compliance model adoption. Also shown in Table 4-9 is the traceability of the models and the requirements they satisfy Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

8 Table 4-9 Architectural models and requirements traceability matrix Development Status of Standards The following matrix (Table 4-10) presents the status for key attributes of the four models described above. This table is helpful in evaluation of the model options for the e-pedigree solutions being suggested by various providers. As can be seen in the table, Models C and D have many standards which have not been established or ratified (shaded in red). This process will take considerable time and lessens the likelihood of their implementation in the near term. Additionally, standards that have been implemented are shaded in green, and items in progress have been shaded with yellow. From our analysis, design discussions and meetings with stakeholders of the pharmaceutical industry, Model C is almost impossible to implement to comply with pedigree regulations. This is due to the complexity of the interfaces that need to be developed for implementation of EPCIS- DPMS and DPMS-EPCIS handshakes. At this time Model D is unlikely because it requires all participants in the supply Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

9 Table 4-10 Development status of standards Model A: DPMS only Model B: EPCIS with DPMS (integration) Model C: EPCIS and DPMS (interoperability) Model D: EPCIS only Alignment with GS1 product and location identifiers Not Established Not Established Not Established Standards Established Compliance with GS1 XML methodologies Mapping of DPMS into EPCIS events Not Established Not applicable Not Established Not Established Standards Established In Progress In Progress Not applicable Definition of EPCIS event to transport DPMS message Not applicable Not applicable No Standards Established Not applicable Interface between EPCIS and DPMS systems Not applicable No Standards Established No Standards Established Not applicable Pedigree contents (i.e. full history, one up-one down, distributed, etc.) Standards Established Standards Established No Standards Established No Standards Established Pedigree data storage Standards Established Standards Established No Standards Established No Standards Established Security Model Standards Established Standards Established No Standards Established No Standards Established Exception Handling No Standards Established No Standards Established No Standards Established No Standards Established 4-63 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

10 Chapter 5 Systems Architecture: Portfolio of Options Before we delve into the portfolio of architectural options available, let s discuss the fundamentals of enterprise architecture pertaining to the supply chain industry. The past few years has seen emergence of layered approach to implement enterprise class supply chain applications and systems. Tiered architecture separates the business logic, presentation components and the persistence layer of an application. Within an enterprise, layers are used to provide ease of scalability, maintainability and robustness of the overall information architecture. From experience, it is also know that any kind of architectural implementation has impact on 1) Enterprise 7 Processes 2) Enterprise Systems 3) Enterprise Infrastructure 4) Edge 8 Processes 5) Edge Systems 6) Edge Infrastructure. To recognize the right architecture and solution for the industry, the above viewpoints were considered for defining the architecture, and also in the cost-benefit analysis, more on which has been covered in Chapter Chapter 6. From experience, it could be state that architectures that are solution vendor neutral and not proprietary in nature can be easily scaled up, and has been traditionally less costly in the long run. This kind of architecture can also use the best building blocks available for implementation of the overall system. In an effort to recommend the best architectural approach to meet the requirements of e-pedigree, and prevent counterfeiting, we took this neutral vendor approach, and constructed a portfolio of architectural options. All architectures are based on serialization of the items, cases and pallets of drug shipments. In addition to this, some of the architectures satisfy the legislative e- Pedigree requirements, and some satisfy both e-pedigree and data sharing requirements. Table 5-1 Architecture options serialization based Serialization standards Based Model # E-Pedigree/Data Sharing Standards Serialization Technology 0 (ZERO) No e-pedigree standard Bar-code (or any other data carrier) As listed in Table 5-1, Model 0 (ZERO) does not follow any e-pedigree or data sharing standards. It is purely based on serialization standards, with either of the data carrier options, RFID or barcode. Models listed in Table 5-2, on the other hand, are also technology neutral, and can be based on 7 Manufacturers, wholesalers, distributors and pharmacies are enterprises of the chain. 8 Edge is usually termed as remote locations, material repositories of enterprises. An enterprise may have multiple edge locations 5-64 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

11 either bar code or RFID. However they also satisfy either DPMS or EPCIS based e-pedigree standards. Model A and Model D are based on one of the standards, whereas Models D and C are based on a combination of standards. Table 5-2 Architecture options serialization + e-pedigree standards based Model # Standards Serialization Technology A DPMS Technology Neutral B DPMS + EPCIS integration Technology Neutral C DPMS and EPCIS interoperability Technology Neutral D EPCIS Technology Neutral 5.1 Model ZERO (0) A typical architectural implementation of Model ZERO is shown below in Figure 5-1. Figure 5-1 Architecture - Model ZERO 5-65 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

