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Part 3: RFID in Healthcare
Meeting in the Middle: An Approach to ROI
We contend that process of building the supply chain channel from the manufacturer to the distributor and from the healthcare provider to the distributor—working both ends toward the middle—logically addresses the total supply chain integration barriers of standards and gives the industry time to develop a robust infrastructure. This approach results from the study of how regulations, compliance, product tracking, and medical life cycle management issues—operational, administrative and financial—affect each supply chain component. This approach will also give the needed time for the respective standards, regulations and technology to develop a full supply chain solution.
Once the single entity (healthcare provider) has resolved the challenges within their four modular walls, an effective ROI will result. The entity (healthcare provider) can now extend the RFID implementation strategy to the distributor level. At the same time, the manufacturer will be working on achieving an ROI within its modular four walls. Therefore, the approach should resemble an “ends toward the middle” strategy, thus yielding a better overall ROI for the entire supply chain.
The primary reason we suggest a meeting in the middle, is due to the numerous complexities of regulations and the varying standards that apply when we reach the provider of products and services at the end of the chain. Standards could develop where the other individual supply chain links need not comply with a set of regulations and/ or standards: The most reasonable approach would be to develop a vertical industry standard within the existing EPC defined standards. These vertical industry standards are confined to a particular industry and they do not affect other industries’ supply chain. Below are some examples of standards that may affect different parts of the healthcare supply chain.
Healthcare Supply Chain Reporting and Standards
The healthcare industry requires, for the most part, standard uniformity of reporting (HIPAA, Sarbanes-Oxley Act, OSHA), tracking and safety approval (FDA, 21 CFR Part 11 compliance) and labeling compliance (HIBC, HIDA, GMP and ISO 9000 requirements).
Pending Regulations
There are two pending regulations. One is called "Restrictions on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment" (RoHS). As of July 1, 2006, the regulation will prohibit the sale of electronics-based products that contain more than 0.01% of specific hazardous materials. Since traces of hazardous materials are found in many medical devices, this law will fundamentally change the way such products are created, from initial design to sourcing of core components. The second regulation, "Waste Electrical and Electronic Equipment" (WEEE), is intended to ensure that electronic products are recycled or disposed of properly.
Geographic Standards
Split standards are seen when some regulations affect the supply chain in only one geographic area (Florida State Pedigree laws pending January 2006).
Healthcare Communications Standards
Electromagnetic emission/interference EMC guidelines (TIR 18 Medical Devices, ANSI c63.18)
Wireless transmissions for wavelength transmissions (ISO/IEC 18000-3 Part 3 – Parameters for Air Interface Communications at 13.56 MHz)
Environmental and Safety Standards
Environmental and operational safety patient standards may be relevant only to the healthcare provider: Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) standards are directly related to safety, addressing such issues as medication use, infection control, surgery and anesthesia, transfusions, restraint and seclusion, staffing and staff competence, fire safety, medical equipment, emergency management and security.
EPC IS and Data Visibility
The EPCglobal Network promises a lot to manufacturers, retailers, healthcare providers, hospitals and many more industries in the ecosystem. The EPCglobal Network brings visibility of assets, reduction in inventories, just-in-time inventory handling, reduction in labor and many other benefits.
While we appreciate the benefits of RFID and the EPCglobal Network, the amount of data that flows on the network and the overhead for maintaining the data becomes an obvious concern. Also, when a particular object moves from one level to the other in the supply chain, more information about the object would be added for its usage at the next level.
If your business was looking for efficient systems that are relatively cheaper, help you in reducing maintenance and reducing the overhead, and at the same time provide security, you need to attain a low cost of ownership.
Defining Low Cost of Ownership
The authors define Low cost of ownership as sharing of information common to organizations that would ensure better security and data exchange mechanisms. This low cost of ownership will result into smoother operations and eliminating the storage of repetitive data. This means information about any object that is common should be kept at one place rather than at each level in the supply chain storing the same information. The storage of repetitive data increases overhead. If an organization were given a choice of storing less data and, at the same time getting all the information they need through other systems, it will solve a lot of overhead problems. “Low cost of ownership has to do with improving process to remove waste, improve accuracy of inventory, by improving information quality”, says Steve Heap of RFID Exchange, an RFID consultancy firm based in Northern Virginia.
