DHL Healthcare and Medtronic Mexico – A case study on the management of hydrocephalus implants

Background

DHL’s Life Sciences & Healthcare division offers end-to-end supply chain solutions to improve the efficiency and costs involved in managing high value implants. Their customer, Medtronic Mexico, wanted to find a logistics and management solution for their hydrocephalus implants, which are used in expensive brain surgery procedures for children.

Hydrocephalus shunt surgeries can be first time implantations, or shunt replacements, that are fitted into an existing system. 4,657 Hydrocephalus Shunting Procedures were performed in Mexico in 2022. Ensuring the continuous supply of hydrocephalus implants was crucial for Medtronic and the hospitals it services, in order to ensure prompt treatment, and prevent the suffering of children.

 

Hydrocephalus shunts

 

Hydrocephalus shunt - specialist implant management in hospitals
Hydrocephalus shunt – specialist implant management in hospitals

 

Some information about the specialist hydrocehalus shuts used in brain surgeries.

Hydrocephalus is a condition where excess cerebrospinal fluid (CSF) builds up in the brain, causing increased pressure. Hydrocephalus shunts are implanted during brain surgery to divert the excess CSF away from the brain, relieving the pressure and preventing further complications.

During the procedure a shunt is placed in the brain to divert excess CSF away from the brain to another part of the body where it can be reabsorbed and excreted, relieving pressure on the brain.

A typical hydrocephalus shunting system consists of several components, including a catheter placed in the ventricles to collect CSF, a valve mechanism to regulate CSF flow, and a second catheter that directs CSF to another part of the body, such as the abdominal cavity or the heart.

 

 

 

Fourth Party Logistics Model

The 4PL model, short for Fourth Party Logistics, refers to a supply chain management system where a fourth-party logistics provider manages resources, technology, and capabilities to design, build, and run comprehensive supply chain solutions on behalf of a client.

Unlike traditional logistics providers, a 4PL provider acts as an integrator, coordinating multiple logistics services and providers to optimize efficiency, reduce costs, and improve overall supply chain performance for their clients. They typically oversee end-to-end supply chain operations, including transportation, warehousing, inventory management, procurement, and distribution, often leveraging advanced technologies and data analytics to drive continuous improvement and strategic decision-making.

In the healthcare industry, the 4PL model, also known as Medical Stock Replenishment as a Service (SRS), is a specialized approach tailored specifically to healthcare needs. SRS involves outsourcing the management and replenishment of medical stock to a third-party provider. This provider is tasked with monitoring inventory levels, forecasting demand, and ensuring timely replenishment of medical supplies to prevent stockouts or overstocking.

SRS often includes advanced features such as demand forecasting algorithms, real-time monitoring, and customized reporting, all aimed at optimizing inventory levels and streamlining supply chain operations in healthcare facilities. DHL was able to provide and reinforce these capabilities through IDENTI’s RFID technology, which provides real-time implant tracking of remote inventory while activating advanced AI capabilities.

SRS, facilitated by DHL and powered by IDENTI technology, enables hospitals to delegate inventory management to DHL. With this system, DHL gains real-time visibility into every storage facility, down to each cabinet, in every hospital room.

Upon receiving alerts for replenishment, DHL promptly restocks the necessary inventory. This includes all medical supplies, implants, devices, and point-of-use charge capture data, meticulously tracked in real-time by DHL.

 

About DHL’s Life Sciences & Healthcare division

The division is specialized sector within the DHL group that focuses on providing logistics solutions tailored to the unique needs of the pharmaceutical, biotech, and medical device industries. The division leverages DHL’s extensive network and expertise in logistics to ensure the safe, secure, and efficient delivery of healthcare products and supplies, including pharmaceuticals, vaccines, medical devices, and diagnostic equipment.

 

Challenges

Medtronic Mexico had the following challenges:

  • They relied heavily on DHL as their international logistics provider and wanted feel more confident in DHL’s ability to respond to providers’ demand for Hydrocephalus shunts.
  • They wanted to maintain continuous stock availability, so that no child had to wait for surgery due to inventory shortages.
  • Items were manually managed, which was inefficient and resulted in expiry management issues with items expiring on the shelves and contributing to high wastage costs.
  • Crude inventory lists did not provide the insight needed for more informed management. Medtronic was not on-site and relied upon hospital data.
  • The previous storage system lacked tight securely, resulting in implant theft that contributed to high levels of inventory loss.
  • Slow documentation and elongated workflows lead to elongated “usage to invoice” timescales and consequently, long payment cycle times.
  • Operating room data lacked integrity and data disagreements caused disputes between parties and took time to resolve.

 

DHL wanted to find an automated inventory management solution that allowed them to grow their own business, while at the same time solving their customer’s recurring problems.

