INDUSTRY 4.

0 IN HEALTHCARE
SUPPLY CHAIN MANAGEMENT

Submitted By:
ABHISHEK MUKHERJEE (MBA19001) | AMAN AGRAWAL (MBA19005) | ANKIT GOEL (MBA19007) |
DEEPANSH GOYAL (MBA19024) | NIKITA SETH (MBA19047) | NISHANT SINGHAL (MBA19050)
Contents
1. Introduction..................................................................................................................................2
1.1 What is Supply Chain Management?....................................................................................2
1.2 What is Industry 4.0?............................................................................................................2
1.3 Industry 4.0 and Supply Chain..............................................................................................3
2. Role of Industry 4.0 in supply chain management.......................................................................4
2.1 Transparent Productivity......................................................................................................4
2.2 Real time update...................................................................................................................4
2.3 Data driven Approach...........................................................................................................4
3. Smart Supply Chain Management for Healthcare Sector:...........................................................5
3.1 Needs of Healthcare Sector..................................................................................................5
3.2 Outsourcing and Technology................................................................................................5
3.3 Hospital Supply Chain Management System (HSCM)...........................................................5
3.4 Smart SCM Technology.........................................................................................................6
4. Technologies for an Effective Healthcare Supply Chain:..............................................................7
4.1 IoT and RFID tracking............................................................................................................7
4.2 Drone Technology.................................................................................................................7
4.3 3D Printing Technology.........................................................................................................8
4.4 AI and Predictive Analysis.....................................................................................................8
4.5 Robotic Process Automation (RPA).......................................................................................9
5. CONCLUSION...............................................................................................................................10
6. REFERENCES................................................................................................................................10

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 1. Introduction

1.1 What is Supply Chain Management?

It is a network between the company and its partners (first ties suppliers, second-tier
suppliers, retailers) to produce the products or services and distribute them to the end
consumer. It includes different activities, people, entities, information, and resources. It can
also be defined as the step by step procedure of the product from its original state to the state
when it reaches the customer.

Different companies develop supply chains:

 To reduce their costs

 To remain competitive in the business landscape

Entities involved in the supply chain are:

 Producers or manufacturers
 Vendors or suppliers
 Warehouses, transportation companies, distribution centers
 Retailers

1.2 What is Industry 4.0?

Industry 4.0 stands for the Industrial Internet of Things (IoT). It focusses heavily on
interconnectivity, automation, machine learning, and real-time data.

Industry 4.0 sometimes referred to as smart manufacturing because it brings smart digital
technology into physical production and operations. It enhances the use of big data, machine
learning to create a better-connected ecosystem for companies that focus on manufacturing
and supply chain management. While every company and organization operating today is
different, they all face a common challenge—the need for connectedness and access to real-
time insights across processes, partners, products, and people.

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 1.3 Industry 4.0 and Supply Chain
The supply chain requires significant efforts and long-term investments for the transition to a
digitized, automated and fully interconnected channels. Enterprises can reach the next level
of operational effectiveness and realize significant cost reductions by bringing in the supply
chains online.

How the Industry 4.0 can make the supply chain more efficient:

 Greater Transparency and Accuracy

 Increased Interconnectedness and Collaboration
 Data-Backed Decision Making Leading to Cost Savings
 Improved Warehouse Management
 "Intelligent" Supply Chain

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 2. Role of Industry 4.0 in supply chain management
Industry 4.0 has entirely disrupted the supply chain of the manufacture as well as suppliers
and it is redefining the whole manufacturing process. The manufacturing industry is moving
towards a more digitized, agile, automated and efficient operation. In today’s world supply
chain have different aspects that connect product development, manufacturing, and
distribution system into one fully transparent and digitized system.

2.1 Transparent Productivity

There are a lot of suppliers that go into the supply chain system which is considered
fundamental for transparency. Lack of information can destroy the link and relationship and
can affect the efficiency of the processes. Complete transparency not only enables businesses
to respond quickly to any problem but also helps them to predict and react to the problem
ahead of time. In today’s world markets and businesses only survive on the proactive
response so that they can be ahead of their competition, predict the challenges on their way
and can safeguard their business in the same. Thus, digitization allows businesses to
acknowledge customer’s demands more effectively and quickly.

