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Case Study: Combating Diversion with a Customized RFID Solution

By: Holly Jensky
Posted: October 1, 2012, from the November 2012 issue of GCI Magazine.

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New Sunshine has two operations located in Tempe, Arizona—a manufacturing facility and a distribution center—and all product development, bottle production and labeling (RFID and prime) takes place in the manufacturing facility. The bottles are high-density polyethylene, and the prime labels are pressure sensitive or shrink wrap.

“For New Sunshine, it was essential that the RFID tagging system not have a significant impact on operations,” Manley notes. “The selection of the data carrier (RFID or bar code) significantly impacts the business processes, such as picking and order fulfillment. RFID can read an entire box full of bottles without incremental labor, whereas bar code increases labor by requiring a user to handle each individual bottle and scan the bar code due to the fact that it is an optical line-of-sight technology.”

The second step was prequalification—a systematic process for identifying all appropriate RFID subsystem components, including reading equipment and the associated RFID tag inlay. The process is used to identify two or more RFID tag inlays that either meet or exceed operating margin requirements—the minimum power required to activate a passive RFID inlay on a product at both the item- and case-levels, and the readability of each item—for all desired use RFID tag reading applications.

“New Sunshine shipped us several Designer Skin product samples to conduct testing on,” Manley says. “We set up RFID portals to test a number of different tags to see which tags worked best for the client’s products. Suntan lotions have physical properties that can make reading RFID tags difficult, so it was crucial we find a tag that was sensitive enough to work well with their products and containers. In addition, it was vital that the tag be able to withstand the heat tunnel in which the shrink wrap is applied to many of the Designer Skin high-density polyethylene bottles.”

The Designer Skin product line consists of 14 different bottle shapes in a variety of sizes, ranging from 3.6 oz to 20 oz, with the majority of its bottles being 13.5 oz. “Not only was it critical that the RFID tag work properly with the tanning lotions and that we identify one tag size that is going to work across the range of bottle shapes and sizes, but also that the tag not intrude on the design of the package or label,” Matthews explains. “We are able to hide the RFID tag underneath the pressure-sensitive label or shrink wrap without having to give up valuable packaging real estate or impacting our brand image. This was a very important factor to us.”

With the RFID tag hidden behind the label or shrink wrap—applied horizontally to the wide bottles and vertically to the narrow bottles—an individual would have to cut off the pressure-sensitive label or shrink sleeve in order to remove the tag, making the product most likely un-resellable. “There’s no way to circumvent the system that we created,” Manley says. “This ensures product chain of custody.”

RFID Verification and Encoding

WS Packaging standardized one UHF Gen2 RFID inlay comprised of an Impinj Monza chip, antenna and a clear film substrate that is applied to a pressure-sensitive paper label. The RFID tags are produced, pre-encoded and tested at the WS Packaging facility in Algoma, Wisconsin, where the company enforces a thorough quality inspection process that sees that each incoming roll of RFID inlays is checked for bad inlays. WS Packaging ensures there are no duplicate inlays and that each is unique. Each finished tag is serialized and a log file is created for each one. The tags are then provided to New Sunshine on a master roll. The roll of tags is put into a label dispenser and applied by hand to each Designer Skin bottle, underneath the prime label or shrink wrap. “This system is robust and secure,” Manley says. “New Sunshine can have 100% confidence in the tags that WS Packaging provides to them. Each tag across all bottles, cases and pallets is unique. And if a product was subject to diversion, New Sunshine will be able to easily identify the source.”

“After finding the right tag for the different products, we reviewed New Sunshine’s business processes and mapped out the process flow,” Manley adds. “Then we identified the objectives of the RFID pilot and acceptance criteria, focusing on two key elements: does the system function as designed and did we deliver what we promised. We also identified the required RFID hardware, software and resources. Once New Sunshine approved the system design, we developed the necessary software and worked in a collaborative manner with the IT department at New Sunshine to ensure the RFID readers and database were up and running properly. Operator training was also conducted and completed. The system is simple in its operation.”

New Sunshine is rolling out the RFID tagging process in 2012 and will continue to add to it to its products in the future. “Through RFID technology we hope to better detect who is selling our products through unauthorized channels,” Matthews says. “We recognize diversion as a problem in our industry, and we want to be a part of the solution.”