DC Velocity - June 2016

BY BEN AMES, SENIOR EDITOR

RFID

technologyreview

RADIO-FREQUENCY IDENTIFICATION (RFID) TECHnology has spread through the logistics field in fits and starts.

One of the biggest “starts” came in 2003, when retailing giant Wal-Mart Stores Inc. mandated that its top suppliers prepare to tag shipments of pallets and cases with the tiny 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.

A decade later, RFID began to gain new proponents, as fashion industry and electronics retailers started to tag high-value items. By that time, many of the technology’s kinks had been worked out, and tag prices had dropped to the point where RFID had become a viable solution to tracking costly inventory and discouraging shoplifters.

Now, RFID is gaining traction in another new 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—and the readers and networks that collect their data—are still too expensive to be used for tracking individual items like a jug of milk or a stapler. But the sheer size of the healthcare industry and the high value of items such as pharmaceuticals and medical devices have convinced many medical users that they’ll likely see a quick return on any investment in the technology.

The sector could also use RFID to keep up with rapidly
changing market conditions such as increased demand for
trace capabilities mandated by the 2013 Drug Supply Chain
RFID tags can help practitioners meet these market
demands and save money, delivering a return on invest-
ment (ROI) by eliminating waste, increasing visibility,
improving inventory tracking, and boosting regulatory
compliance.

TAKING AIM AT WASTE

Many hospitals keep excess equipment in their stockrooms in order to ensure they can instantly provide any medical supply that a patient might need. Even with overnight delivery, there is no time to order a missing item when medical emergencies strike. That means waste reduction is a prime target for saving money.

“Today, we are faced with a healthcare supply chain with an unsustainable amount of waste,” says Jean-Claude Saghbini, chief technology officer and vice president of inventory management solutions at Cardinal Health Inc. in Dublin, Ohio. Hospitals and medical device manufacturers throw one in five products in the garbage because the inventory has expired or is mismatched with patients’ needs, he says.