How can the Internet of Things impact the health care supply chain?

The components used to create complex medical machinery are produced by hundreds of companies distributed across the globe. Knowing whether or not these implementations were produced ethically or were transported under unfavorable conditions is a challenge for procurement officers in the health care industry.

Devices aren't the only component of the medical sector about which purchasing professionals are concerned. While the chemical processes used to make particular drugs are one consideration, another is deducing how the materials used to create these drugs were transported between facilities. Not to mention, sourcing managers want to know whether logistics partners distributed finished products appropriately. 

Radio-frequency identification and Internet-connected smart devices can provide clarity in regard to these questions, but a number of challenges are preventing organizations from implementing the assets and platforms necessary to support them. Before scrutinizing these problem areas, it's important to detail how the aforementioned technology can provide health care enterprises with supply chain visibility. 

RFID: The foundation of transparency 

While barcodes provide warehouse managers and others with adequate information, it's not as detailed as the kind that RFID tags hold. In addition, orders can't be expedited as quickly with barcodes because personnel must physically walk up to items possessing these labels to register information. What's different about RFID? 

A report conducted by Transparency Market Research noted that RFID as a whole is comprised of tags, middleware and readers. Whenever a reader passes by a package equipped with a tag, the tag's microprocessor exchanges information with the reader. Tags can hold a wide variety of data, such as where certain products were produced, which facilities the items were stored in throughout the distribution channel and so on. 

Usage rates of RFID 

The research firm discovered that RFID use in the health care sector can be seen in medical reporting, blood transfer surveillance, pharmaceutical monitoring, human resources identification and, of course, distribution tracking. However, Transparency maintained barcode technology has hindered RFID growth, primarily due to its pre-established use throughout the industry. 

That doesn't mean it isn't feasible to use RFID technology. Smaller tags are more convenient for hospitals to attach to devices and pharmaceutical packages. Overall, RFID systems are expected to become more affordable, as instances of theft, a rise in drug counterfeiting and a universal need for more efficient supply chain practices are increasing demand for such solutions.  

A notable challenge 

As almost every global sourcing expert knows, it's incredibly difficult to account for every indirect and direct supplier relationship. The comprehensive visibility associated with RFID is only possible if each partner cooperates with the organization that initiates the technology's implementation. 

How can this problem be resolved? Start at the very beginning of the supply chain. This will obligate companies down the line to use RFID technology, as it will be the only way they can register when products were received and transferred. Even if a company that failed to use an RFID system employed workers attempting to commit fraud, it would be incredibly difficult for them to do so because their employer would be the first partner to receive scrutiny. 

Why the cloud is necessary 

Health IT Analytics contributor Jennifer Bresnick acknowledged how cloud infrastructures provide organizations with the platforms necessary to aggregate, process and use data produced by Internet-connected devices. As cloud technology provides professionals with the means to access applications and data from any place possessing Web access, it makes sense to deploy RFID solutions through the cloud. 

Of course, this presents a challenge in and of itself. How does a hospital get each of its partners to use the same cloud platform? Is it optimal to simply leverage RFID as a service instead? What does this mean for purchasing? These are other concerns that must be properly assessed.