[Judith Symonds, David Parry] Using RFID to Track (BookFi.org)(1)

8/10/2019 [Judith Symonds, David Parry] Using RFID to Track (BookFi.org)(1)

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Using RFID to Track andTrace High Value

Products: The Case of City

Healthcare

Judith A. SymondsDavid Parry

Idea Group Publishing


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Journal of Cases on Information Technology, 10(1), 1-13, January-March 2008 1

Copyright 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global

is prohibited.

EXECUTIVE SUMMARY

Certain businesses call for a high level of traceability to track high value products. This case study of City

Healthcare,1New Zealand, focuses on the complex management issues related to the initial decisions to use

radio frequency identication (RFID) technology on such a product, instead of a barcode. RFID devices

are effectively tiny memory storage devices that can be read and sometimes written to from a distance using

radio waves through an appropriate interrogation device. RFID devices have been touted as a replacement

for barcodes in supply-chain applications. Issues and challenges investigated here include the ability of

RFID to replace barcodes, business benet from technology investment, technology adoption, and the role

of external regulations in the adoption process.

Keywords: I managememt supply chain management radio frequency identication,I managememt supply chain management radio frequency identication,

ORGANIZATION BACKGROUNDCity Healthcare is a designer and manufacturer of healthcare devices. The factory is the only

production site for the organisation and overseas ofces are supported from here. Sales ofces

are located in Australia, U.S., UK, France, Germany, and India. All City Healthcare manufactur-ing line products are uniquely identiable using barcodes. RFID (radio frequency identication)

was not used anywhere in the factory at the time of the case study analysis although management

was aware that RFID tags could be used in place of barcodes.

City Healthcare entered the respiratory care market in 1971 with the development of aHealthcare entered the respiratory care market in 1971 with the development of a

respiratory humidier system for use in critical care. It has since developed humidication

technologies and now offers products for use in intensive care respiratory medicine, neonatal

care, operating rooms, and the treatment of obstructive sleep apnoea (OSA).

City Healthcare is the tenth biggest company on the New Zealand stock exchange and hasHealthcare is the tenth biggest company on the New Zealand stock exchange and has

830 staff in New Zealand. The company sells products to 90 markets in Europe, North America,The company sells products to 90 markets in Europe, North America,sells products to 90 markets in Europe, North America,

UK, Australia, and Asia, achieving sales of NZ million annually. million annually. million annually.

Using RFID to Track and Trace

High Value Products:The Case of City Healthcare

Judith A Symonds, Auckland University of Technology, New Zealand

David Parry, Auckland University of echnology, New Zealand


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2 Journal of Cases on Information Technology, 10(1), 1-13, January-March 2008


is prohibited.

City Healthcare spends around of its revenue on RD and consistently produces newHealthcare spends around of its revenue on RD and consistently produces new

lines and products. The company continually enhances its existing products and develops new,

related products, focuses on new medical applications for their technologies and expands their

sales network, with the focus on achieving a better patient outcome.

SETTING THE STAGEAs a much cheaper alternative and a requirement by many healthcare governing bodies, barcod-

ing still has precedence amongst healthcare companies over other technologies for identifying

products (Best, 005). RFID may be seen as a replacement for barcodes but manufacturers of

medical devices have a lot to consider when adopting RFID technology. Issues include standards,

cheaper alternatives, and regulations. For example, in the U.S., medical device manufacturers

must get third party approval from regulatory bodies such as the Food and Drug Administration2

(FDA) to allow them to sell their products. FDA requirements mainly include safety, quality,

and standardisation.

Having mastered barcoding technology, companies are in a position to consider the func-

tionality of RFID. In healthcare particularly, RFID is considered more suitable for locating

people and products than barcoding and has many potential advantages such as eld reading,

as opposed to line-of-sight reading. RFID devices can store more data than barcodes and some

RFID tags can have data written to them by the interrogator. There has been a great deal of

interest recently in the use of RFID in the supply chain (Singh Lai, 00), and a number of

major projects are underway.