12 The flow of material starts with the manufacturer, and reaches the end point of distribution when it reaches the point of check-out or point of dispensing. This is ideally the pharmacy chain or the hospital pharmacy. The material under question, namely the item or the case of drugs is tagged with either barcode or RFID. The tags carry the serialized unique identifier, along with minimal product information. At the point of check out, the pharmacy scans the serialized identification number, and sends the identification number back to the manufacture s web service through the internet or enterprise system through EDI channels or through a centralized repository maintained by a third party. The identification number is sent through a secured connection, either through https or through authenticated link between the trading partners, which does not provide the counterfeiters an opportunity to tap the information electronically. The result received from the repository/service maintained at the manufacturer s end or through the decryption of the number itself is binary in nature, and tells the pharmacy if the drug is authentic or not. This kind of validation has other use-cases as well, whereby customers can validate the information through their cell phones or through a browser based connection, irrespective of their location. 5.2 Model A Table 5-2 lists the architectural options for implementation of e-pedigree based systems. As shown in Figure 5-4, the material flow of pharmaceutical drugs happens through the supply chain, starting from the echelon manufacturer to the pharmacy. As discussed in the Chapter Chapter 5, e-pedigree root is create at the manufacturer s enterprise information system, and as the product moves downstream, the pedigree get encapsulated with additional stakeholder, shipment and receipt information of the drug. A more detailed view of the system architecture implementation, within an enterprise, is depicted in Figure 5-2. The architecture is an extension of the RFID system described in Figure 4-3. E-Pedigree based application is integrated with the middle layer of the system. The RFID tag or barcode based production identification information is received from the physical layer, and after necessary filtering and event control of the data, the data is persisted in the repository. A detailed flow is also depicted in Figure 5-3. The application interface or the integration module, extracts the data from the store, and converts the information to xml format. This is then sent to the DPMS pedigree application, which is responsible for storing the xml form of the e-pedigree, and also for transmission of the xml document to the enterprise applications of downstream. DPMS application has its own repository which stores XML documents. Model A based DPMS architectures interact with other enterprise architectures through EDI based point-to-point 5-66 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

13 connectivity. It is independent of the physical layer technology, and compliant to the e-pedigree laws. All stakeholders of the supply chain are involved, which includes the distributors as well. Also, this kind of architecture requires all stakeholders to implement Model A based DPMS architecture, to ensure that e-pedigree document could be sent from one stakeholder to another. Figure 5-2 Model A - first level architecture 5-67 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

14 Figure 5-3 Model A - Middle layer architecture 5-68 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

15 Figure 5-4 Model A - flow 5.3 Model D Before we look at the architectures that are integration of the DPMS and EPCIS standards, let us review the EPCIS based Model D architectural implementation. Similar to Model A, the material flow of the product happens from the manufacturer to the pharmacy through the supply chain distributors and wholesalers. Shipping of drugs, or selling/buying of the product leads to creation of EPCIS event based data. This data is stored in the repositories maintained at each stakeholder s enterprise location, both at the edge and at the enterprise/data center nodes. This EPCIS event data forms the basis for creation of e-pedigree. However, unlike DPMS standards, the pedigree is created using EPCIS standards. This architecture could be extended to provide information sharing at the supply chain level, through implementation of ONS and sharing standards. Extensibility of the architecture could provide tracking ability to find the position of the product, anywhere on the globe Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

16 Figure 5-5 Model D - first level architecture EPCIS based e-pedigree creation was made plausible through the EPCIS/DPMS application interfaces and standards, but does not satisfy the Ca BOP requirements. Like all other architectures, EPCIS based Model D is serialization technology neutral. The key benefit of the EPCIS based application is that it provides the option to benefit from the data-sharing and real time tracking of the products. Figure 5-6 shows the detailed architecture of the Model D implementation. EPCIS application comprises of the database, ONS interfaces at local enterprise level, and an EPCIS Query interface implementation which form the building blocks of enterprise and global supply chain sharing architecture Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

17 Figure 5-6 Model D - Middle layer architecture Figure 5-7 Model D - middle layer architecture 5.4 Model C A typical Model C architecture has been shown in Figure 5-8. The middle layer comprises of both DPMS and EPCIS based implementations. Interfaces are implemented that provide DPMS and EPCIS bridge. As a result of the duality of the implementations., this kind of architect. The goal of such an implementation would be provide interoperability across the supply chain, where some stakeholders may have Model D based EPCIS implementation, and some may have Model A, i.e. DPMS based implementations. Due to the additional requirement of interfaces, this architecture provides complexity of implementation. Also, many of the standards have not been implemented, and thus the industry is very far from deployment or adoption of such technological architecture. Figure 5-9 shows the architectural implementation of the both EPCIS and DPMS based applications Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

18 Figure 5-8 Model C - first level architecture 5-72 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

19 Figure 5-9 Model C middle layer architecture 5.5 Model B As shown in Figure 5-10, the middle layer architecture of Model B is very similar to the Model C implementation. However Model B middle layer implementation does not comprise of a two-way EPCIS and DPMS based bridge interface. Only EPCIS based data is used to create DPMS xml e- pedigree documents. DPMS based e-pedigree could also be directly created using the tag data retrieved through the capturing application. Due to the single way bridge between the EPCIS and DPMS applications, the model does not provide full interoperability of the architecture. According to the industry experts, the possibility of Model C implementation and adoption is remote, and Model B could be the architecture implemented by the pharmaceutical supply chain industry Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

20 Figure 5-10 Model B - middle layer architecture 5.6 Conclusion In this chapter we have reviewed the architectural options available for securing the pharmaceutical supply chain. The next step is to review the cost implications of the technologies involved, and then strategize on the approach to be taken by pharmaceutical manufactures in particular, and the industry as a whole Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

