Monday, November 24, 2014

Reducing healthcare supply chain costs with new technology

The challenge:

For the healthcare industry, the top strategic imperative has been to reduce costs while delivering high quality care. This is usually achieved by primarily by focusing on waste reduction in clinical operations, such as reduce unnecessary tests and the length of hospital stays. However, the healthcare supply chain consumes from a third to two-thirds of all hospital operating budgets, yet remains overlooked. In terms of healthcare expenses, supplies are only second to labor. Given the sheer quantity of product going through the supply chain on a daily basis, any inefficiency in the process can raise the overall costs very quickly.

Healthcare supply chain is one of the oldest and more complex, yet still remains relatively immature in terms of level of coordination, data standardization, and overabundance of errors. Inefficiencies such as long cycle times and manual data processing are the results of a lack of data standardization among product, trading partner and customer locations. These inefficiencies can also impact on the quality of patient care because paper-based process and lack of data standards slow down clinical operations and increase the likelihood of medical errors.

In order to address the current issue of high costs and low quality of healthcare, a two-pronged solution focusing on data standardization and mobile technology in supply chain automation is necessary. Data needs to flow seamlessly and automatically around the globe from providers to distributors and manufacturers in real-time and be easily tracked.

Data standardization for location and product identification:

One such technology that answers this need is the universal GS1 data standard identifier – a single data standard for location and product identification. Created by the healthcare industry itself, these standards provide a single, rich, global repository of accurate up-to-date information that care be leveraged by healthcare providers, distributors and manufacturers to simply inventory management. GS1 data standards include:

·        The Global Location Number (GLN) to identify the location of transacting entities

·        The Global Trade Identification Number (GTIN) for the identification of the products

Providers, distributors, manufacturers and GPOs along the supply chain can access all of the data that is stored in a GLN Registry by subscribing to the Global Data Synchronization Network (GDSN) to register and access data standards. The GS1 data standards eliminate the need to transpose order information and improve processing speed and data accuracy. GS1 DataMatrix 2D barcodes can be permanently etched into the surface of a product or a product component, allowing for easy tracking and tracing of surgical instruments.


Mobile automated data capture:

With the data standards and identifiers in place, the next step is to have the ability to automatically identify and capture information from the point of arrival (POA) to the point of use (POU). This kind of automation will greatly reduce the time and cost involved in logistics throughout the entire healthcare supply chain. Not only that, bar codes scanning can also be done at patient bedside, which improves information access and reduces medical errors.

Real-time locationing for mobile medical equipment:

Unlike medical consumables which have specific storage spot, medical equipment does not. IV pumps, wheelchairs, and heart monitors rarely ever sit in one spot inside a hospital. If GS1 identifier is encoded for these devices on a Wi-Fi or RFID tag, then the hospital is able to track their locations easily in real-time. This not only improves operations efficiency by reducing the resources needed to keep track of all medical equipment, but also enhances patient safety by lowering medical errors.

Implementation and looking ahead:

This innovative use of technology in healthcare supply chain can undoubtedly help to improve operations efficiency and the quality of patient care, but the final challenge is the implementation part. Not every organization in the supply chain is using standardized data and real-time tracking and monitoring technology, and some people are still attached to the idea of using legacy systems and doing manual processing. It is uncertain how long it will take for everyone to embrace the new technology in supply chain management, and only time will provide us the answer. But how long do you think is necessary to fully streamline the entire healthcare supply chain?


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