SAP Unleashes Next Wave of Business Process Innovation with RFID

With expected availability for first customers in Q2 2007, product tracking and authentication (PTA) marks the first in this new generation of business processes that tap into the wealth of information on sensor-tagged objects – information that will be managed in the newly developed SAP object event repository. Among the first of many industries that stand to benefit is the pharmaceutical sector, where PTA processes will help secure distribution and combat drug counterfeiting and diversion, a problem estimated to cause $75 billion in lost revenue per year by 20101. The announcement was made at the CeBIT trade fair, being held in Hanover, Germany, March 15 – 21.

Integrating real world information into core business processes

The SAP object event repository ushers in a new era of business value derived from “serialized” objects – products, shipments or assets labeled with electronically readable, unique serial numbers such as Electronic Product Code (EPC) on RFID tags, bar codes or sensors. It will enable companies to combine serialized data with data from enterprise resource planning (ERP) and other business applications to enable greater visibility, accountability and accuracy in areas such as regulatory compliance, manufacturing and supply chain and asset management.
PTA, the first business process tapping into the SAP object event repository, enables companies to track and authenticate the serialized products that they manufacture and distribute, both within their own enterprise and when products are in the custody of trading partners. In the pharmaceutical sector, for example, prescription drugs can be identified with unique EPCs according to the EPCglobal standard. Trading partners can exchange this information to validate the drug’s authenticity as well as its chain of custody along every point between manufacturer and retail pharmacy. Companies such as defense contractors and automotive suppliers will be able to verify the usage of qualified parts and prevent usage of duplicate or unwarranted parts by tracking the unique serial numbers, business events and transactions associated with the parts.

Driving successive waves of innovation

The SAP object event repository and PTA offerings mark key milestones in SAP’s pioneering vision of adaptive supply networks using “real-world aware” technologies – RFID tags, bar codes and sensors that deliver actionable insight to decision-makers and enable businesses to sense and respond automatically to supply chain events. By embedding RFID capabilities into its market-leading supply chain management applications, SAP played an instrumental role in driving the first RFID wave, which focused largely on inbound and outbound logistics. Today with more than 200 customers in 16 industries productive with SAP solutions for RFID, SAP is helping customers deploy “real-world aware” technologies in innovative applications such as tracking medication to improve patient care, safeguarding chemicals deliveries and monitoring safety equipment.
“SAP’s introduction of its object event repository and the new processes it enables, such as product tracking and authentication, represents a significant step in the evolution of RFID. Companies have been waiting for their enterprise software vendors to build applications and analytical tools that can take advantage of the unique value RFID provides,” said John Fontanella, VP of Research, AMR Research. “SAP is taking that one step further by providing a technical infrastructure that leverages the existing technology of its customers. In addition to tackling regulatory compliance issues, it also opens up a wealth of information to help companies validate product sources, better respond to supply chain events, or even offer value added services to customers.”

Targeting evolving industry demands

Supporting the EPCglobal’s EPCIS specification2 as well as the U.S. Department of Defense UID standard, the SAP object event repository will help companies meet key industry requirements such as the pharmaceutical industry’s anti-counterfeiting measures for product “serialization” and “e-pedigrees” (electronically signed documents certifying a product’s origin and chain of custody).
One of the pharmaceutical industry’s leading players using SAP software to support mass serialization to help ensure product integrity and patient safety is Basel, Switzerland-based Novartis. The company is working closely with SAP on an end-to-end solution that meets pharma industry requirements and is currently implementing a serialization project in its U.S. operations based on SAP software, including SAP Auto-ID Infrastructure and the SAP object event repository. The aim is to track each Novartis medication bottle, display carton, shipping case and delivery pallet in real time, verifying the authenticity of products as they travel through each stage of the supply chain.
“Product tracking and authentication based on SAP’s EPCIS-compliant repository is a central element of our strategy,” said Marc Bechet, head of IT for Global Technical Operations at Novartis Pharma AG. “In addition to helping meet regulatory requirements, this SAP solution will enable seamless integration into our SAP ERP system and access to existing transactional information. The integration of serialized data with business data will allow us to take advantage of mass serialization to deliver business value. Further, this approach will give us the flexibility to adapt as business models change – thereby protecting the investment Novartis is making in this area.”
“SAP continues to play an industry-leading role in driving the successive waves of innovation with emerging technologies that demonstrate significant business potential for our customers,” said Krish Mantripragada, global head of RFID and Auto-ID Solutions, SAP. “With product tracking and authentication and the SAP object event repository, we are introducing capabilities that will help companies across diverse industries tap even greater business value from their RFID investments. These groundbreaking developments make our vision of ‘real-world aware’ technologies a reality today for our partners and customers and open a world of new opportunities for business process innovation.”

Source: SAP AG