Tuesday, September 16, 2014

An effective inventory management solution for Healthcare industries

Inventory management is the most essential part of any organization. It is even more critical in the health care industry. This industry faces enormous pressure to improve the quality of care and access to care in a very hostile environment of declining reimbursements, and increasing costs. Surveys reveal that a typical hospital in the US spends between 15% and 25% of its budget on medical, surgical and pharmaceutical supplies. Why does this happen?
Traditionally, the procurement process relied on a decentralized ordering through phone and fax and often different areas in the hospital appeared to order their own supplies. This resulted in a lot of wastage due to unwanted stocking of materials added to the cost of storage and purchase. Alternatively, unlike other industries where an inventory stock out results in a loss of revenue, the impact of a stock out in hospitals is more critical. It is necessary for them to maintain sufficient level of inventory at all times. An efficient inventory management system is required to deal with tracking supplies, monitoring expiry dates of critical inventory, improving proper billing of lab supplies and consumption and reduce total on hand inventory. St Luke’s Health System, Missourie had decided to take a unique approach to solve this problem. They implemented RFID tagging to streamline their inventory management. This improved their billing accuracy and cut costs.
What is RFID technology?
RFID(radio frequency identification) is a wireless technology advisor that uses tags attached to the objects to be identified. The technology can provide real-time inventory data for high-value materials like implantable medical devices (IMDs), unveiling previously unavailable inventory visibility for these products. By tagging devices like artificial joints, heart defibrillators, cardiac stents and surgical mesh, healthcare facilities have an accurate and real-time view into their inventory in the operating room. It also informs which of the inventories are closest to expiring.  RFID is also used to manage shared storage areas such as locked pharma cabinets. Access to these cabinets can be restricted, controlled and audited using this technology. Inventories inside these cabinets can be seen real-time and from remote locations.
In short this technology is analogous to the dabbawalla case study where the containers had all the information about itself in it. The tags have a similar function where the item is tagged with the lot number details, expiry date and each point of contact for the item from the manufacturer to the pharmacy. To accurately track the tagged systems, RFID reading portals need to be designed which would allow the system to track the presence and movement of inventory without requiring staff to actively scan the item.
While the RFID has a great promise in managing the inventory system, they are application specific. There cannot be one tag to distinguish all the products. So can this technology be implemented in a cost effective manner for an organization with a very varied product mix?

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