21 Chapter 6 Cost Analysis 6.1 Overview In Chapter Chapter 4 (Technology: Building Block Solutions and Standards) and Chapter Chapter 5 (Systems Architecture: Portfolio of Options), we have reviewed technology and architectural solutions that meet the e-pedigree requirements and lay the foundation for an integrated supply chain system. Information technology (IT) and data sharing can lead to effective supply chain management, and provide IT as an enabler, spanning the entire enterprise and beyond, encompassing manufacturers, distributors and retailers. Before firms reap the benefits of IT as an enabler, they need to decide the technology adoption strategy. According to (Berger), technology adoption is based on cost analysis, robustness of technology and scalability and usability needs. In fact, many managers base a significant portion of their decision making process on the cost analysis, and if available, the cost effectiveness of the options. To this note, this chapter provides a cost analysis of the technology options that we have discussed so far. We look at some of the cost and benefit considerations of the technologies and architectures involved. This would equip us to strategize a technology recommendation for the industry and the problem at hand. We will look at the unit costs of the technology building blocks, namely RFID and bar codes, and Digital Mass Serialization and Digital Mass Encryption. We will also try to ascertain the benefits of the building blocks and understand the impact of the technology at an enterprise level, and also at the supply chain, multiple echelon level. Conclusions from multiple stakeholder level cost and benefit analysis will be instrumental in strategic recommendations. 6.2 Technology Cost Comparison Serialization is a fundamental element of all architectural options, and also Bar code and RFID are some of the possible data carrier options available for serialization. This is something that we have reviewed in the previous chapters. Now, let us first understand and compare the cost and benefits of RFID and bar-code based serialization implementations RFID and Bar Code Cost Much has been written and reported about the industry s dilemma to proceed with RFID or barcode based data carrier options. While some industry analysts have talked about the benefits of RFID technologies, others have pointed out the issues of cost, and integration. RFID system 6-75 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

22 implementation requires investment in middleware, system integration with Warehouse Management Systems (WMS) and tags and readers. Tag costs are a running cost for RFID based implementation, and can amount to a lot of money if there is significantly high volume of products involved. In the year , MIT Auto Id center said it would create an RFID tag prototype that would cost 5 cents. Till date, RFID tag costs are higher than 5 cents, and thus the adoption of the technology continues to be inhibited due to high cost numbers. However in some industries, other than pharmaceutical, some applications of RFID deliver benefits even if the cost of the tag is as much as $1 or more. Since pharmaceutical industry s needs are to tag products at the item/package level, high volume makes tag cost a key factor. Figure 6-1 RFID Market: Tag Prices (world) (source: Frost and Sullivan) As shown in Figure 6-1, the industry has been moving towards the 5cent tag price, which would make RFID an attractive investment. According to (Frost and Sullivan, 2006), prospects of RFIG tag price reaching 5 cents, has given hopes for increase in applications of the technology to high volume industries like pharmaceutical in particular, postage and labeling of media content and packaging. Table 6-1 Market Restraints in order of impact (Europe), Rank Restraint 1-2 Years 3-4 Years 5-7 Years 1 Perceived Cost Barrier High Medium Low/Med Source: Frost and Sullivan Report European Radio Frequency Identification Tags Markets 6-76 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

23 2 Time taken to convert pilots to full scale deployments High Med/High Low 3 Installed base of alternate technologies Med/High Low/Med Low/Med 4 Business integration requirements Med/High Low/Med Low/Med 5 Slow adoption of EPC tags Med/High Low Low 6 Technical Issues Med/High Low/Med Low 7 Unsuccessful Implementations Low/Med Low Low 8 Issues related to IP rights and royalty payments Low/Med Low Low Also, according to (Frost and Sullivan, 2006), companies are delaying RFID implementations due to perceived cost barriers. This is illustrated in Table 6-1, which lists the market restraints in the order of impact. Companies have also delayed implementations due to the time taken to convert pilot projects to full scale deployments. Also according to (Frost and Sullivan, 2006), passive tags though beneficial from a business process standpoint, are not cost-effective. Addition of technology options like RFID based encryption will also lead to increase in deployment costs, and operating costs on a continuous basis. Thus to counter the effect of high cost RFID systems, quantification or at least qualification of the benefits becomes essential. While there is some marketing literature pointing to the benefits of the tags, there is not much literature on a comprehensive return of investment (ROI) calculation of RFID or bar code. Also, papers that have been written do not consider the integrated supply chain cost impact, or benefits impact. Now, let us take a quick comparison of data carrier cost comparison for the two different carrier option strategies covered in Chapter 4. The assumptions made for the rough cost comparison are listed in Table 6-2. Table 6-2 Data carrier options - cost assumptions RFID tag cost $0.07 Cost can range from 7c to 15c and upwards. Bar Code cost $0.01 Barcode cost is roughly 1c Worker cost ($/hr) $12.50/hr Operator cost is ~ $20/hr [salary of warehouse worker = $25K per year] Items per case 100 Assumption 6-77 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

24 Cases per pallet 20 Assumption Items per pallet 2000 Assumption Also, based o n the survey data collected, the typical pallets shipped for some of the manufacturers were nearly 290 pallets/month. Now, as mentioned in Chapter 3 and Chapter 4, there are 3 different types of data carrier option strategies available 1) RFID based serialization at item, case and pallet levels 2) RFID on case and pallet levels, and Barcode on item level. 3) Bar code at item, case and pallet levels. Table 6-3 lists the cost comparison of the three options available. Clearly RFID at all levels is nearly 4 times as expensive as the other two options. For RFID at all levels to be a viable option, the benefits associated with the implementation of the technology, should cover the cost differential, else it would not be a recommended technology from a cost standpoint. Table 6-3 Data-carrier options - cost comparison Cost RFID on case, pallet, barcode on items Bar code on all RFID on all Pallet data carrier cost $0.04 $0.01 $0.04 Case data carrier cost $0.80 $0.20 $0.80 Item data carrier cost $20.00 $20.00 $80.00 Total data carrier cost increase/pallet $20.84 $20.21 $ Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