We contend that process of building the supply chain channel from the manufacturer to the distributor and from the healthcare provider to the distributor—working both ends toward the middle—logically addresses the total supply chain integration barriers of standards and gives the industry time to develop a robust infrastructure. This approach results from the study of how regulations, compliance, product tracking, and medical life cycle management issues—operational, administrative and financial—affect each supply chain component. This approach will also give the needed time for the respective standards, regulations and technology to develop a full supply chain solution.
Once the single entity (healthcare provider) has resolved the challenges within their four modular walls, an effective ROI will result. The entity (healthcare provider) can now extend the RFID implementation strategy to the distributor level. At the same time, the manufacturer will be working on achieving an ROI within its modular four walls. Therefore, the approach should resemble an “ends toward the middle” strategy, thus yielding a better overall ROI for the entire supply chain.
The primary reason we suggest a meeting in the middle, is due to the numerous complexities of regulations and the varying standards that apply when we reach the provider of products and services at the end of the chain. Standards could develop where the other individual supply chain links need not comply with a set of regulations and/ or standards: The most reasonable approach would be to develop a vertical industry standard within the existing EPC defined standards. These vertical industry standards are confined to a particular industry and they do not affect other industries’ supply chain. Below are some examples of standards that may affect different parts of the healthcare supply chain.
Healthcare Supply Chain Reporting and Standards
The healthcare industry requires, for the most part, standard uniformity of reporting (HIPAA, Sarbanes-Oxley Act, OSHA), tracking and safety approval (FDA, 21 CFR Part 11 compliance) and labeling compliance (HIBC, HIDA, GMP and ISO 9000 requirements).
Pending Regulations
There are two pending regulations. One is called "Restrictions on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment" (RoHS). As of July 1, 2006, the regulation will prohibit the sale of electronics-based products that contain more than 0.01% of specific hazardous materials. Since traces of hazardous materials are found in many medical devices, this law will fundamentally change the way such products are created, from initial design to sourcing of core components. The second regulation, "Waste Electrical and Electronic Equipment" (WEEE), is intended to ensure that electronic products are recycled or disposed of properly.
Geographic Standards
Split standards are seen when some regulations affect the supply chain in only one geographic area (Florida State Pedigree laws pending January 2006).
Healthcare Communications Standards
Electromagnetic emission/interference EMC guidelines (TIR 18 Medical Devices, ANSI c63.18)
Wireless transmissions for wavelength transmissions (ISO/IEC 18000-3 Part 3 – Parameters for Air Interface Communications at 13.56 MHz)
Environmental and Safety Standards
Environmental and operational safety patient standards may be relevant only to the healthcare provider: Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) standards are directly related to safety, addressing such issues as medication use, infection control, surgery and anesthesia, transfusions, restraint and seclusion, staffing and staff competence, fire safety, medical equipment, emergency management and security.
EPC IS and Data Visibility
The EPCglobal Network promises a lot to manufacturers, retailers, healthcare providers, hospitals and many more industries in the ecosystem. The EPCglobal Network brings visibility of assets, reduction in inventories, just-in-time inventory handling, reduction in labor and many other benefits.
While we appreciate the benefits of RFID and the EPCglobal Network, the amount of data that flows on the network and the overhead for maintaining the data becomes an obvious concern. Also, when a particular object moves from one level to the other in the supply chain, more information about the object would be added for its usage at the next level.
If your business was looking for efficient systems that are relatively cheaper, help you in reducing maintenance and reducing the overhead, and at the same time provide security, you need to attain a low cost of ownership.
Defining Low Cost of Ownership
The authors define Low cost of ownership as sharing of information common to organizations that would ensure better security and data exchange mechanisms. This low cost of ownership will result into smoother operations and eliminating the storage of repetitive data. This means information about any object that is common should be kept at one place rather than at each level in the supply chain storing the same information. The storage of repetitive data increases overhead. If an organization were given a choice of storing less data and, at the same time getting all the information they need through other systems, it will solve a lot of overhead problems. “Low cost of ownership has to do with improving process to remove waste, improve accuracy of inventory, by improving information quality”, says Steve Heap of RFID Exchange, an RFID consultancy firm based in Northern Virginia.
