Podcast | May 15, 2014

How To Implement Serialization, "Revolutionize" Supply Chain

serialization interphex interview with optel vision web image

Interphex Day 3 saw Todd and Todd interviewing Louis Roy, the president and owner of Optel Vision, which is responsible for bringing inspection and track & trace technology to companies’ packaging lines. Roy addresses the increasing need to implement serialization. While this service comes with a hefty price tag, he asserts that the investment is necessary to maintain regulatory compliance and to “revolutionize” recall, diversion, and anti-counterfeiting methods. Roy also gives advice on how to approach implementing serialization.

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Interview Transcription:

Todd S:            Alright. Good morning, this is Todd and Todd, live from New York. Life Science Connect Radio on location direct from Interphex Day 3. Todd, we have a very interesting guest up next. It’s going to be a great cap to the morning run. We’ve had a good bunch of chats so far.

Todd Y:            I don’t want a cap to the morning run. I want the morning to keep going on. The conversations are absolutely fascinating.

Todd S:            Yes, I’m with you. Well, let’s get right to it. Say hello to Louis Roy. He is the President and owner of Optel Vision. Louis, welcome to the show.

Louis Roy:        Thank you.      

Todd S:            It’s good to have you. Thanks for stopping by and joining us. Before we get into what promises to be an intriguing conversation, take a few quick seconds and tell us a little bit about you and your background.

Louis:               I founded Optel Vision at school. That’s 25 years ago already. Our main focus was bringing technology to increase the safety of the products of the different manufacturers. We kept that focus in the last 25 years and are growing our business into the pharmaceutical, in which the safety of the product is very critical.

Todd S:            Outstanding. Go deeper on Optel. Really dive into how you serve your market.

Louis:               We specialize in bringing inspection technology and track and trace technology to the packaging line. We’ve developed, since the start of the company, a lot of knowledge in optics, in software, in mechanical engineering, and in control.

                        We really specialize our expertise into the packaging line. We bring technology to packaging lines to increase the safety and meet regulatory compliance in the pharm mainline.

Todd S:            Louis, you may be shocked to hear there’s more than one serialization company here.

Louis:               Well, not shocked, I hope for the industry. Otherwise we’ll be in big trouble. (Chuckling)

Todd S:            Obviously I’m being a bit of a wise guy, but what makes Optel different? What sets you apart?

Louis:               We decided to take a vertical approach, really a complete approach for the packaging line. Our company has all the structure to take one packaging line and implement everything that is required for inspection and track and trace.

                        We have all the software, a mechanical designer, an automation engineer, validation people, a project manager, field support. We drill the hole, we pass the wire, we help validate the system, we train, and we support.

                        This required a very unique structure. This required a global support network and engineering support. That’s why we have engineering everywhere around the world, in India, in Europe, and in North America. This is a hard to grow structure, but we believe that it is what is required to make a project successful for implementing technology on packaging lines.

Todd S:            One of the biggest challenges that we hear from our audience is the use of site servers that exist outside of the ERP environment. Talk about how you help them deal with that issue.

Louis:               Our strategy is keep it simple. The more complex you make it, the more chaotic it will become, especially implementing track and trace deploying. There’s a big risk that you’re becoming in a big chaos. We always look at the architecture of the line, and then at the higher level to try to make it simple.

                        Of course the technology has evolved, the supplier at the IT level has evolved. We took a decision not to go at the IT level. Our expertise is at line level.

                        We decided we won’t go to the IT level to manage a serial number, but we found out a lot of partner SAPs, (0:03:30.1 AxWay, TraceLink, RFXL, and Frequent?) and many others can do all the IT management, and they are only doing that. It’s a great division because we have experts in IT that we can work with, and we are the experts in the packaging line that we have knowledge of.

                        We were able to convince customers to remove a site server and go directly with their global repository. Like we’ve done with TraceLink — it’s a cloud-based solution, and we connect directly from the line to the cloud-based solution, so they don’t need to have an additional layer at the site level to manage serial number, which just creates a bottleneck.

                        If the site server is down, all of the plant is down. But if you go with an approach like we do the line will be running even if there is a problem with the corporate server. We made it simple and very reliable.

Todd Y:            Louis, if I’m the CFO and I look at the investment that folks are asking me to make to implement serialization--- My knee-jerk reaction is, “No, it’s just too darned expensive.”

Louis:               Yes.

Todd Y:            There are all kinds of compelling reasons to do it, but convince me that I ought to make that kind of investment.

Louis:               Well, there’s regulatory compliance. Already we see countries like China who have done and have succeeded at this implementation even up to the aggregation level. Thirty have done it, so I think around the world there is proof that it is feasible. Yes, it is an investment and the technology will prove it’s a return on investment later on.