“By leveraging automation and fostering trust among partners, we’ve achieved unprecedented levels of efficiency and transparency. This joint effort has not only optimized our inventory management but also paved the way for expansion and growth.”

 

Goals

With such a lot at stake, it was crucial to present a solution that worked for all parties.

DHL’s objectives were:

  • To introduce automated storage cabinets that deliver real-time, end-to-end visibility of consignment inventory and achieve precision management of local stock.
  • To provide Medtronic with real-time inventory data, giving them greater visibility and control of their inventory.
  • To use enhanced inventory vision and data analytics to inform inventory management decision-making, optimize the supply of inventory to Medronic Mexico’s medical representatives, and the hospitals they service.
  • To provide added value to Medtronic Mexico and fully meet their inventory management needs.
  • To extend DHL’s services from third-party logistics provider (3PL) to fourth-party logistics provider (4PL), in order to offer full supply chain management.

 

Solution

DHL Healthcare and Medtronic Mexico - A case study on the management of hydrocephalus implants | IDENTI Medical

 

 

DHL reviewed the market and selected IDENTI’s Smart Cabinet system.

This UHF RFID cabinet, powered by AI cloud management software, was felt to be the most efficient and cost-effective solution.

TotalSense provides precise implant tracking, real-time visibility, automated stock replenishment, and data to support smarter inventory management capabilities.

DHL were keen to implement a labor-lite system that provided a fully digital solution and reduced the errors and inefficiencies they were experiencing.

A vital factor in the selection of TotalSense was the shared stock visibility achieved for all supply chain stakeholders – this meant that all parties were using the same central data and were able to work with greater trust and collaboration.

 

 

 

 

 

 

Process

The project’s implementation stages included:

  • Agreeing a partnership team for implementation planning with Medtronic.
  • Project planning with all partners covering project definition and user requirements.
  • Review and assessment of current processes and technologies.
  • Visit to hospital sites where the smart cabinets were to be located, and discussion on facility preparation and roll-out with local staff.
  • System development and configuration, data mapping and testing.
  • Preparation of the integration of software, including directory integration and user set up.
  • System testing, validation of data mapping and final configuration.
  • Hardware and software installations at facility sites, followed by functional and performance testing
  • User training, device tagging, and launch.

 

Partnership Approach

IDENTI’s work in Mexico needed to meet the needs of 3 levels of supply chain stakeholders:

  • The logistics company (DHL)
  • The distributor (Medtronic Mexico)
  • The hospitals working with Medtronic

 

The solution needed to address the diverse requirements of each of these partners.

The ability to collect and share data between all parties was crucial to the success of the project. IDENTI was able to put local hardware in place and use cloud software to process and share the data, so that everyone had full real-time visibility of the inventory stored in the on-site cabinets, and also benefited from data analytics.

 

Results and Outcomes

IDENTI’s TotalSense cabinet is now installed in 9 Mexican hospitals and is used for managing consignment inventory for Medtronic Mexico.

The RFID smart cabinet solution has achieved the following benefits:

The collaboration between all parties involved in the supply chain management process led to significant improvements across various key areas. Firstly, there was enhanced stock visibility, with comprehensive item listings for both stock and usage, allowing for better inventory management. Additionally, the implementation of automated item-level management drastically reduced the number of expired items in stock to zero, ensuring better quality control.

Real-time tracking at the item level provided detailed insights into usage patterns, including who removed the item, for which patient, and for which surgery. This facilitated easy identification of recalled or expired products, enhancing patient safety. Moreover, automated replenishment features helped prevent shortages and stockouts by flagging up when individual items required replenishment. This proactive approach improved operational efficiency and ensured seamless supply chain operations.

Security measures were also tightened, with restricted access and user tracking helping to address implant theft. This resulted in a significant reduction in inventory losses by 21%. The implementation of a joint vision fostered increased trust and transparency among supply chain partners, leading to a shared understanding of the supply chain status and a reduction in disputes to zero.

Streamlined processes and joint agreements on data improved billing efficiency, reducing “usage to invoice” timescales by 32%. Furthermore, the system generated real-time metrics, inventory reports, and data insights, empowering stakeholders with valuable information for informed decision-making. As a result of these enhancements, DHL was able to expand its supply chain management services into a 4PL service, supporting continued growth and scalability.

 

Find out more about gaining full control of your specialist implants and fostering closer partnership relationships using UHF RFID cabinet technology.

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FAQ: DHL Healthcare and Medtronic Mexico – A case study on the management of hydrocephalus implants

DHL Healthcare, a logistics provider, and Medtronic Mexico, a medical device company, partnered to implement IDENTI’s Smart Cabinet system. This UHF RFID cabinet solution provided real-time inventory tracking, automated replenishment, and data analytics for better management of hydrocephalus implants.