2.2 Real-time update

The key role of the digital supply chain is to open many potential networks and to provide
exposure to those concerned. This allows the business to respond in real-time which improves
the experience for manufactures as well as the customer. The integration and digitization of
operations eliminate silos in enterprises, allowing decision-makers across functions to
respond to disruptions in real-time.

2.3 Data-driven Approach

With the integration of automated end-to-end data aggregation, the decisions are more data-
driven and quantifiable. Complex supply chains generate more data, which companies can
use to drive greater efficiency. The potential value of that data is huge for logistics and
supply chain operations, Algorithms can help supply chain professionals identify new
opportunities to improve efficiency and innovate processes. In the supply chain, data offers
several ways to gain new insights that can have a big business impact.
Industry 4.0 has developed numerous new approaches to the delivery of goods through the
supply chain process. That will reduce the distribution time, control inventories with no
operation interruption. Digitization has made it possible to use innovative forecasting
methods to ensure that customers are provided with their needs and fulfilled in good time.

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 3. Smart Supply Chain Management for Healthcare Sector:
The supply chain of the Healthcare sector has remained mostly manual and human processes
have been used to a large extent in the fragmented network of suppliers and multiple
products. Supply chain management is essential to any business and there is always pressure
to increase efficiency, reduce costs and meet demands across facilities and networks in this
sector. The clinical supply chains have their delicate issues with the flow of information,
supplies, equipment, and services.

3.1 Needs of the Healthcare Sector

The unique needs of the healthcare sector require a dedicated and fully customized supply
chain solution. The quality and robustness of systems used to manage the healthcare products
have not reached the standard for supplies in hospitals and clinics. The Healthcare sector
deals with a critical inventory of medical supplies which is difficult to manage at
manufacturer and distributor levels. Even the most sophisticated hospitals rarely use the
technology that provides advanced networking, synchronization, and real-time collaboration
for the vast number of manufacturers and distributors. This is pointing towards the necessity
of the adoption of technologies that have slowed down in comparison to more technology-
intense industries like consumer goods or industrial manufacturing.

The emergence of SCM in the Healthcare sector

3.2 Outsourcing and Technology

Outsourcing has many benefits and helps companies focus more on their core competencies.
So, the hospitals and other healthcare establishments can focus more on the patients’ health
improvement and research by outsourcing the supply chain management functions to
technology-based companies available today.
A part or all the supply chain operation can be outsourced but without the right structure &
systems, there is a risk involved. Some critical factors for the success of an outsourced supply
chain operations are sophisticated controls, timely information & excellence in execution.
3.3 Hospital Supply Chain Management System (HSCM)
The HSCM has the major objective of managing the materials and equipment for effective &
timely use by doctors and paramedical staff to provide better healthcare to the patients. The
integration of internal hospital services with external suppliers should be done to provide a

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seamless experience. The task of the purchasing department is to procure the inventory at
lower prices without compromising on the quality, at the same time reducing the lead times
with the suppliers through competitive bidding, direct negotiation and bulk purchases
3.4 Smart SCM Technology
Improving products for the health systems by using technology to standardize products,
supplies & equipment to bring a more effective health system. Product standardization
involves improving operational efficiency, enhances financial performance and better clinical
results. Automated medical supply orders for physician works lead to automated medical
supply management processes which effectively reduce manual inefficiencies that increase
costs. These technologies track expenditures and provide huge opportunities for savings.
Better inventory management for surgery centers and seamless drug supply for pharmacies
are other ways to improve healthcare with technology solutions.

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 4. Technologies for an Effective Healthcare Supply Chain:
Technology plays an important role in providing advanced plans, synchronization, and
collaboration. The usage of advanced technology in the healthcare supply chain will increase
efficiency and reduce costs while also improving quality and care.