Readiness for RFID in HealthcareMedical healthcare devices are often high value products manufactured in low volumes with sup-

porting processes that must comply with regulations. There could be catastrophic consequences

for a healthcare device manufacturer if a product was involved in a serious accident or otherbad publicity. Therefore, regulatory bodies require medical device manufacturers to individu-

ally label every product manufactured. Unique identication makes it possible to achieve full

traceability and archive test data records in the supply chain. All these factors can affect RFID

adoption in the industry and initially suggest that medical device manufacturers have the margins

and pressure from external actors to motivate them to invest in the technology (Brooke, 005).

Brooke (005) identied several aspects of the healthcare industry where RFID can be benecial,

including the ability to trace high value assets in the hospital and the ability to track assets over

time, thus verifying that certain procedures have been completed (in this case, decontamination

of surgical instruments).

Tracking and TracingThe supply chain is described by Christopher (005) as a network (supply chain network) where

different actors and functions are working together to control, manage, and improve the ow of

material and information from suppliers to end customers. The underlying philosophy behind the

supply chain is the logistic concept of planning and co-ordinating the ow of material through a

supply chain as a series of dependent activities within functions, with the overall aim of sending

the right product, to the right destination, at the right time.

Business has long recognised that the key to success of the supply chain is the use of in-

formation technology. Information technology has in many ways transformed the way different

actors in the supply chain can connect with each other. Information has always been central to

increasing supply chain efciency. Now, enabled by information technologies, the complex ow


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using RFID. They translate this time saving into an increased operational efciency for each stage

of the supply chain and provide lookup tables to allow managers to forecast cost savings from

the implementation of RFID. When compared to the barcode, vastly improved performance initem identication is the most attractive benet of RFID. Lee, Cheng, Leung (00) quantifyLee, Cheng, Leung (00) quantify

the indirect benets of RFID use within supply chains using a simulation model. They identify

inventory accuracy, more efcient shelf replenishment, and inventory visibility, resulting in an

improved supply chain ll rate.

RFID compared to the BarcodeRFID is often said to be an alternative to todays product barcodes. It may seem that the advan-

tages of using RFID are already accomplished by barcodes, but barcodes have limited capabilities

(Sarma, 00). Barcodes cannot identify individual product items; they only identify a product

group. Also, although barcode reading is much faster than manual reading, it still requires human

intervention and reads only one at a time. RFID can make operations more automatic and can

Figure 2. Data ow of RFID reading (Wang & Liu, 2005)

Control

commandsControl

Application

HF Interface

Antenna

Received

DataTransmitted

Data

tag

able 1. Benet analysis (Source: Garnkel & Rosenberg, 2005 Heinrich, 2005 Bose & Pal,

2005 Sarma, 2004)

Area Benefit

The RFID tag - small size

- uniquely identifiable

- memory capacity- reading range

- write capability

Non line-of-sight - penetrate material

- independent of tag orientation

- read multiple tags

- process improvements (speed up)

Better information - more information (frequent reading)

- accurate information

- end-to-end view(track trace)


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attach uniquely updateable information to the product that the information refers to. As a result, each

RFID tag will be read many more times during its lifetime compared to a barcode, which is used

mainly only at check out. Barcodes get much of the blame for the limitations in current business

processes by Lucket (00), who implies that business processes today are optimised as far as the

barcode will allow. Table summarises RFID disadvantages and barcode advantages.Lai Hutchinson (005) discuss some of the disadvantages of RFID in their study of RFID

adoption in China. The largest challenge for companies contemplating RFID implementation is

that of standards because it is not clear which will be chosen as an international standard. Mar-

kets that have no intellectual property rights to standards are required to pay a high price per unit

for standards patents. This has lead to nations like China choosing neither UID (unique ID) nor

EPC (electronic product code) and developing their own RFID standards. Another disadvantage

of RFID technology according to Lai Hutchinson (005) is the prohibitively high cost of tags

which is still as high as U.S. 0.30 per tag compared to the cost of barcodes at about U.S. 0.00

per label. Another challenge for Chinese companies according to Lai and Hutchinson (005) is

that in order to effectively use the information collected by RFID it must be connected to backend

systems such as ERP (enterprise resource planning), CRM (customer relationship management),

and DSS (decision support systems). This requires the presence of such systems and the ability of

management to use such systems. However, as reported by Jones, Clarke-Hill, Shears, Comfort,

and Hillier (00), many companies have difculty interrogating consumer buyer patterns and

