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MTS Blog: Making RFID Work for Your Medical Device Business

Analysts forecast that the global radio frequency identification (RFID) market will grow 11 percent from 2016 to 2020.  A key driver of that growth is the need for enhanced inventory management.[1]  In the medical device industry, RFID is important because the technology hits on two critical components: increased patient safety and improved bottom lines.  But, what’s the most strategic and cost-effective way for medical device manufacturers to incorporate RFID for long-term success?

The precursor to today’s RFID technology was invented by Mario Cardullo in the early 1970s and used by the New York Port Authority as part of an automated toll collection system.[2]  Today, RFID is employed in numerous industries to track products for a variety of reasons.  In the medical device industry, the benefits of using RFID include: improved product traceability, reduced supply chain management challenges, UDI compliance, increased patient safety, data collection, loss prevention, and brand protection.[3]

For medical device manufacturers, embedding RFID in products is just the beginning of the multi-layered process of making the technology operational, cost-effective, and ultimately valuable.  “Valuable” is the brass ring, of course, and what makes RFID valuable in the medical device industry is a combination of traceability, ease of use for customers, and collection and utilization of data.

There are a number of pitfalls that can trip up medical device manufacturers.  Maybe they embed their product with RFID, but the warehousing and distribution arm is not equipped to effectively use the technology.  Often hospitals are unwilling to house and manage RFID readers and cabinets from various sources.  Typically, the software needed to pull all the pieces together and deliver the traceability and data collection and reporting functionality is left out of the equation.  If a medical device maker encounters any of these pitfalls, they are not reaping the full rewards of RFID.

The solution for medical device manufacturers is to partner with a third-party logistics provider (3PL) who provides three critical pieces of the puzzle.  A 3PL, already in service to other medical device manufacturers, brings expertise to the use of RFID in warehousing and distribution, incurs the costs of readers and cabinets in hospitals and consolidates this aspect of the supply chain, and takes RFID data to the next level with a medical device inventory management software system that offers real-time visibility as well as sophisticated data collection and reporting.  The short-term results are enhanced ease of use for hospitals, decreased loss of inventory, more efficient inventory turns, and improved processes.  The broader effects are big savings in inventory costs, savings in labor costs, and enhanced quality control for better patient safety.

The medical device industry is sometimes accused of being behind the times in terms of systems and processes.  As medical device manufacturers become more interested in the possibilities RFID offers, they need to be strategic about the full prospect of RFID from manufacturing to the point of care and beyond.  Many manufacturers shy away from the steep costs associated with RFID.  With a considered approach that includes a partner who can smooth the way, medical device manufacturers can justify the expense of RFID and experience the full value of a technology that is here for good, like it or not. 

[1] RnR Market Research.  “Radio Frequency Identification Market (RFID) to Grow at 11%.”  Advantage Business Media.  June 8, 2016.  Web.  July 2017.

[2] Cardullo, Mario.  “Genesis of the Versatile RFID Tag.”  April 21, 2003.  Web.  July 2017.

[3] Horton, Ken.  “RFID: An Invisible but Integral Tool for Medical Device Tracking.”  Advantage Business Media.  May 13, 2016.  Web.  July 2017.