25 The next few sections detail an integral approach of technology assessment. According to (Singh), a holistic approach to measure the cost and benefit impact of RFID or any tagging technology would not only look at the process impact on an enterprise, but also evaluate the overall supply chain cost and benefits associated with the technology adoption. Also according to (Singh), various reports published by corporate entities like IBM, A.T.Kearney and Frost and Sullivan do not provide a comprehensive solution to the problem of ROI measurement. The author evaluates all options for tagging RFID to fulfill the famous Walmart mandate. The options are then evaluated for their cost and benefit components. What follows now is a similar approach of first identifying the processes that are impacted due to the technology adoption, and then defining those processes to be able to measure the benefits related to RFID. The benefit associated with each process has been quantified to the extent possible. Market and research based data have been used to aid the quantification process. Table 6-4 lists some of the benefits as identified at each echelon in the supply chain. For simplicity only 3 level echelon systems has been considered. The benefits can be categorized as labor benefits, inventory visibility and resulting cost reduction, and improved fulfillment benefits for the manufacturers (Singh). According to Table 6-3, the cost of RFID tags /pallet is $80.84 whereas cost of barcode/pallet is only $ These numbers do not include the hardware cost for RFID and barcode, or any kind of middleware and software and integration services. For RFID investment to be more attractive, the extra cost of the tags and the cost of the reader/hardware should be offset by the benefits of RFID, i.e. the benefits reaped by the business processes and the entire supply chain. Table 6-4 lists some of these high level business process benefits. Table 6-4 General RFID benefits Factory Manufacturer Finished goods warehouse Wholesale Distributor Pharmacy Automatic generation data sent to financial and inventory management systems Low Labor costs for receiving, picking, storing and shipping. Improved customer service due to reduced out-of-stock Reduced labor costs in receiving, shipping, storing. Inventory optimization Reduced theft rate Inventory optimization Reduced theft rate

26 Technologies and architectures that have been reviewed in Chapter 4 and Chapter 5, has been further broken down into options, for which the cost and benefit could be easily ascertained. In Table 6-5, the options have been identified in a manner to allow incremental implementation of the technology. Table 6-5 Options for cost analysis Cost Model Description Option Number 1 RFID based serialization and middleware technologies 2 Bar code based serialization 3 ZERO Digital Mass Serialization (manufacture retailer model) 4 ZERO Digital Mass Encryption (manufacture retailer model) 5 A DPMS based e-pedigree system (RFID or bar code based) 6 D EPCIS based e-pedigree system (RFID or bar code based) 7 B and C EPCIS and DPMS based e-pedigree system (RFID or bar code based) The following section now delineates the processes and quantifies or qualifies the benefits associated with the processes Process for Cost-Benefit Analysis Following describes the methodology adopted to provide a holistic cost benefit analysis. Let Technology options be denoted by. Let Acquisition cost (non-recurring) be denoted by. Let Recurring cost be denoted by. Let the processes, either business or supply chain, be denoted by Let benefits of a technology be denoted by B i for a technology can be defined as. (1) = cost increase of the process, p j and is the benefit increase of p j due to technology, T i. Let Net Benefit of a technology be Net Benefit NB i = AC I +NPV (RC I -. If the benefits are calculated over a period of time T (say 5 years), then NB I,T =..(2) 6-80 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

27 Using this approach, let us calculate the cost implications of RFID and bar-code based systems that DO not satisfy any e-pedigree needs Cost Analysis Based on the survey, as mentioned earlier in this chapter, the volume of pallets per month being shipped out of the manufacturer s warehouse is 290. Now we need to determine the volume of the pallets at the distributor s end. To keep the calculations simple, only a single distribution center is being considered. Note that a distributor can own more than one distribution center. Volume at Distribution Center Measurement of the distributor volume is critical, as the distribution center has high volume of products that are picked and shipped on a regular basis. According to Table 6-6, the average number of invoice lines per day = 23,955 and the selling units per invoice line = 3.5. Therefore the daily and the resulting monthly number of selling units can be calculated. Table Distribution Center Product Picking Profile: 2007 Percent of distribution centers using automated picking methods: (%) 13% Of those using automation, percent of facility's invoice lines picked by automated methods Average (%) Median (%) 43% 41% Invoice lines picked: Average (#) Median (#) Distribution Center Responses (#) Invoice lines picked per day 23,955 22, Selling units picked per invoice line Selling units processed per day 58,292 39, Source: Center for Healthcare Supply Chain Research 6-81 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

28 Table 6-7 lists the RFID and bar code acquisition costs and the recurring costs on an annual basis. RFID cost for the manufacturer is to the tune of $1M dollars for the first year. The annual recurring cost is nearly $700K per year. For a single distributor center, the first year s cost is $610K, whereas the recurring annual cost is $210K. The primary driver for the difference in the numbers is the tag cost.