consumer reward databases. A nal challenge according to Lai and Hutchinson (005) is that of

the security and privacy of systems. RFID has security problems of its own, which may serve to

aggravate information systems that are not adequately secure. As discussed by Ohkubo, Suuki,Ohkubo, Suuki,

and Kinoshita (005), if items are identied by a unique identication number, then a persons

physical movements can be tracked over a period of time. Tags can be killed after one use, but this

negates the advantages of using RFID tags. Ohkubo et al. (005) suggest that the likely solution

is encryption of the unique tag ID. As highlighted by Jones et al. (00), RFID tag read ranges

are currently limited to within a short range of the reader, and therefore, to achieve any accurate

surveillance there would have to be sensors placed everywhere. However, the technology is capable

of much longer read ranges and these are likely to be implemented in the future.

CASE DESCRIPTION

The scope of the case study was limited to the range of devices that provide continuous positive

airway pressure (CPAP) as well as a range of interface solutions, for the treatment of obstruc-

tive sleep apnoea (OSA), offered by City Healthcare. All applications in the series are portable

Disadvantages of RFID Advantages of Barcode

ROI (return on investment) uncertainty

Lack of universal standards

High cost of individual tags

High failure rate in reading in some environments

Obstructive materials interfere with reading

Privacy issues with info stored on tags

Mature technology and therefore less risky to implement

Low cost per product application

able 2. Disadvantages of RFID and advantages of barcode system (Source: Piasecki, 2005

Heinrich, 2005 Lucket, 2004 iStart, 2005 Staake, hiesse, & Fleisch, 2005 Gunther &

Spiekermann, 2005)


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and designed to be used by the patient in the home. Refer to Appendix A for an overview of the

management structure of City Healthcare. However, a general overview of the IT infrastructure

at City Healthcare is provided rst.

IT InfrastructureCity Healthcare has recently moved to a purpose-built factory premises and has installed a 10

Gbps ethernet telecommunications backbone. The main end-users are PC (personal computer)

based. The telecommunications network bandwidth allows for large CAD (computer aided

design) le transfers. In the future, City Healthcare intends to integrate a voice over IP (Internet

protocol) solution with the existing network infrastructure.

The Internal Supply Chain within the FactoryThe internal supply chain for the CPAP consists of a warehouse of raw material, a manufacturing

line (including four subassembly lines, a testing line, and a packaging stage), and a warehouse

of nished goods (Appendix B).

Before entering the testing line, the subassembly lines are integrated and the different

components are all assembled into a fully assembled CPAP. During the transformation stages in

the testing line, test runs are performed on a whole unit rather than checking each component,

as in the subassembly lines. In total, ve test runs are recorded during the manufacturing line,

one within the PCB subassembly line and four in the testing line (Appendix C). The test records

from these test runs are stored on a runcard (ve test runs in total, but four related to the testing

line). If the unit fails any of the tests, it must be sent back to the beginning of the manufactur-

ing line for rework. The operator is not allowed to retest the unit; therefore, the testing process

must be accurate.

After the testing line, the CPAP as well as the other features such as the breathing tube,

coming from the tube line, are all packaged together into a box in the packaging line. Theseboxes are loaded on pallets for delivery. The pallets are picked up by staff from the nished

goods warehouse, the nal function within the factory.

Runcard and BarcodesAt the beginning of the testing line, a piece of paper is attached to each individual CPAP and

this is known as a runcard (Appendix D). The runcard is a checklist which the operator signs

after each test run (Appendix E). For each test, the date that the test was run, the signature of

the operator, and a pass or fail result are recorded. The runcard is the quality record that com-

plies with regulations for accurate auditing and traceability and assures the customer that City

Healthcare products have been tested for quality control. The runcard is attached to the CPAP

throughout the whole testing line until the CPAP is loaded into the box and loaded on a pallet.In the packaging stage the runcard and the CPAP are separated. The runcard stays at the factory

and is stored at the manufacturing line for 10 years. The runcard must be able to be produced at

a later date as evidence verifying that a particular device passed all quality controls. A unique

barcode attached to the runcard and the CPAP is used to match test results once the device has

left the manufacturing line.

