Two firms, fewer than 10 miles apart, form a hub for the pharmaceutical labeling industry and both have state-of-the-art RFID labeling technology. CCL Labels’ Hightstown facility dominates the pharma label printing market (see page 44), and Systech International, with a 55-person office in Cranbury, has software that enables the pharmas to control quality at the manufacturing level and track products through the supply chain. They share many of the same clients.
Founded in 1985 and based on Route 130, Systech International provides packaging efficiency and product safety solutions for the pharmaceutical industry. It has software for automated inspection systems, such as bar code reading machines, and it is leading the way for pharmaceutical manufacturers to apply radio frequency identification device technologies. RFID will help the pharmas to “track and trace” their products, and also to authenticate them, so that consumers can be sure they purchased the authentic product.
Robert DeJean, founder of Systech, says his firm is poised to pounce on the pharmaceutical RFID market because it is already firmly established in the pharma barcode market, and it has been gearing up for RFID ever since that technology appeared. “We have been doing the same applications without RFID, and we are 10 years ahead of our time with respect to our philosophy on what is going to be good technology,” he says.
For instance, until several years ago, pharmas would ship out 500,000 bottles on a pallet with a lot number. Now, says DeJean, the same pallet will have 500,000 bottles, each bottle with its own serial number. “Our technology handles that very well, and we are positioned to incorporate RFID for those goals.” Systech has the defacto standard for item level RFID tagging by big pharmaceutical companies, he claims. “Most of the roads for RFID activity — testing of strategic plans for how to go forward with this — lead back to Cranbury. We work with all the primary suppliers, including CCL. We have the big enterprise companies positioning to partner with us. We are active in most of the major pilot projects with the big pharmas.”
RFID is not ready for general use because the price point is too high and retail stores don’t have the necessary equipment. But DeJean says that a pilot project for Pfizer’s Viagra, begun earlier this year, was meant to prove that RFID applications can prevent counterfeits by putting tighter controls on the supply chain. The counterfeit problem is costing pharmaceutical companies $35 billion a year now and that cost is expected to rise to $75 billion by 2010. Pfizer’s initial goal was to test the ability to get RFID into the supply chain. Any entity in the Viagra supply chain that was equipped with RFID infrastructure could confirm that it had valid products. Stores could read the RFID tags and confirm the authenticity of the electronic product code number through Pfizer’s secure website.
Here’s how it worked: A Massachusetts-based firm, Tag Sys, marked each Viagra bottle with an RFID tag. Systech’s Total Integrated Packaging System (TIPS) encoded and recorded the electronic product serial numbers to the RFID tags. It verified that the right label was going on the right bottle. As a backup Systech also provided software for barcodes. After Systech’s TIPS confirmed dates and bar codes and assigned case and pallet numbers, a California-based firm, Alien Technology, provided the equipment to tag the cases and pallets. Then Systech’s system managed the packaging and stored the data, day by day, so it could be tapped by managers of the supply chain.
“The price point is still a little high,” says DeJean, “but the RFID technology is there, and we are doing pilot projects with other firms.” Now the supply chain distribution industry is pressuring the big manufacturers to tag more products so they can practice tracking them through the supply chain. But the wholesalers and retailers do not yet have RFID readers.
After graduating from Fairleigh Dickinson University in 1981, DeJean (who is married to a computer teacher in North Brunswick and has two children) worked for an engineering company in Saddle Brook and Texas Instruments before founding his own firm. His brother, David, works for Systech as global director of serialization products.
DeJean grew up in Pittsburgh, where his father was an engineer and executive for Westinghouse. What he took away from dinner table conversations was “to bring value, to be good to customers, and don’t look for the quick in and out.” That resulted, he says, in Systech’s mission to try to find new ways to use data to help its clients.
For instance, on one of Systech’s early jobs, doing an inspection for a pharmaceutical company, he gave the client additional information about updating its inventory management system. “That gave them a multimillion dollar return on their investment,” he says.
The job was inspecting incoming vials for cracks. If a cracked vial were to be filled with a hot liquid, it would explode, shut down the line, and require a major cleanup. “We accomplished the inspection, but we also collected all the data on the analysis of those inspections and stored it. That customer was able to go back, at the end of the year, and find out the quality differences between suppliers. It was able to go from five suppliers to a primary and two secondary suppliers, saving millions of dollars,” says DeJean.
RFID momentum is building, DeJean emphasizes. He points to how, over the last couple of months, IBM, Oracle, SAP, and other enterprise companies have begun to turn their attention to RFID. Says DeJean: “When the big boys get involved, you know things are starting to move.”
Systech International, 2540 Route 130, Cranbury Campus, Suite 128, Cranbury 08512; 609-395-8400; fax, 609-395-0064. Robert M. DeJean, chairman. www.systech-tips.com