4.1 IoT and RFID tracking

Internet of things (IoT) is a system of interrelated devices embedded with sensors, software,
and connectivity to allow data transfer, integration and interaction through the network
without requiring human-to-human or human-to-computer interaction. GPS, RFID, UWB,
and Wifi are common technologies in IoT that help in material handling and supply chain.
Sensing technology such as RFID has helped in developing an asset tracking system that
saves hours of productivity of staff in tracking assets. It is also expanding to drive accuracy
and value in the healthcare supply chain. A real-time location system (RLTS) in the
healthcare system is used for tracking, locating and monitoring assets. Due to its precise
visibility and traceability in real-time, RLTS is used widely in the healthcare sector.
Automate inventory tracking with RFID smart cabinet not only streamlines in the healthcare
supply chain but also improved visibility. The smart cabinets give a real-time inventory
count, eliminate manual inventory counting, eliminate stock out and reduce inventory waste.
The staff required for managing inventory can be shifted to other primary activities of
delivering care to the patient.
4.2 Drone Technology
The last-mile delivery to the customers has emerged as a critical source of opportunity for
cost efficiency in the supply chain. Drones can be used to fulfill the last-mile delivery of
delivering vaccines, medications, supplies and blood samples to the source fast and
efficiently. It can also assist in specialized and customized deliveries in remote areas where
medical facilities are not present. Drones can be more useful in delivering medical supplies
than a vehicle (a more time-consuming process) in case of an outbreak of life-threatening
diseases. Using drones for delivery can reduce the cost of transportation and minimizing
inventory control as a central location rather than a distributed location network can be used
to keep supplies that can be delivered through drones to other locations.

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 4.3 3D Printing Technology
The opportunity for 3D printing rises due to the traditional supply chain constraints of the
industry, the efficiencies of mass production, the need for low-cost labor, increasing
transportation costs and so on. To maintain a competitive edge, more and more companies
have embraced 3D printing to create their products quicker.

The introduction of 3D technology will benefit the production of medical devices and the
healthcare supply chain. The 3D technology helps in producing low volume, customer-
specific and complex products by single printer only. This technology leverages digital
profiles to print materials and creates finished products in a variety of devices such as the
production of prosthetic implants, limbs, and dentistry. As a result, products can be produced
from a single printer and therefore reducing the steps in the production chain. Also, this
technology removes the need for complex distribution and logistics costs.
4.4 AI and Predictive Analysis
Artificial intelligence (AI) has changed the way we manage, analyze and leverage data in the
industry. As healthcare organizations develop more big data capabilities, it is time to move
from basic descriptive-analytic towards predictive analytics. Predictive analytic monitor
pattern and determine the likelihood of future events based on patterns in the historical and
real-time data.
Manual forecasting and Inventory management in the supply chain adds problems because
demand fluctuates to numerous markets and macroeconomic forces. Predictive analysis can
help organizations in leveraging statistical data in managing the supply chain by reducing
variation and gain more insights into demand patterns and supply utilization. With more
accurate forecasting, the data-driven decision can be made to negotiate price, reduce demand
and supply variation, and optimize inventory planning.

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 4.5 Robotic Process Automation (RPA)
Repetitive tasks, manual and labor-intensive work such as procure to pay, receive to replenish
and clinical integration adds time and cost to the healthcare supply chain and may lead to
human error. Adoption of RPA can automate such repetitive routine tasks that will enhance
efficiency, eliminate human errors and reduce overload.
RPA is also being introduced for order processing and payments. It is also used in
warehouses for performing warehouse processes of picking, sorting, storage, retrieval,
loading, and unloading.  Adoption of robots in warehouse logistics can be used long hours at
high speed before a mechanical failure and hence maximize productivity and efficiency.

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 5. CONCLUSION
Transformation into a digital supply chain can be enabled by having a clear strategy, new
competencies, and an advanced environment. The digital supply chain starts with an
understanding of the current operation’s knowledge as it's important to encapsulate the
technological advances. Healthcare is a very huge sector in India and there is pressure to
increase efficiency, reduction in costs and satisfy demands across facilities and networks.
Given the benefits prompted by technologies, the combination of technologies and existing
supply chain systems must be developed to revolutionize the healthcare supply chain.
Improving product standardization for health systems by using technology to standardize
products, supplies and equipment can improve operational efficiency, enhances financial
performance and results in better clinical outcomes. Although technologies offer tremendous
potential for the healthcare supply chain, the need for initial investments and financial
support post a big challenge. And, healthcare leaders should anticipate how to achieve a
balance between financial, efficiency, confidentiality and transparency with technologies in
the healthcare supply chain.

6. REFERENCES

 Impact of Industry 4.0 on Supply Chains — All You Need to Know | GEP, 2020
 Digital Supply Chain in Industry 4.0, 2020
 Smart Supply Chain Management for Healthcare Sector, 2020
 Technologies for an Effective Healthcare Supply Chain - SIPMM | Singapore Institute of
Purchasing and Materials Management, 2020

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