supply chain
How technology
can help

Author: Whitney J. Palmer

Several years after the pandemic, healthcare supply chain challenges continue to impact industry. According to the Health Industry Distributors Association (HIDA), there have only been slight reductions in the volume of delayed medical containers and the length of shipping delays between December 2021 and November 2022.

Given that over 90% of respondents to a HIDA survey expect the medical supply chain situation to stay the same or worsen in 2023, it is no surprise that healthcare executives continue to take a closer look at their supply chain. A Syft survey found that 93% of respondents agree that their organizations have taken "some steps" to address vulnerabilities, but nearly two-thirds think more should be done to protect against future medical supply chain disruptions. The Kaufman Hall State of Healthcare Performance Improvement report identified the use of advantage technology as a key component of addressing supply chain challenges.1

Healthcare operational challenges and the supply chain

The Kaufman Hall report found that 99% of healthcare respondents have encountered supply chain issues.2  Some of the top healthcare supply chain challenges include:

Low resilience

Deloitte research highlights the benefits of supply chain resilience, particularly given that hospitals and healthcare systems historically find it challenging to pivot due to their size—even in the face of emergent circumstances. As a result, medical supply chain disruptions can occur, negatively impacting both patient care and hospital operations. Healthcare leaders are increasingly recognizing the need for agility, citing supply chain disruptions as their second-biggest priority behind ensuring patient safety.

Limited visibility

Linked with low resilience, limited visibility can be the result of a siloed structure within healthcare institutions. Without easy access to data that is both centralized and available in near-real time, for instance an existing inventory system, it can be hard for healthcare leaders to determine what supplies their facilities need and what they have available. Some of the shortfalls of inventory management systems may include:

  • Lack of access to a centralized inventory hub
  • Tracking obsolete materials
  • Locating lost materials
  • Changing demand
  • Managing overstocked materials
  • Managing defective inventory or waste
  • Inefficient inventory management software
  • Out of date inventory processes or technology

It's also much more difficult to predict future demands, potentially leading to shortages. The United Nations estimated that greater supply chain visibility (specifically into cold chain shipping) could have saved one billion COVID-19 vaccines.

Cost management

Expenditures within healthcare facilities can soar when supply chain visibility is low. Even after two years, demand for personal protective equipment (PPE) is still high. Throughout the pandemic, hospitals and healthcare facilities nationwide spent more than $3 billion on PPE. Even with dropping PPE prices, it's currently one of the largest expenses many healthcare facilities endure. However, without a clear view of inventory, executives are at risk of both supply shortages and/or unnecessary spending.

How technology can help

Healthcare supply chain challenges have the potential to negatively impact patient care and the bottom line. For example, over $34 billion is lost annually from healthcare products exposed to temperatures outside the recommended range. A Syft survey of healthcare C-suite leaders found a majority believe improvements in their supply chain management could boost revenue. Fortunately, there are many technologies and software tools that can directly address these supply chain challenges.

Internet of Things (IoT)

The ability to seamlessly share patient data across devices (i.e., smartphones, patient-monitoring tools, tablets, etc.) is already a critical element of everyday healthcare operations. It's also vital to the supply chain [For Verizon, please link to ECO MFR 05 'How IoT can enable a demand-driven supply chain']. Medical devices and equipment enabled with IoT sensors can make it easier to automate and provide near-real-time updates on supply chain processes and equipment performance. For example, IoT sensors can help to accurately track an organization's full supply chain.

Data analytics

By using advanced supply chain analytics, healthcare providers and leaders can more accurately monitor the large amounts of data that is collected by IoT devices. This information also opens the door for benefits including better forecasting, improvements in efficiency, key performance indicator tracking and inventory optimization. Ultimately, using advanced analytics will help healthcare leaders make better, more informed decisions for their medical supply chain.

Radio frequency identification technology (RFID)

With the quality of patient care on the line, having enough resources on hand is paramount. Consequently, asset tracking—knowing when supplies are low and where newly ordered supplies are—is a priority. RFID tags and sensors, like the GPS tracker, can assist with this healthcare supply chain challenge in a way that saves both time and money. Whether they are included in the packaging or installed in smart supply cabinets, they can monitor and track products in near-real time. As a result, inventory management improves and potential shortages can be avoided.

RFID and IoT devices can also play an integral role in cold chain monitoring. Many medications and vaccines, including one of the COVID-19 vaccines, must be transported and stored at specific temperatures. RFID passive sensors and data loggers can record details about temperature and moisture, alerting providers and leaders to heat exposure.

The importance of 5G to addressing healthcare supply chain challenges

5G technology is uniquely suited to help organizations respond to the various healthcare supply chain challenges they currently face.

As healthcare systems continue to expand, so do the number of devices that must be securely connected to a hospital or healthcare system's supply chain. 5G has the capacity to provide connectivity to 10 to 100 times the number of devices that a 4G-enabled system can handle. More devices mean that the volume of data will also balloon. 5G has the ability to support up to 10 terabytes.

In addition, the deployment of 5G can make it easier for healthcare systems to use edge computing to strengthen and streamline the medical supply chain. Supply chains that leverage ultra-low latency, mobile edge computing and artificial intelligence empower both providers and facility leaders with the institution-wide data they need to analyze their medical supply chain in near-real time.

Enterprise Intelligence and the medical supply chain

When leveraged correctly and efficiently with the increasing number of IoT devices, 5G connected technology can provide hospitals and healthcare systems an Enterprise Intelligence solution for the operational challenges that come hand-in-glove with scaling data. Whether it's from sensor-enabled patient-monitoring devices, provider smartphones or wearables, each tool can capture a vast amount of valuable information that can better inform a facility's daily operations. With accurate and easily accessible data, facilities are better positioned to streamline their supply chain management and positively impact patient outcomes.

From the day-to-day perspective, a well-organized and maintained medical supply chain is the foundation of healthcare operations. With more data at their fingertips, hospital and health system executives can address their healthcare supply chain challenges—and 5G can help them along the way.

Learn more about how Verizon is driving the evolution of healthcare technology.

The author of this content is a paid contributor for Verizon.

1 Kaufman Hall, State of Healthcare Performance Improvement, page 15.

Kaufman Hall, State of Healthcare Performance Improvement, page 4.