29 Table 6-7 RFID and Bar Code Cost comparison MANUFACTURER DISTRIBUTOR Option # RFID on Bar Code on RFID on Bar Code on Count RFID on all pallet/case all Count RFID on all pallet/case all ACQUISITION COST Cost Elements Hardware Cost Reader gates 4 $ 40,000 $ 40, $ 40,000 $ 40,000 0 Hand-held readers 4 $ 7,356 $ 7,356 $3,516 8 $ 14,712 $ 14,712 $ 14,712 Middleware Hardware 1 $ 50,000 $ 50,000 $ 50,000 1 $ 50,000 $ 50,000 $ 50,000 Total Hardware Cost $ 97,356 $ 97,356 $ 53,516 $ 104,712 $ 104,712 $ 64,712 Information Technology Middleware 1 $ 200,000 $ 200,000 $ - 1 $ 200,000 $ 200,000 $ - Integration Services (integration to WMS) 1 $ 100,000 $ 100,000 $ - 1 $ 100,000 $ 100,000 $ - Total IT Cost $ 300,000 $ 300,000 $ - $ 300,000 $ 300,000 $ - RECURRING COST Tag/Code Cost Volume of Pallets/month 290 $ 20 $ 20 $ 3 1,258 $ - $ - $ - Cases/month 5,800 $ 406 $ 406 $ 58 25,152 $ - $ - $ - Items/month 580,000 $ 40,600 $ 5,800 $ 5,800 2,515,226 $ - $ - $ - monthly cost $ 41,026 $ 6,226 $ 5,861 $ - $ - $ - Annual Tag/code Cost $ 492,316 $ 74,716 $ 70,331 $ - $ - $ - Hardware Maintenance cost (15%) $ 14,603 $ 14,603 $ 8,027 $ 15,707 $ 15,707 $ 9,707 IT Maintenance Cost (15%) $ 45,000 $ 45,000 $ - $ 45,000 $ 45,000 $ - Internal Team Cost of Internal RFID team assigned 2 $ 150,000 $ 150, $ 150,000 $ 150,000 0 FIRST YEAR Cost $ 1,099,275 $ 681,675 $ 131,874 $ 615,419 $ 615,419 $ 74,419 Annual Recurring Cost $ 701,919 $ 284,319 $ 78,358 $ 210,707 $ 210,707 $ 9,707

30 Process Analysis Now let s review the processes that are affected by RFID/bar-code based implementations. Figure 6-2 lists the business process view (using BPMN notation) of material shipment from manufacturer to a distributor. The manufacturing plant produces drugs, which are moved to the packaging line. The packaging line is used to tag the item/case/pallet using bar code or RFID printer. The line can also use smart printers for printing both RFID and barcode on to the product package. The picking process is used to form load units, which may be stored in the manufacturer inventory or prepared for immediate shipment. Transportation carriers then ship the pallet to the Distributor. At the docking unit of the distributor, the pallets are unloaded, unpacked and prepared for storage in the warehouse or readied for Cross Docking to the retailers. Figure 6-2 Supply Chain Process View (Manufacturer-Distributor) Manufacturing Production Packaging Form Load Unit Shipment Transportation + Picking Store in Warehouse Distribution Cross Docking Store in distributor s warehouse Shipping Transportation + UnPacking Packing Assuming that RFID (Cost option 1 from Table 6-5) is implemented at manufacturer and distributor locations, the business process would undergo changes, and hardware and software will have to be deployed. Let s review some of the key processes. Picking The process of picking cases and pallets from the warehouse of the manufacture or a distributor is termed as the picking process. It holds high importance, as it is directly related to downstream customer s satisfaction. According to (Inventoryops), the time required for picking a

31 case or a pallet depends on picking strategies like wave picking, zone picking, basic order picking and batch picking. The activity involves high amount of manual labor and has an impact on the logistics cost and the service level provided to the customer. According to (Ustundag & Tanyas), the picking cost is $0.06, which is also confirmed by using the an average picking time of 12 seconds, and assuming a labor rate of $15/hr, the picking cost equates to $0.06/pick. Also per a sample data provide in (Ustundag & Tanyas), the cost benefit realized due to RFID is 40%. Therefore the benefit equates to $0.06 X 0.40 = $0.024 Receiving The process of receiving cases and pallets at the distribution center is called receiving. According to (Ustundag & Tanyas), typical receiving cost in a supply chain industry (retail) is $0.015/item. Also per the sample data provided in (Ustundag & Tanyas), the benefit realized due to RFID is 50%. Therefore the benefit equates to $0.015 X 0.50 = $ per product item received, be it pallet or case. We use this information in our benefit analysis. Put-away Put away is the process of putting away the received items in temporary or permanent storage in a warehouse. According to (Ustundag & Tanyas), typical put-away cost in a supply chain industry (retail) is $0.030/item. Also per the sample data provided in (Ustundag & Tanyas), the benefit realized due to RFID is 30%. Therefore the benefit equates to $0.030 X 0.30 = $ per product item received, be it pallet or case. We use this information in our benefit analysis. Shipping Shipping is the process of loading the RFID items on the shipment truck/container. This process is a consequence of the order picking process. According to (Ustundag & Tanyas), typical shipping cost in a supply chain industry (retail) is $0.030/item. Also per the sample data provided in (Ustundag & Tanyas), the benefit realized due to RFID is 50%. Therefore the benefit equates to $0.030 X 0.50 = $ per product item received, be it pallet or case. We use this information in our benefit analysis. Inventory Counting Often inventory counts are not aligned to the actual physical inventory, and to ensure that the system and physical inventories are balance, counting process is carried out at regular intervals. According to (Ustundag & Tanyas), typical shipping cost in a supply chain industry (retail) is $0.015/item. Also per the sample data provided in (Ustundag & Tanyas), the benefit realized due to 6-85 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

