Medical device companies and acute care facilities have traditionally relied on manual inventory management approaches. However, this is no longer viable for many reasons and forward-thinking companies are embracing automated solutions instead. These solutions not only help to track inventory items, but they also save time, money, and improve relationships between medical device companies and acute care facilities.


Manually tracking medical devices is out-dated and fraught with challenges


Manual tracking of medical devices introduces a number of challenges, some of which emerged only within the last several years. “Top of mind most currently is the lack of labor,” explained Joe Pleshek, CEO of Terso Solutions. Many medical device companies traditionally rely on sales representatives to check inventory while onsite with a customer. However, recent staffing shortages and pressure to reduce costs are forcing companies to change their approach. “Medical device manufacturers are looking at right-sizing their sales forces,” Pleshek continued. “They just cannot have those folks spending time counting items manually.”

Another major issue with manual tracking is human error. “Anytime you are doing something manually, it is ripe for errors,” Pleshek described. There are many areas of healthcare that moved from manual tracking to automation due to the highly controlled nature of the products involved. For example, in the blood product supply chain there is a need to manage different products, varying expiration dates, and inventory assigned to individual patients (Gunawardana, K.D.R. et al, 2020). To avoid manual errors resulting in blood shortages and increased risk of mortality, as a best practice health systems manage their blood supplies using automation.


Over-stocking is not the answer


In the past, medical device companies and health systems relied on over-stocking inventory to prevent running out. However, with the increased pressure to save money that approach is no longer viable. “Inventory is money,” Pleshek stated. “Inventory is a balance sheet item that could be used to buy another CT machine or expand the hospital.”

One area of healthcare that historically relied on overstocking is pharmaceuticals. Drug shortages are a major issue in hospital systems and one cause is inefficient supply chains (Zwaida, T. et al, 2021). Many healthcare organizations try to solve this problem by keeping ‘safety stock.’ However, this approach increases the cost to buy, store, and manage expiration of drugs. “Because of product obsolescence, expiry, and chances for inventory to be compromised, you end up with a lot of waste,” Pleshek explained.

"Those medical device manufacturers that are proactive can have an advantage over their competition."

Automation provides the solution and improves collaboration


Leading-edge companies are turning to fully-connected, automated inventory management solutions that use sensing technologies like UHF RFID to provide real-time information across the supply chain. “To know, without manual intervention, where an inventory item has been or when it has been consumed can really drive value into the process,” Pleshek stated. “That item can be replenished quickly and efficiently, which can drive down the amount of inventory you carry.”

Technology like UHF RFID has the capability of providing real-time visibility to high-dollar inventory across complex systems, including acute care settings and in the field. This approach could improve the relationship between medical device companies and acute care facilities. “The technology can enable collaboration,” Pleshek described. “For years, what we have heard between the medical device manufacturers and the healthcare providers is, ‘We want to collaborate. Let’s talk about supply chain and building better relationships.’ Really what they meant was they wanted a lower price. But that is changing and one of the areas of collaboration is sharing inventory information, which can result in time and cost savings.”


Medical device companies need to keep pace with providers


Even before the COVID-19 pandemic, major health systems were in the process of adopting technology to support processes from patient admission to revenue cycle. The pandemic accelerated the trend. “In talking with health care providers, they are definitely recognizing the significance of automated processes relating to their systems,” Pleshek recounted. “Medical device manufacturers need to understand that because it’s a real opportunity for them to implement point-of-use sensing technology.” Medical device companies that continue to rely on manual tracking will likely find themselves at a disadvantage in the future. “Those medical device manufacturers that are proactive can have an advantage over their competition,” Pleshek concluded.