Read the cases 9.1 and do business logistics RFID analysis. Address the cost, performance, and schedule for implementation needed to bring the desired supply chain visibility for return on investment

Case 9.1: Pro-X Pharmaceuticals Seeks RFID for Internal Benefits*:

The nutritional supplement producer Pro-X Pharmaceuticals is deploying RFID to help track inventory and manage production. By deploying RFID technology, the company hopes to increase visibility into its manufacturing and inventory processes and thus able to respond better to fluctuations in demand (Fig. 9.1). Pro-X is an independent contract manufacturer that produces Roex-brand nutritional supplements and also provides manufacturing and packaging services for other companies marketing nutritional supplements. Demand for nutritional supplements can shift quickly. For example, news reports related to bird flu caused spikes in demand for natural immunity boosters. On the other hand, reports that raise questions about the safety or effectiveness of any single supplement or ingredient used in supplements could quickly reduce demand. So Pro-X needs to be able to scale production schedules up and down quickly to maintain optimal inventory counts. The products the company makes have natural ingredients and are aimed at preventing and decreasing health problems primarily associated with aging and disease. Despite its name, Pro-X Pharmaceuticals does not manufacture pharmaceuticals and because its products are nutritional supplements, they are not subject to U.S. Food and Drug Administration (FDA) approval or supervision. Pro-X, based in Irvine, California, has chosen RFID systems integrator ODIN Technologies to help the company design and deploy RFID for work-in-progress manufacturing control and inventory tracking. The company is using passive, ultra-high frequency EPC Gen 2 tags and readers and middleware provided by Shipcom Wireless. Pro-X had started investigating RFID as a possible means of improving product tracking, work-in-progress manufacturing processes, and product quality. It should be noted that the RFID deployment is not motivated in any way by retailer mandates or external pressure from Pro-X's distribution network. Roex sells products directly to customers through a mail-order system and also makes products for 232 retailers in the United States, none of which are currently using RFID for product tracking. The designing phase of its RFID system is complete. Pro-X will add Gen 2 smart labels to bulk containers of ingredients used to make its products. At the Pro-X manufacturing facility, workers will apply smart labels to the containers of raw materials, which generally arrive in corrugated cardboard drums ranging from 5 to 45 gal in volume. The tags will be encoded, using a handheld interrogator, with unique IDs associated with a lot number, and any expiration dates linked to the ingredients. Pro-X also performs quality tests on the ingredients received, to certify that they are safe and pure. The results of these tests will also be associated with the IDs. Before production of a particular item begins, the necessary tagged containers will be gathered and interrogated, and the tag data will be aggregated in a database. This production record will be associated with the bulk quantities of finished products, which will be placed in large tagged barrels. Encoded to each barrel's tag will be an ID correlating with the batch data, so the finished product can be linked to the raw materials. Once each batch of finished supplement product is packaged into individual bottles for retail sale, those bottles will be packed in cases to which RFID smart labels will also be affixed. The tags will let Pro-X use interrogators in a number of different form factors, including handheld, fixed, and forklift-mounted devices, to track each case as it enters the inventory storage area and as it is picked to fulfill orders. Pro-X believes that in addition to improving work-in-progress tracking and inventory management, RFID will help manage any product recalls they might have in the future. The company plans to install an RFID infrastructure in distribution facilities, for instance, enabling it to use the smart labels to receive the tagged cases of its products into inventory, to fulfill orders, and to automate the identification and collection of products that might be involved in a recall. Using RFID should lead to benefits for Pro-X's retailer customers because Pro-X will have more visibility into exactly where in the production process customers' orders are at any one time. Pro-X has also recently installed Great Plains, a Microsoft platform for enterprise resource planning. The company is using the platform to manage accounting, inventory, and manufacturing processes. By pulling the tag data associated with the raw materials, finished products, and orders into the Great Plains applications, Shipcom will integrate the RFID system with Pro-X's back-end systems.