32 RFID is 90%. Therefore the benefit equates to $0.030 X 0.90 = $ per product item received, be it pallet or case. We use this information in our benefit analysis. Figure 6-3 Manufacture-Distributor Process View (with RFID) Manufacturing reader Production Packaging Form Load Unit Shipment Transportation reader + Picking reader Store in Warehouse reader Distribution Receiving Cross Docking Shipping reader reader reader Put-away Store in distributor s warehouse reader Transportation + reader UnPacking Picking reader Packing Source: adapted from Process diagram in RFID for the optimization of Business Processes by Wolf-Ruediger Hansen Considering the benefits listed due to the process efficiencies, the impact on the distributor and the manufacturer has been quantified. Table 6-8 Process benefits comparisontable 6-8 lists the benefits for the stakeholders Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

33 Table 6-8 Process benefits comparison Labor Benefits MANUFACTURER DISTRIBUTOR Production reporting at the end of production line Packaging $ - $ - $ - $ - $ - $ - Receiving $ - $ - $ - $ 19, $ $ - Put-away $ 5, $ $ - $ 22, $ $ - Storage Inventory Counting $ 8, $ $ - $ 36, $ $ - Order Picking $ 13, $ $ - $ 60, $ $ - Shipping $ 8, $ $ - $ 38, $ $ - Total Process Annual Benefit $ 436, $ 4, $ - $ 2,119, $ 22, $ - A significant impact of RFID is on the inventory levels, and the lead time for ordering. The next section details some of the inventory benefits Inventory Benefits RFID provides benefits to the inventory of warehouses and retailers in the supply chain. Inventories at all levels in the supply chain are exposed to theft and damage. According to (Atali, Lee, & Ozer, 2005), inventory discrepancies can occur due to the following reasons 1) Shrinkage, which could be due to theft of goods, and leads to higher system inventory than the physical inventory. System inventory is the inventory count in a warehouse management system or an inventory management system, whereas physical inventory is the count of the actual items in the warehouse or the distribution center or at the retailer. 2) Misplacement of goods, which is due to incorrect placement of the goods in the warehouse. This could lead to incorrect system inventory, as the misplaced items are not available. 3) Transaction errors, which could due to incorrect scanning of products, at check out or during scanning of products at the warehouse itself. All the above mentioned inventory discrepancies requires inventory managers to maintain a higher inventory level, beyond what is needed to maintain the safety stock level, or the restock level. Also, the correction to the system inventory is made through inventory audits, at regular intervals of time. Introduction of automatic identification of products and items, through RFID or other means of technology leads to reduction in errors, and also reduces the frequency of inspection audits, thereby saving inventory holding costs and labor costs related to inspection. Let us review the benefits related to inventory. Out of Stock 6-87 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

34 According to (Simchi-Levi, Kaminsky, & Simchi-Levi, 2008), inventory stock depends on demand and the lead time. Both these factors are exposed to variability. To ensure that a desired service level is maintained, which means that the customer demand is filled at the rate of the service level, say 90%, inventory managers maintain a safety stock. If demand is not met, then it means that the inventory stock is less than the safety stock. According to (Accenture), the RFID deployment leads to reduced out-of-stock situations, and has the potential to increase revenue by 2%. According to Appendix 4:Distribution Center Sales, the median sales for a single distribution center is $1, 195,492,000. This allows us to calculate the out-of stock sales benefit as $1, 195,492,000 X 2% = $23.9M. According to Appendix 3: Distributors Order Fulfillment, the service level maintained by distributor is 97% for the year This means 3% of the demand is not filled. It is also given that in 2007, the percent of sales that was not filled is 2%. 12% out of the loss of order fulfillment was due to distributor out of stock. Assuming that this out of stock does not occur after RFID deployment, the benefit could be calculated as 2% X $1, 195,492,000 X 12% = $2,869,181, nearly $2.87M. The benefit calculated according to the second method is more realistic and will be considered for the cost model. The benefit for the distributor is due to high volume, and is much higher than the benefit reaped by the manufacturer. The Inventory benefits again shifts the benefits scale in favor of distributors. 6.3 Conclusion From the cost and process analysis it could be easily inferred that: As compared to bar code implementation, RFID s acquisition costs are much higher Process benefits due to RFID make it an attractive option for both manufacturer and distributor. Inventory benefits due to RFID implementation shifts the benefits scale in favor of the distributor. The above mentioned deductions require further research analysis using spreadsheet and simulation models. Also a real options based analysis would help in determining the right strategy Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