Appendix Fshows how the information about the product in the eld is traced back to the

runcard stored in the manufacturing line. Runcards must be kept for the duration of the life of the

product and therefore are stored indenitely. The cards are collected together and archived off-site

after the initial 0 year period. Runcards are not retrieved often, but when they are, there can be

difculty in locating the specic runcard in a timely manner. Tracing starts at the customer end

and goes back to the manufacturing line in order to nd the runcard for that specic product.


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Additional test data measurements from each test run are stored in each test machines own

information system. The test machines will produce a record for each individual test and store all

the test data measurements taken during the test. The information from the tests is stored in a at

le in a le directory and is identied by the name of the le. The four information systems for

the test machines in the testing line are not linked (see Appendix C). That is, when a unit entersa test machine, the machine has no knowledge of whether previous tests have been passed. This

is up to the operator who will check the runcard attached to the unit.

Three major requirements override everything else in the manufacturing line within City

Healthcare, to manufacture a product of quality, with processes that comply with regulations

(safety and efciency issues) and with full traceability. Obstructive sleep apnoea is a potentially

life-threatening disorder. It is important that products from City Healthcare are of a high quality

so the product will work properly in any circumstance. When it comes to healthcare products,

one incident related to safety for a medical product has the potential to damage the brand when

the risk endangers a persons life.

A certain level of quality for medical products is established by following criteria set by

regulatory bodies. Different markets are controlled by several regulatory bodies. The U.S. market

is important to City Healthcare. The regulatory body in the United States is the Food and Drug

Administration (FDA). Medical device manufacturers have to be approved by the FDA in order

to be allowed to sell medical products on the U.S. market. Regulations demand that certain

quality controls are conducted.

The regulations affect the processes in the manufacturing line within City Healthcare. When

asked about his work, the production manager mentions, among other things, making sure the

activities within the manufacturing line and throughout the supply chain comply with regulations.

One major concern he points out is the traceability requirement, he says:

Basically we (City Healthcare) have to document a lot of data that other companies might not

have to do, like full traceability of our products. From the raw materials right through the as-sembly line (manufacturing line), to stores, out to the customers.

As for any medical device manufacturer, City Healthcare must full the demands of regulatory

bodies concerning traceability and archive test data records for their products. The regulations also

set criteria for test machine design, validation processes, and for how complaints are investigated.

The FDA requirements for electronic records are summarised by Mercuri (003) as:

use validated equipment and computer systems

secure retention of records for instant analysis reconstruction

user-independent, computer generated, time-stamped audit trails system and data security, data integrity, and condentiality through authoried system ac-

cess

use of secure electronic signatures for open and closed systems and digital signatures for

open systems.

CURRENT CHALLENGES/PROBLEMS FACING THE

ORGANISATION

The manufacturing line stores test data from each test run in two places, on the runcard and in

separate information systems (see Appendix C). Test data needs to be stored in both places because

digital storage does not comply with regulations while the runcard does. At City Healthcare, there


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are two motivations to change the runcard system; increased efciency and integration of test

data storage. The production manager can see the potential time saved with every unit tested:

If we can nd ways of doing things faster, I guess ultimately, if we could get rid of that run

card well thats another 3 or 4 seconds that we save on every single unit, now, on every testruns faster.

Barcode technology currently enables the managers in City Healthcare to record the informa-

tion they need to be able to trace the serial number back to the manufacturing line, to be able to

nd the runcard for that specic product. The barcodes seem to full the purpose of traceability

requirements. There are two main reasons for City Healthcare to retain the current system; proven

reliability and the convenience of the runcard method.

However, there are three vulnerabilities in the current runcard system using barcode technology;

reading problems caused by poor reader alignment or printing problems, the lack of integration

of the test information systems, and the reliance on the operator to full their obligations. For

example, it is against quality regulations to test a unit twice. If a unit fails, it must be sent back

to service for rework. Compliance with such regulations is checked by internal quality ofcers

and external auditors. Each testing machine has two control lights; a green (pass) and a red light

(fail). The operator checks the light and lls in the runcard as appropriate. There is nothing to

say an operator will make the right call every time, everyday, when no electronic check is done.

However, as the unit passes each test, all the operators will check the runcard to verify that the

unit has passed the previous test.

