TRACK AND TRACE: Conveying Efficiency
A pharmaceutical returns processing company uses an RFID-directed conveying system to handle higher volumes with less manpower.
Returned pharmaceuticals are guided onto the right conveyors by RFID readers.
If there was ever a job for radio-frequency identification (RFID) technology, it’s at Capital Returns (Milwaukee). The pharmaceutical returns management firm was looking to improve its process of receiving and cataloging cases of expired drugs.
Like many products, pharmaceuticals carry expiration dates. But unlike many products that can simply be thrown away when they’ve expired, pharmaceuticals must be fully accounted for and properly processed prior to being safely destroyed.
That’s where Capital Returns comes in. The company works closely with pharmaceutical manufacturers, pharmacies, chains, and wholesalers to manage reverse logistics for pharmaceutical products. Capital Returns handles physical logistics and mines data gathered during the process. Such data can be used to identify and eliminate inefficiencies in the distribution chain and to help customers improve their overall inventory process.
In the past few years, Capital Returns has seen steady growth in its business, which facilitated the need to update its returns processing. Previously, when pharmaceuticals arrived, 11 employees were assigned to open all boxes for inspection and inventory into the proper bins for cataloging—a costly, time-consuming process.
“Our employees had to manually scan every box, read the label to identify the customer, and sort them on pallets,” says Larry Hruska, president of Capital Returns. “We kept holding up the UPS driver because we had to open up each box.”
To keep up with increasing volumes, Capital Returns invested in a new automated returns system from Dorner Autologik (Hartland, WI). Dorner Autologik provides customers with solutions in order fulfillment and returns processing of items. In examining Capital Returns’ needs, designing a system using RFID technology to automatically scan incoming packages was the best solution.
“It seems like everyone wants to put in RFID,” said Gary Seifert, vice president of GENCO Supply Chain Solutions, the parent company of Capital Returns. “RFID seems like a solution looking for a problem. But in this instance, RFID was the answer.”
Now, when a pharmaceutical company is contacted by a customer wishing to return some products, Capital Returns handles the reclamation on contract. RFID tags are at the pharmacy as part of the contract. The pharmacy simply prints a label and places the correct RFID in the box and ships it to Capital Returns.
The new Dorner Autologik system allows the delivery truck driver to unload the RFID-tagged boxes onto a system of 2-ft-wide 3200-series conveyors from Dorner Mfg. Corp. The conveyor is set up with controls to properly space the boxes for scanning.
Next, all incoming boxes take a left turn and pass through a bar coding tunnel and RFID antennas, where receiving information is scanned and captured. The ability to obtain all the necessary receiving information by simply scanning boxes allows Capital Returns to save time and money. That’s because the workforce of 11 that used to open and inventory all incoming packages has been reduced to only five employees.
For those customers whose pharmaceuticals are considered controlled substances, Capital Returns sends them specific RFID tags to include in their shipments that get sent back to the company for processing. This step provides Capital Returns with all the information they need to inventory and track such controlled substances.
After scanning, packages take another left turn on a Dorner 3200-series conveyor for labeling, which includes tracking information that employees will use to inventory the product. Conveyors then move packages up a gentle incline to an area where they are automatically sorted to one of five lines for processing. The information received when the packages were initially scanned seconds earlier tells a database at the cross-belt sorter to which processing lane each package is assigned.
Capital Returns previously processed about 2000 packages per day. Now, it is processing about 3000 a day, with six fewer employees. “Now the UPS driver holds us up because he can’t unload the truck fast enough to keep up,” says Hruska. If business continues to grow, the Dorner Autologik system, installed in April 2007, can grow, too. Its top processing capacity is about 12,000 packages per shift.
Capital Returns was introduced to Dorner Autologik through GENCO’s involvement with Six Sigma, a systematic approach to improve processes by eliminating defects.