35 Chapter 7 Adoption Strategy and Recommendation Even while the research project was going on, the California Board of Pharmacy decided to delay the implementation of e-pedigree laws. The new implementation date for the manufacturers is 1/1/2015 for 50% of the products manufactured. A date of 1/1/2016 has been set for creation of e- Pedigree for all products manufactured. Figure 7-1 shows the timeline in detail. Figure 7-1 e-pedigree Timeline Due to the extension of California s deadline, industry now has more time to analyze the architectures and await the standardization of the interfaces of architectural implementations. The issues of standardization have been dealt with, in Chapter Chapter 4. Now, even though the corporations are not on the hook for DPMS and/or EPCIS based implementations, they have to consider the fundamental problem of counterfeiting and consider measures for rectification of the problem. In addition to tightening of vigilance measures by both the industry and the regulators, a technological system like DMS or DME could help with the cause. Both DMS and DME are very cost-effective forms of implementations of the architecture, and will provide a huge customer base for validation of the authenticity of the drug itself. Serialization using barcode would allow the industry to keep the costs low, and still reap the benefits of encryption or database verification technologies to deter the act of counterfeiting. This kind of a model does not require any deployment within the infrastructure of the distributor. Distributors would still be 7-89 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

36 interested in deployment of RFID based technologies to help with their inventory cost reduction. The author agrees with the sentiment expressed by the distributor, and from the cost benefit analysis performed, it is obvious that if manufacturing expends millions of dollars to pay for tagging costs, related to RFID in particular, then the distributors would be the ones who would benefit the most. Figure 7-2 (adapted from HDMA report) shows the staged approach of implementation of the pedigree and data sharing systems. Stage I should comprise of serialization measures, and should be geared towards e-pedigree deployments. As part of Stage I, manufacturers should implement the DMS or the DME model, also termed as MODEL ZERO. Stage II would allow the manufacturers, distributors and pharmacies to adopt the data sharing mechanisms, typically through Model B architecture. Stage III would utilize the benefits of the Object Naming Service interfaces, and the EPCIS applications to gear up for global and national supply chain visibility. It is however to be noted, that a comprehensive cost benefit analysis of the Stage II and Stage III options need to be performed before the systems are adopted. This could be a ground for furthering the research performed on this topic. Figure 7-2 Staged approach implementation 7-90 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

37 Chapter 8 Conclusions and Future Work In the research work performed to write the thesis material, requirement gathering of e-pedigree was carried out and a technology architecture portfolio was created. Legislative requirements mandated by the Federal and national agencies, industry responses to the FDA dockets issues on this topic, and other materials presented by industry leaders were reviewed thoroughly. Basic technology options were researched through research journals, Auto ID reports, and also books written on RFID and barcode based systems. The author s experience with enterprise architectures was used to model the options available for adoption. During the cost benefit analysis, it was realized that there is not much literature on the quantification of the benefits of the RFID based systems. Research papers have been written to consider the benefits of RFID on a single business process, say picking. Only a single research paper considers the entire supply chain impact of RFID. There is no real option based cost analysis that has been performed for the issue at hand. As future work, real options analysis of the architectural options would provide a better decision making tool for researchers, chief information officers, and mangers. RFID based systems are truly beneficial due to their reduced labor cost effect, and inventory benefits. The benefits as outlined in the Cost analysis chapter can be due to reduced inventory holding time, reduced variance in lead times, reduction in lead time itself, and other benefits leading to higher accuracy of the business processes involved in the supply chain. The material provided in the thesis, and the research done by the author, could pave the path for research journal articles on cost benefit and impact analysis of the systems, using NPV or more importantly the Real Options approach Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

38 Bibliography David H. Williams. (2004, 07 29). Retrieved 5 5, 2009, from Accenture. (n.d.). RFID: The Pharmaceutical Industry's Newest Remedy. Retrieved 05 21, 2009, from Accenture: C1C1CAB3C308/0/rfid_pharmaceuticals.pdf Acsis - Implementing the epedigree Plan. (n.d.). Retrieved 05 05, 2009, from Acsis - Implementing the epedigree Plan: Alien Technology. (n.d.). Alien Technology. Retrieved from Alien Technology: Atali, A., Lee, H., & Ozer, O. (2005). Vaue of RFID under imperfect inventory information. Working Paper Stanford University. Berger, P. I. (n.d.). Technology Based Business Transformation - Lecture Presentations. Center for Healthcare Supply Chain Research. ( ) HDMA FACTBOOK. HDMA. Center for Healthcare Supply Chain Research. (2009). Rules of Engagement. Center for Healthcare Supply Chain Research. Confederation of Indian Industries (CII). (n.d.). CII Technology documents. Retrieved 05 05, 2009, from Confederation of Indian Industries (CII): Crawley, E. (n.d.). Lectures of System Architecture. Retrieved from ESD.34 web site. Dartmouth Case Study. (n.d.). Retrieved from Dartmouth Case Study - Woolworths Chips: EPCGlobal. (n.d.). EPCGlobal - DPMS standard - v1.0. Retrieved 05 06, 2009, from EPCGlobal - DPMS standard - v1.0: pdf EPCglobal. (2007, January 05). Pedigree Ratified Standard. Retrieved July 25, 2008, from EPCglobal: EPCGlobal-EPCIS-1.0 Standard. (n.d.). EPCGlobal-EPCIS-1.0 Standard. (EPCGlobal) Retrieved 05 05, 2009, from EPCGlobalInc. (n.d.). framework pdf. Retrieved 11 04, 2008, from 8-92 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