                        Because, of course, people don’t see the investment and the infrastructure, but the philosophy, and the supply chain will change because now there will be so much power into the technology that will bring Track & Trace that it will revolutionize supply chain. It will revolutionize return, recall, diversion, control, counterfeit, of course, fighting against counterfeits. There will be a lot of benefits.

                        Our approach with the customer is you’ve got to start slowly. Especially now we have the chance for the people who are strictly selling in the U.S., you have the chance that you have a delay. You have up to 2017 to sterilize the items and 2023 to aggregate. The complex part is the aggregation. Aggregation requires more modifications to the packaging line.

                        Our approach is we recommend to customers to start with unit level serialization. That is easier to implement, that’s a lower cost. Then you can start piloting one line with aggregation to understand the effect on all your operations. The Track & Trace, once you aggregate product into a case and you need to get this information validated, this has impact on all operations in the plant; the warehouse, the DC, the QA.

                        Unit-level serialization doesn’t have such an impact, but we recommend to our customers, “Okay, unit-level serialization is not a big challenge, but go, take one line, look at how to implement aggregation, and then understand the business impact that you’ll have on all of your operations.

                        Then prepare later on, because now you have 10 years; prepare every time you buy new machinery, okay, now you understand what the aggregation is, prepare the machinery to be ready for that to make it simple, to lower the cost, because in 10 years a lot of lines will be upgraded, so it’s time to know what you need to have.

                        What will be the requirement when you build a new URS or case packer? It is the right time to understand, “What will I put in my URS for the new machinery to be compliant with the aggregations that will come in 2023?”

Todd S:            Todd, speaking of investments, you and I just learned that Optel will be doing a significant investment in expansion in Europe, the Americas, and Asia.

Louis:               Yes.

Todd S:            Tell us why you’re doing that. What’s that doing to do for your capability to serve a broader market?

Louis:               We’re a global company. We’re already one of the leaders in the market with the most presence. I mentioned earlier, we took the step not to work with third parties. Line level is so critical and the complexity of the technology that we are implementing on the line level requires experts.

                        We don’t want to leave that to others, so everywhere we go we follow our corporate customers and we make the promise, “We will follow you wherever you are.”

                        Our corporate customers, they brought us to China, India, South America, Europe, and Africa. They are bringing us everywhere. Our promise is that, “Wherever you bring us you will have local support. Because if a Track & Trace system on the packaging line is down for any reason, a sensor, or a camera, or a printer, the line will be down.

                        We know for the pharmaceutical industry that a line down is a big waste of money, a big loss of money. Our promise is that we will support directly with the experts as close as possible. That’s why this investment is mainly to support our customers globally.

                        Wherever they are they will have project managers, they will have support technicians, mechanical engineers, and documentation people to make the deployment smoother. Not having a company, let’s say based in North America supporting implementation in India with 12 hours of difference.

Todd Y:            If I’m a customer, more importantly a potential customer, and I hear that story of you’ll follow me wherever I go — It’s very compelling. I want to dig a little deeper and ask, "How do you find that skill?” That’s a challenge for you internally to find that kind of talent in the location that you need it. How do you do that?

Louis:               I say to everyone, the world has changed. Two years ago, maybe two years and a half we had nothing in India. No business, nobody. I went on the internet using LinkedIn and I found my India Director who was the perfect guy who already had all the contacts. Within three months the guy started working for us, and now in India we’re believed to be number two, only after two and a half years.

Todd S:            Wow.

Louis:               We have one of the best teams, our customer in India saying that, “You have the best team,” because we have the best technique to recruit. The world has changed. Tell me to hire someone in South Africa, give me three months and I’ll have you an expert in South Africa.

Todd Y:            I’m glad we have that recorded. Really, just the passion and the confidence with which you just said that is really inspiring, it really is, because it’s such a tough challenge. It’s almost like you’re looking at me like, “Hey, no big deal Todd.”

Louis:               We’ve done it.

Todd Y:            I’m impressed, I’m impressed.

Louis:               Yes. The world has changed, that’s it.

Todd S:            Louis, we’re sadly drawing near the end of Interphex. What will be Louis’ key takeaway from this great event?

Louis:               I think we are noticing that peoples’ interests have increased. People see now that there’s going to be FDA mandates, so it’s serious. People have to start looking.

Todd S:            Louis, I hate to say it, but we’re out of time. Before we let you go, how can people get in touch with you and where can they learn more about Optel Vision?

Louis:               Our website, of course. We have people all over the world to support, and do site surveys and presentations, education also.

Todd S:            Okay. Louis Roy, President and Owner of Optel Vision. Louis, it was great to have you, thanks for stopping by.

Louis:               Pleasure, thank you.

TODD S:           Alright. Well, that wraps this broadcast. On behalf of our guest and my cohost Todd Youngblood, I’m Todd Schnick, Life Science Connect Radio’s live coverage from Interphex, we’ll be right back.

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