What solutions were considered by PMI? Were these solutions appropriate to the problem?

PMI currently uses bar codes that only provide limited amounts of information and carry no unique information identifying each carton or pack. Unauthorized dealers have been able to bypass this by not scanning the cigarettes at all meaning the cigarettes could not be tracked. The limited amount of technology that PMI currently has led to more advanced technology solutions that would help them comply with the agreement.

The solutions that PMI is considering include the most expensive solution, RFID technology. This solution would involve placing tags with antennas and computer chips on products so they could be tracked. An RFID pilot program would cost between $1 and $3 million and a full rollout with tags, readers, and software would end up costing $13 to $23 million dollars. To meet the demands of the agreement, the company would have to place tags on every carton of cigarettes. At 50 cents each, the tags would cost them over $2 billion dollars and that price does not yet include the cost of software, readers, and other required hardware.

Another solution PMI is considering is an ink-based bar code created by a Swiss security firm known as SICPA that also makes inks for currencies such as the U.S. dollar. Their solution to the problem is to sue a SICPATrace that would encode packages with a special bar code made with ink that the naked eye cannot see. The bar code is created by a sequence of light and dark squares and can store more information than a regular bar code. Unlike the RFID tags, it has no computer chip. A scanner would be able to read thousands of ink codes at one time and store the information in a database with sales and tax history data. This information would allow the item to be tracked throughout the entire supply chain. The range though is much shorter than RFIDs. It must be scanned within 6 inches.

PMI did consider all the solutions available to the company, but is still having trouble deciding what solution is best for their company and will also satisfy the EU agreement.