The technology enabled both parties, plus the hospitals they worked with, to have common vision of central data, gaining a shared understanding of stock-levels and usage, and enabling more proactive expiry management too.

Remote inventory management, with lack of permanent on-site logistics staff, relies upon implant tracking technology to keep all stakeeholders in the loop. Automated inventory tracking technology becomes the “eyes” of all parties, clearly indicating exact stock levels and item details (including UDI), as well as clarifying when product leave stock and are used.

Medtronic faced the challenges faced by many medical device companies when managing consignment inventory remotely.

Challenges included:

  • Maintaining real-time stock visibility
  • Ensuring continuous availability of inventory
  • Dealing with inefficient manual inventory management, which lead to expiry management issues, wastage etc.
  • Lack of inventory insights due to unreliable and out-of-date data, as well as lack of technology to process and interpret supply chain data and convert it into business intelligence.
  • Slow documentation workflows which resulted in payment delays.
  • Data disagreements between parties due to lack of shared vision, particularly relating to usage.

The use of RFID smart cabinet technology solved all of these challenges by:

  • Giving all parties real-time stock-level data
  • Providing reports to support optimized inventory management and a perpetual, balanced inventory.
  • Providing a common understanding of utilization for streamlined, swifter billing and payment
  • Business intelligence for informed planning and management of high value implants

The use of technology enabled all parties to have joint vision and work collaboratively.

Introducing TotalSense RFID cabinet enables providers, and their supply chain partners to achieve digital, item-level management of their high-value inventory.

The system provides real-time visibility and generates meaningful metrics, reports, and data insights to support clinical, operational and financial management of inventory. The smart cabinet solution is designed to work for both hospitals managing their own stockk on-site, as well as for vendor-owned stock, for example consignment inventory stored on the hospital site but managed remotely by the medical device company, vendor or distributor.

The solution led to enhanced stock visibility, reduced expired items, real-time usage tracking, improved security and reduced inventory loss, as well as streamlined billing processes, reduced disputes, and valuable data insights for more informed decision-making. The new inventory management technology enabled DHL to expand into a 4PL service, as the data provided was able to drive efficient and effective inventory management decision-making to optimize the inventory on-site by achieving data-driven procurement that enabled demand-driven restocks.

The 4PL model involves a logistics provider managing and integrating multiple logistics services and providers to optimize the entire supply chain for a client.

In healthcare, 4PL is known as Medical Stock Replenishment as a Service (SRS), outsourcing inventory management and replenishment to a third-party provider.

With this model of remote inventory management technology plays a vital role in facilitating real-time, accurate stock-level visibility, as well as consumption data, linked to the case.

When this basic supply chain data is visible and agreed by all parties it leads to smooth and seamless supply chain management and efficient inventory management.

RFID technology enables real-time tracking of medical supplies and implants at the item level, providing accurate inventory data, automated replenishment alerts, expiry management, and improved security through restricted access and user tracking.

The use of 12 UHF RFID sensors in IDENTI’s smart cabinet ensures enhanced inventory tracking capabilities, however the item is placed in the cabinet. Full tracking, that takes account of the “real-world placement” of products and doesn’t require precise product stacking compliance, optimizes the monitoring of all items stored in a smart cabinet.

Items, including full UDI data, are digitally documented as in stock, with the location of each item, in terms of department, and cabinet, clearly being indicated, for ease of location and access. Nurses can quickly find and pick the items they need, using the app to locate every product. This technology reduces the time spent by nurses managing, monitoring and picking inventory.

 

Automated inventory management solutions offer benefits to healthcare providers, enabling them to gain better visibility, control and management of their medical inventory.

Automated medical inventory management systems such as the TotalSense RFID cabinet, are able to collect and process stock data. This delivers:

  • Reduced shortages, stockouts and overstocking
  • Improved patient safety through better recall and expiry management and perpetual stock availability
  • Enhanced operational efficiency, with reduced labor but increased accuracy and precision.
  • Streamlined billing processes for swifter payments.
  • Valuable data insights for informed planning and management decision-making.

Real-time medical inventory visibility improves trust, transparency and synergy between supply chain partners.

RFID smart cabinet technology provides all stakeholders with shared, real-time visibility of inventory levels and usage data, enabling supply chain partners to work a shared understanding of the supply chain status, reducing disputes and fostering closer collaboration.

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About the author

Sharona is Marketing and Content Manager, charged with telling the world about IDENTI Medical, and its range of data sensing solutions. Sharona has worked in a range of industry settings, including healthcare organizations and SAAS companies. Sharona is also responsible for organizing network events across the US, creating opportunities for healthcare professionals to meet the team and see our products in action.

