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RFID Chip in Healthcare Logistics

RFID Chip in Healthcare Logistics
August 17, 2016

Radio-frequency identification (RFID) technology has spread through the logistics field in fits and starts.

One of the largest "starts" came in 2003, when a retailing giant mandated that its top sellers prepare to tag shipments of pallets and cases with the small electronic chips. Although many suppliers rushed to comply, the dream of achieving inventory accuracy and labor savings soon ran into the harsh reality of high equipment costs and unreliable technology.

Now, RFID is gaining traction in anew sector, as an increasing number of businesses in the healthcare supply chain embrace the technology. They see RFID as a potential solution to a wide range of challenges—from tracking expensive devices to reducing unnecessary inventory stockpiles.

Most consumer goods retailers find that RFID tags,readers networks that collect their data—are still too expensive to be used for tracking individual items. But the steep size of the healthcare industry and the high value of items such as pharmaceuticals and medical devices have persuaded many medical users that they could see a quick return on any investment in the technology.

RFID tags can help practitioners meet these market demands and save money, delivering a return on investment (ROI) by eliminating waste, increasing visibility, improving inventory tracking, and boosting regulatory compliance.


Many hospitals keep excess equipment in their stockrooms in order to ensure they can instantly provide any medical supply that a patient might need. That means waste reduction is a prime target for saving money.

Hospitals and medical device manufacturers throw one in five products in the garbage because the inventory has expired or is mismatched with patients' needs


One answer to the visibility problem may come in the form of RFID-enabled ‘smart shelves’ that use embedded RFID scanners to automatically track high-value inventory like implantable stents, knees, heart valves, and pacemakers.

Each smart shelf has a power cord and an Internet connection, so it scans the items dozens of times per day, then sends that information to an inventory management platform that can be accessed by hospitals, manufacturers, and distributors. Most systems also run these scans every time an item is stocked or removed, recording details such as the lot number, serial number, universal product number (UPN), purchase order, expiration date, arrival time, and the duration it's been at the inventory.

Compared with existing stock-keeping methods like handheld bar-code scanners or manual paper checklists, RFID scans collect more data and share it more broadly with other systems. The approach allows data to quickly flow between separate software platforms such as a device maker's manufacturing execution system, a healthcare network's materials management system, a hospital's electronic medical records platform, and a supplier's warehouse management system (WMS).


Another way that RFID can pay off in healthcare applications is by helping businesses adhere to strict product safety and security protocols,

For example, to comply with provisions of the Drug Supply Chain Security Act aimed at maintaining product integrity, discouraging theft, and preventing counterfeiting, logistics professionals in the pharma supply chain must implement rigorous systems for tracking and tracing their shipments. The precision of RFID tracking can help them meet the Food and Drug Administration (FDA) requirement, by being able to pinpoint the location of any drug throughout the supply chain The benefits of ensuring the safe and swift delivery of medical products to hospitals go beyond the savings achieved through streamlining the supply chain. It also helps improve patient experience.

The use of RFID could make the supply chain more efficient by allowing suppliers to track pharmaceuticals and medical devices, fill orders quickly, support cost-savings initiatives, improve inventory control, and reduce errors.


Despite the benefits of streamlining the supply chain for high-value healthcare products, the widespread adoption of RFID is still hampered by the technology's cost. Despite cost reduction the solution is still too expensive to tag everyday items like bandages

If improvements in manufacturing and technology continue to make RFID cheaper, the technology could spread much farther throughout the healthcare sector.

One such avenue might arise from the confluence of RFID technology with an unexpected platform—smartphones.

Since NFC uses the same wireless specification as high-frequency RFID tags, it could mean that millions of people may soon be enabled with RFID readers in their pockets. This could have sweeping implications for home healthcare.

For instance, patients with RFID-scanning smartphones could monitor their own home medical care by recording the pharmaceutical products and medical devices they use each day and sending the data to their physicians. In turn, that could empower senior citizens to live more years in their own homes before moving to assisted-living facilities.

Medical providers in many corners of the healthcare industry are finding that the latest generation of RFID tracking and data-analysis technology can provide a reliable return on investment. From manufacturers to warehouses and from hospitals to homes, RFID adds visibility to the healthcare supply chain and could become an important tool in empowering the sector to meet the demands of practicing modern medicine.