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Can IoT Improve Supply Chain Optimization in Healthcare?

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The IoT is about to remake large swaths of the world economy, but healthcare stands to gain a number of crucial benefits.

The Internet of Things (IoT) is poised to remake large portions of the world economy, perhaps none more so than the realm of supply chain management.

But while numerous industry verticals will no doubt benefit substantially from the digitized, automated movement of goods, the most impactful gains are likely to emerge in healthcare.

Few patients appreciate the role that effective, efficient delivery of medical systems and services plays in the cost of healthcare, let alone on overall wellness and the speed and thoroughness of recovery. (Read How Machine Learning Can Improve Supply Chain Efficiency.)

But the fact is the more the healthcare industry can improve its backend processes, the better it becomes delivering successful patient outcomes with less of a burden on both public and private finances.

Clear Insight

How, exactly, does the IoT improve the healthcare supply chain? In a word, visibility, says Boris Shiklo, CTO of ScienceSoft. By imbuing the entire supply chain – from the provision of raw materials to the development of finished products to final delivery to the end user – with data collection points and then linking these devices to powerful analytics engines, the IoT sheds light on what were previously a series of largely hidden processes.

Not only does this make it easier to pinpoint exactly where inefficiency and overlap exists in the chain, it allows managers to make more informed decisions when implementing corrections.


“The primary reason behind introducing technological innovations into the supply chain management is mitigating uncertainty,” he said. “Similar to landing a plane relying on the reports about past landings rather than accurate, real-time data from the radars, enterprises use a mix of after-the-fact spreadsheets and ERP findings as the basis for supply chain decision making.”

This means that most enterprise executives rely largely on intuition and guesswork when it comes to making crucial decisions regarding supply and logistics. More often than not this leads to ineffective or even detrimental changes that must then be corrected (again, with little or no insight into what is actually wrong), all of which tends to weaken processes over time either by subjecting them to constant change or by introducing unforeseen consequences upstream or downstream from the targeted step.

For most industries, this results in loss of revenue or failure to capitalize on new markets or emerging opportunities. In healthcare, however, this could literally mean the difference between life and death.

As tech writer Ainsley Lawrence notes on IoT for All, the ability to glean real-time information from supply chains means life-saving devices, medicines and services can be delivered quickly to those in the greatest need, as in a natural disaster or an outbreak of disease.

At the same time, the IoT streamlines the often convoluted processes of multiple providers, delivering a single fount of knowledge to all stakeholders when proper coordination is critical. Even at this early stage of IoT deployment, forward-leaning organizations are seeing dramatic improvements in areas like eldercare and electronic records management. (Read What Are the Top Driving Forces for the Internet of Things (IoT)?)

Going forward, we should see equally impressive gains in preventive care, through tools like predictive modeling, drug and device development, and diagnostics.

A key component in the healthcare industry’s deployment of IOT-driven supply chain management is blockchain. (Read 6 Ways Blockchain Is Being Used That Will Help You Understand It Better.)

According to the Healthcare Information and Management Systems Society (HIMSS), blockchain’s ability to maintain a trusted record of transactions has applications in operations, compliance, forecasting and other aspects of SCM, not just for systems and products but blood supplies, patient data, medications and virtually anything else related to patient care.

This will also improve the data management for the growing legions of consumer-devices, such as fitness trackers, blood analysis devices and health monitors, all of which are playing an increasingly vital role in patient health.

Handling with Care

The IoT also holds the potential to not only make supply chains more efficient but more reliable. Morgan Forde, associate editor at Supply Chain Dive, points out that healthcare supply chains are among the most regulated in the world, with strict requirements governing temperature, handling, scheduling and a wide range of other factors. (Read How Virtual Reality Is Changing Healthcare.)

For years, the industry has struggled to improve these conditions, particularly during the critical hand-offs from one segment of the chain to another. With the IoT, fragile chemical and biological agents can progress more reliably from source to destination, all while saving providers billions in lost product, duplication of effort and time to market.

Individual players in the healthcare field should be aware, however, that simply being the first to deploy the IoT into the supply chain does not necessarily guarantee a competitive advantage. Rather, true success will come from the way the technology is implemented and leveraged within the unique business model of each enterprise.

Unlike past technological innovations, the IoT is not a blanket technology to be deployed first and then utilized (or not) within current business processes. But it can do wonders to address clearly defined issues in the supply chain, and perhaps remake those processes, and even entire business models, in the bargain.


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Arthur Cole
Technology Writer
Arthur Cole
Technology Writer

Arthur Cole is a freelance technology journalist who has been covering IT and enterprise developments for more than 20 years. He contributes to a wide variety of leading technology web sites, including IT Business Edge, Enterprise Networking Planet, Point B and Beyond and multiple vendor services.