RFID technology has the potential to enable automation of the runcard process. When the

researcher asked the production manager if RFID could improve the manufacturing line, he

said:

Id say yes, I would say the big one would be replacing or getting rid of the paper run cards,

that would be the biggest one.

However, there are a number of issues that would need to be addressed in an RFID enabled

system. These are: compliance with regulations, information requirements met by the current

system, the need for a reliable audit trail, usability for customers, difculties with digital au-

thentication, and usability of computerised systems within the factory. In particular, it would be

essential for the unique ID on the RFID to be secure, as it is important that information cannot

be modied by any actor in the supply chain. The signature on the runcard is also an important

aspect of the quality system and if the runcard became electronic, biometric authentication may

be needed as the security of password and swipe card systems can be breached simply by thesharing of codes or cards between operators.

Ultimately, innovation at City Healthcare is driven by customer demand (distributors and

retailers of healthcare products). Customers are not looking for RFID specically, but they are

looking for increased stock visibility.

City Healthcare has come to a standstill in their investigation of RFID and its potential

benets for their business. It is obvious that they need to take stock of the issues and develop a

plan for a way forward. But which way next?

The most obvious alternative to introducing RFID is changing the use of the current infor-

mation system to enable the run card data to be stored there. However, this is more risky from

a data integrity point of view, as the data will only be accessible via City Healthcares internal

information system. The possibility of there being more than one electronic version of the runcard


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RFID Journal (005). What is RFID? Retrieved on December 9, 005, from www.rdjournal.com

Sarma, S. (00). Integrating RFID. Queue, 2(), 50-5.

Singh, N., Lai, K. (00). Intra-organiational perspectives on IT-enabled supply chains. Communica-

tions of the ACM, 50(),

59-65.

Staake, T., Thiesse, F., Fleisch, E. (005) Extending the EPC networkthe potential of RFID in anti-

counterfeiting.ACM Symposium on Applied Computing, 60-6.

Walker, W. (005). Supply chain architecture: a blueprint for networking the ow of material, information,

and cash. London: CRC Press.

Wang, F., Liu, P. (005). Temporal management of RFID data. InTemporal management of RFID data. In Proceedings of the 31st Very Large

Databases (VLDB) Conference(pp. 8-39). Trondheim, Norway

ENDNOTES

1 Not the real name.

2 In April 005 the Food and Drug Administration (FDA) set regulations that require every medicalIn April 005 the Food and Drug Administration (FDA) set regulations that require every medicaln April 005 the Food and Drug Administration (FDA) set regulations that require every medical

device produced to have a bar code (Andrews, 005). However, to date, no such regulations have been

put in place to support RFID technology (FDA, 006).

Obstructive Sleep Apnea Department

System Application

Specialist(Supports theManufacturing

Knowledge system)

Software

Development

Manager

Product

Development

Engineer

Continuous

Positive Airway

Pressure (CPAP)

Team

Software Team Blower Team

Other

Departments

Product Departments

Cheif of IT

APPENDIX A. MANAGEMENT STRUCTURE OF CITY

HEALTHCARE


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APPENDIX F. TRACEABILITY FROM CUSTOMER BACK TO

MANUFACTURING (TRACEABILITY UPSTREAM)

Warehouse

ofraw

Supplier Manu-

facturing

Warehouse

of finishedgoods

Sales office Customer

Factory

Judith Symonds is a senior research path lecturer at the Auckland University of Technology, Auckland, New

Zealand. Symonds holds a PhD in Rural Systems Management from the University of Queensland (2005,Australia). Symonds has published in international refereed journals, book chapters and conferences,

including theAustralian Journal of Information Systems. She currently serves on editorial boards for the

Journal of Electronic Commerce in Organisationsand the International Journal of E-Business Research. Her

current research interests include technology adoption and eBusiness development for microenterprise.

David Parry is a senior lecturer in the Auckland University of echnology School of Computing and

Mathematical Sciences New Zealand. His PhD thesis was concerned with the use of fuzzy ontologies for

medical information retrieval. He holds degrees from Imperial College and St. Bartholomews Medical

College, London and the University of Otago, New Zealand. His research interests include internet-based

knowledge management and the semantic web, health informatics, the use of Radio Frequency ID in

healthcare and information retrieval.

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