DHL Healthcare, a logistics provider, and Medtronic Mexico, a medical device company, partnered to implement IDENTI’s Smart Cabinet system. This UHF RFID cabinet solution provided real-time inventory tracking, automated replenishment, and data analytics for better management of hydrocephalus implants.

The technology enabled both parties, plus the hospitals they worked with, to have common vision of central data, gaining a shared understanding of stock-levels and usage, and enabling more proactive expiry management too.

Remote inventory management, with lack of permanent on-site logistics staff, relies upon implant tracking technology to keep all stakeeholders in the loop. Automated inventory tracking technology becomes the “eyes” of all parties, clearly indicating exact stock levels and item details (including UDI), as well as clarifying when product leave stock and are used.

Medtronic faced the challenges faced by many medical device companies when managing consignment inventory remotely.

Challenges included:

  • Maintaining real-time stock visibility
  • Ensuring continuous availability of inventory
  • Dealing with inefficient manual inventory management, which lead to expiry management issues, wastage etc.
  • Lack of inventory insights due to unreliable and out-of-date data, as well as lack of technology to process and interpret supply chain data and convert it into business intelligence.
  • Slow documentation workflows which resulted in payment delays.
  • Data disagreements between parties due to lack of shared vision, particularly relating to usage.

The use of RFID smart cabinet technology solved all of these challenges by:

  • Giving all parties real-time stock-level data
  • Providing reports to support optimized inventory management and a perpetual, balanced inventory.
  • Providing a common understanding of utilization for streamlined, swifter billing and payment
  • Business intelligence for informed planning and management of high value implants

The use of technology enabled all parties to have joint vision and work collaboratively.

Introducing TotalSense RFID cabinet enables providers, and their supply chain partners to achieve digital, item-level management of their high-value inventory.

The system provides real-time visibility and generates meaningful metrics, reports, and data insights to support clinical, operational and financial management of inventory. The smart cabinet solution is designed to work for both hospitals managing their own stockk on-site, as well as for vendor-owned stock, for example consignment inventory stored on the hospital site but managed remotely by the medical device company, vendor or distributor.

The solution led to enhanced stock visibility, reduced expired items, real-time usage tracking, improved security and reduced inventory loss, as well as streamlined billing processes, reduced disputes, and valuable data insights for more informed decision-making. The new inventory management technology enabled DHL to expand into a 4PL service, as the data provided was able to drive efficient and effective inventory management decision-making to optimize the inventory on-site by achieving data-driven procurement that enabled demand-driven restocks.

The 4PL model involves a logistics provider managing and integrating multiple logistics services and providers to optimize the entire supply chain for a client.

In healthcare, 4PL is known as Medical Stock Replenishment as a Service (SRS), outsourcing inventory management and replenishment to a third-party provider.

With this model of remote inventory management technology plays a vital role in facilitating real-time, accurate stock-level visibility, as well as consumption data, linked to the case.

When this basic supply chain data is visible and agreed by all parties it leads to smooth and seamless supply chain management and efficient inventory management.

RFID technology enables real-time tracking of medical supplies and implants at the item level, providing accurate inventory data, automated replenishment alerts, expiry management, and improved security through restricted access and user tracking.

The use of 12 UHF RFID sensors in IDENTI’s smart cabinet ensures enhanced inventory tracking capabilities, however the item is placed in the cabinet. Full tracking, that takes account of the “real-world placement” of products and doesn’t require precise product stacking compliance, optimizes the monitoring of all items stored in a smart cabinet.

Items, including full UDI data, are digitally documented as in stock, with the location of each item, in terms of department, and cabinet, clearly being indicated, for ease of location and access. Nurses can quickly find and pick the items they need, using the app to locate every product. This technology reduces the time spent by nurses managing, monitoring and picking inventory.

 

Automated inventory management solutions offer benefits to healthcare providers, enabling them to gain better visibility, control and management of their medical inventory.

Automated medical inventory management systems such as the TotalSense RFID cabinet, are able to collect and process stock data. This delivers:

  • Reduced shortages, stockouts and overstocking
  • Improved patient safety through better recall and expiry management and perpetual stock availability
  • Enhanced operational efficiency, with reduced labor but increased accuracy and precision.
  • Streamlined billing processes for swifter payments.
  • Valuable data insights for informed planning and management decision-making.

Real-time medical inventory visibility improves trust, transparency and synergy between supply chain partners.

RFID smart cabinet technology provides all stakeholders with shared, real-time visibility of inventory levels and usage data, enabling supply chain partners to work a shared understanding of the supply chain status, reducing disputes and fostering closer collaboration.