39 Food and Drug Administration. (2009). FDA Counterfeiting Initiatives. U.S. Food and Drug Administration. Frost and Sullivan. (2006). European Radio Frequency Identification Tags Markets. Frost and Sullivan. Frost and Sullivan. (2006). World RFID Markets - Investment Analysis and Growth Opportunities. Frost and Sullivan. GS1. (n.d.). GS1 Barcode types. Retrieved 05 07, 2009, from GS1: GS1. (2009). GS1 DataBar Technical Brief. GS1. GS1-Barcode. (n.d.). GS1-Barcode Technical Overview. Retrieved 05 05, 2009, from GS1: GS1-DataMatrix. (n.d.). GS1-DataMatrix. Retrieved from GS1-DataMatrix: GS1-GTIN. (n.d.). GS1-GTIN Executive Summary. Retrieved 05 05, 2009, from GS1.org: Health Strategies Consultancy LLC. (2009). Understanding the U.S Commercial Pharmaceutical Supply Chain. (n.d.). Retrieved from Huang, D., Verma, M., Ramachandran, A., & Zhou, Z. (2009). A Distributed e-pedigree Architecture. Inventoryops. (n.d.). Inventoryops. Retrieved 05 15, 2009, from Inventoryops-Picking Information: Kok, A. d., Donselaar, K. v., & Woensel, v. T. (n.d.). A Break-even Analysis of RFID Technology for Inventory sensitive to Shrinkage. Retrieved from Laran RFID. (2004). RFID Basics. Laran. Matheson, B. (n.d.). H. R bill. Retrieved May 02, 2009, from Safeguarding America's Pharmaceutical Act of 2008: Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

40 Motorola. (n.d.). Motorola Business Products - RFID. Retrieved 05 15, 2009, from Motorola Business Products - RFID: cuments/static%20files/shrinking_the_supply_chain_expands_the_return_new.pdf Motorola. (n.d.). Retrieved 05 05, 2009, from Motorola Business Solutions: ons/documents/static%20flies/cs_megatrux_1007.pdf RFIDJournal. (n.d.). RFIDJournal - ROI on RFID. Retrieved 05 05, 2009, from RFIDJournal - ROI on RFID: Schmidt, T., & Follert, G. (2008). Dynamics in Logistics. In T. Schmidt, & G. Follert, Analysis of Decentral Order-picking Control Concepts. Springer Berlin Heidelberg. Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain. McGraw-Hill Irwin. Singh, K. D. (n.d.). Options for Wal-mart suppliers and an Evaluation Methodology. SupplyScape. (2008, January 11). Retrieved July 31, 2008, from SupplyScape: Ustundag, A., & Tanyas, M. The impacts of RFID technology on supply chain costs. Part E 45 ( ). Weck, P. O. (n.d.). Systems Engineeering Lecture Presentations. White, S. A. (2005, 12 08). OMG - BPMN Fundamentals. Retrieved 05 05, 2009, from OMG: Stephen A. White 8-94 Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

41 Appendix 1: E-Pedigree Use-cases for the Supply Chain Following is a list of all the pedigree use-cases as identified in EPCglobal Pedigree Standard document. (EPCglobal, 2007) Creation of pedigrees by a manufacturer before the first wholesale distribution Creation of pedigrees by the first wholesaler, including the transaction information for the first wholesale distribution Creation of pedigrees by repackagers for repackaged items that include pedigree information from source items. Adding outbound transaction information to pedigrees as part of a sales, transfer or return transaction. Adding certification (signature) to pedigrees, signing the transaction information added, and all prior content. Adding item serial number to pedigrees (if a wholesaler serializes a non-serialized item) Adding manual authentication information (for example, invoice, shipping document) to pedigrees to facilitate downstream manual authentication. Adding receipt information and recipient signature to pedigrees, signing this information and all prior content. Creating a pedigree for an individual item. Creating a pedigree for a repackaged item, and including pedigree information for one or more parent items. Creating a pedigree for an item that has a unique serial number. Creating a pedigree for an item that does not have a serial number. Creating a singular pedigree for each saleable item. Creating an aggregate pedigree for a collection of saleable items that share the same product information (NDC and multiple lots) and prior chain of custody. Creating an electronic pedigree from a paper pedigree or alternate form, and embedding a copy of the original pedigree in the electronic format Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

42 Including attachments to a pedigree, such as scanned and EDI representations of invoices or shipping documents to satisfy regulatory manual authentication requirements. Accommodating additional data elements in an extensible manner as regulatory requirements evolve. Displaying all pedigree regulatory information in the pedigree (for example, drug product information, distributor information, recipient information, transaction information, receiving information, digital signatures) Representation of pedigrees in a portable format that can be transmitted electronically or via media. Including container information (for example, relationship of products to cases) in addition to the pedigrees in the pedigree envelope. Exchange of pedigrees between trading partners using existing business data transfer mechanisms (for example, EDIINT AS2). Exchange using a peer-to-peer model. Electronic verification of each prior signature on the pedigree. Electronic verification that the original, previously-signed content of the pedigree was unchanged since it was signed. Attaching copies of manual authentication documents (for example, invoice, shipping document) with an electronic pedigree to facilitate self-authenticating pedigrees Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

43 Appendix 2: Requirements Survey for Pharmaceutical Manufacturers of Biologics based drugs. [Please note that the images of the survey have been used purely for formatting reasons. Word document of the survey could have been attached, but the author preferred the images] Ankur Sinha, Systems Design and Management (SDM), M I T May 2009

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