Reducing Loss in the Medical Supply Chain
Reducing inefficiencies in the supply chain has been a long-standing challenge for companies everywhere.
In 2020, the goal of reducing supply chain inefficiencies has become especially true for the healthcare industry, as hospitals and healthcare systems work to reduce the billions of dollars spent on unnecessary supply chain operations every year. Currently, healthcare costs more in the United States than almost any other country. Nearly a third of these costs are attributed to supply chain operations, and that number is only expected to grow in the coming years.
What causes such high costs every year? One of the root problems is incidents in the transportation stage of the supply chain process. These events can range from temperature excursions to improper handling: anything that ultimately results in unusable, wasted product. This damage can then lead to a variety of consequences and incurred costs.
Consequences of Transportation Damage
When pharmaceuticals experience a temperature deviation, companies are often forced to dispose of the cargo. Similarly, if a large piece of equipment, like an MRI machine, is handled poorly when unloaded from a truck, it can be rendered inoperable — even if only one area of the entire machine is damaged. In these instances, the company that has already spent a significant amount of resources purchasing the machine will then have to waste time while repairs are made or a replacement is shipped.
While the process of expending unnecessary resources isn’t ideal, identifying damaged items before they’re put into use can prevent a slew of other potential risks. For example, if the aforementioned MRI machine was delivered with no knowledge or sign of damage, it would go through setup and use like any other device. This damage could affect tests and the diagnoses given, possibly putting the patient’s health at risk.
An additional consequence of in-transit incidents is freight damage claims. This burden is put on the freight carrier responsible for delivering items to the receiver. Therefore, if items are damaged in transit, the purchasing company can — and is likely to — seek reimbursement. Essentially every party involved, from the carrier to the healthcare provider to the patient, is affected when supply chain damage is involved.
With technological advancements paving the way for innovation in 2020, companies now have access to a wide range of solutions designed to better the supply chain process. These solutions include indicators, monitors and recorders that can be used to track specific conditions. Condition-based devices can track for temperature, tilt and impact, and alert users of discrepancies, depending on the needs of a supply chain.
There are a multitude of impact-monitoring devices currently available for use on the market. Some indicators are single-use and field-armable, meaning they can be used at any or every step of the supply chain. These devices also act as a visual deterrent, alerting those handling items that monitoring is taking place. This adds an element of accountability, which ultimately reduces the frequency of damaging actions taking place. If mishandling does occur, indicators can help identify where in the supply chain the incident took place and who is responsible. If it occurs at the same checkpoint consistently, companies can provide indisputable evidence when reevaluating partners.
If long-term impact tracking is the goal, companies can leverage indicators fitted with an RFID tag, like SpotSee’s ShockWatch® RFID. Users can select the appropriate impact threshold before putting these devices into use. Then, each time an asset is scanned by an RFID reader, its condition is entered into a company’s warehouse management system. This form of tracking is most beneficial for identifying affected inventory before it reaches its destination. If damage is detected and immediately reported, steps can be taken to quickly repair or replace, thereby eliminating issues for the end user.
There also are more reusable solutions that can be used to monitor cargo through the supply chain. Standalone monitors can be affixed to pallets or products to provide real-time visibility. Using this type of device, anyone with approved access can view cargo conditions, rather than just those operating within the actual supply chain. With real-time tracking also comes real-time alerts. Instead of having to check items at every stop along the way and expending unnecessary resources, shippers can now set up monitors to send an alert if an incident is detected.
The number one driver of monitor implementation is monetary loss. Companies experiencing too many returned products, too much lost time and the associated cost of those missteps, look to monitors to reduce these issues. While the adage is true, “it’s better late than never,” companies should work to be proactive in their supply chain strategy. Implementing a monitoring solution will require some resources from supply chain operators but will also substantially reduce the annual amount spent on correcting mistakes and on healthcare.