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The History and Future of Healthcare Supply Chain Automation

April 21, 2022

The supply chain has undergone many innovations and evolutions to become the refined process we know today. Most of these positive changes come from automation, helping businesses become more efficient with their existing workforce. This is especially true for the healthcare industry. The community's health is the most important result, so suppliers and providers must have a strong supply chain. The best way to offer that is through automation.

Let’s take a look at how healthcare supply chain automation got to where it is today and how we can solve its challenges with innovations on the horizon.

The History of Supply Chain Innovations in Healthcare

The following are some key dates and technological innovations that have contributed to the betterment of the supply chain as a whole (and specifically to healthcare):

Mid- to Late-1800s: Long-Distance Transportation

Before the Industrial Revolution, supply chains were completely localized. It was incredibly difficult to bring raw materials across long distances, so the supplier and manufacturing portions of the supply chain had to be relatively close together. 

After the invention of the steam-powered train and the development of the Transcontinental Railroad in America, suppliers could send their materials to the furthest corners of the country. The later invention of the automobile would then help transport these goods to more specific locations.

The 1960s: IBM’s Information Management System

IBM created IMS (inventory management system), the first computerized inventory management and forecasting system. It is primarily focused on transaction management, thus helping various organizations in a supply chain stay connected in their financials. IMS is heavily used in healthcare today when balancing transactions between vendors and insurance companies.

The 1970s: Real-Time Warehouse Management

JCPenney installed a real-time warehouse management system in their stock room. Warehouse workers no longer needed to memorize inputs from reference sheets or physically track what was going in and out of the warehouse—they could simply rely on the computerized system and barcodes.

The 1990s: RFID Tags for Faster Scanning

Radio Frequency Identification (RFID) tags were developed, a step up from barcodes. Instead of workers scanning every piece of inventory in transit, scanners automatically picked up RFID tags with rich information about the product, thus streamlining transactions.

The 2010s: Rich Data and AI Improve Risk Management

Supply chain managers have always tried to mitigate risks in their supply chain. This is particularly pertinent in the healthcare industry, where it’s vital to keep a watchful eye on costly medications and medical implements.

As supply chain management has advanced, more and more data has become available to managers, allowing them to track their inventory better and identify inefficiencies. Plus, with the help of artificial intelligence programs, these managers can receive real-time insight into how their risk management can improve.

The Future of Supply Chain Innovations

What can be done to offset current challenges and get the healthcare supply chain back on track? While healthcare facilities can’t solve the constraints caused by supply shortages, they can be more efficient with what’s available, thanks to modern supply chain innovations.

Here are some innovative supply chain technologies that are changing the healthcare industry.

Blockchain Smart Contracts

Blockchain smart contracts allow transactions to trigger when a certain condition is met automatically. 

For example, suppose a patient needs an MRI but is awaiting authorization from their insurance. A blockchain smart contract might automate this process by pulling and submitting data from the patient's medical records for authorization. Not only would this form of automation remove unnecessary steps, but the approval for the MRI could be achieved within minutes instead of days, and the medical data transaction would be more secure. 

Another example of blockchain smart contracts is sharing digital patient records with another hospital or physician after patients move their care to another location. Not only would automation prevent patients from having to fill out numerous forms regarding their medical history, but a patient’s important data would be better protected during the transaction.

Financial transactions receive similar benefits. For example, you are automatically charged if a vendor sends you inventory. The same transaction can be applied to your patients. In cases like these, this process takes out the middlemen of banks and financial institutions while still offering financial security, allowing your transactions to be more efficient with no added risk.

Predictive Analytics

Healthcare facilities need to look toward the future to assist their community. Predictive analytics lets you do just that with real-time and historical data collected using various techniques, including data mining and statistics.

There are several examples of how this process is already changing the healthcare industry financially and in patient outcomes.

Perhaps one of the most significant benefits for patients is the ability to predict what chronic diseases and conditions patients are more at risk for based on factors like:

With these predictions, healthcare providers can begin preventative care before a disease develops and progresses, directly impacting patients’ outcomes and life expectancy. In hospital settings, data can also predict a patient’s readmission risk by putting preventative measures and customized treatment plans in place to reduce this risk.

Furthermore, the statistics and data mined from predictive analytics can be used to prepare for potential future population health trends more proactively and ensure that larger amounts of medical supplies are on hand.

But these benefits extend beyond the patient health and outcome in the healthcare industry. The use of predictive analytics also gives providers benefits like:

Cloud-Based Enterprise Resource Planning (ERP)

Cloud-based ERP systems make managing data easier. Since the healthcare industry is inundated with large amounts of data, having a system to organize and verify that information is crucial.

These ERP systems make it easier to view data about financials, current supply needs, and patient records. Thus, you can stay on top of both your facility’s needs and your patient’s treatment.

Recall Communications

One of the most impactful changes of healthcare supply chain automation is in recall communications and, when used properly, it offers several benefits, including the ability to:

Perhaps the most important benefit of recall communication is medical suppliers’ ability to alert affected locations through electronic notifications quickly. These alerts directly impact a patient’s outcome and financial liability. In turn, medical providers can then promptly alert patients and coordinate within their system to remove recalled products from the shelves and return them to the supplier.

Innovative technologies and solutions like NotiSphere further those benefits by reducing the time it takes to receive recall alerts, improving compliance, minimizing costs, and eliminating recall notifications that don’t affect a medical supplier or provider.

Automate Your Supply Chain Today

Supply chain automation ensures that your facility is well-staffed and well-stocked so you can deliver on your promise of better health in the community. Thus, it’s essential to use every tool available, including NotiSphere’s recall communication system.

Start a free trial today to see how our service improves recall communication between suppliers and providers.

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