Monday, March 24, 2014

Supply Chain Strategies for Medtech Companies

Before the senior director of the global supply chain at Edwards Lifesciences’ presentation at MD&M West 2014 Conference in Anaheim, CA, he talked about the theme of his session which was the best practices for medical device companies on supply chain strategies in the face of regulatory, technology, and margin-pressure challenges, as well as legislative changes.
     The senior director explained that innovation is and will always boost medical device companies. However, one shall notice that there is another key factor in the healthcare industry: operational and supply chain efficiencies, which is requiring transformational strategies for managing the supply chain. In addition, regulatory requirements are becoming more detailed and more constraining. At the same time, there are increasing margin pressures and legislative changes. All of these different factors are forcing companies to reevaluate their operations and supply chain strategies.
The senior director advises that innovation is not enough in the face of regulatory forces, legislative changes and margin pressures. In order to remain leaders in the medical device industry, companies should improve quality, lean manufacturing operations, distribution efficiencies, and inventory optimizations. Some areas to be focus on: global sales and operations planning platform, solid manufacturing improvement program (that includes lean manufacturing principles), determining how to introduce new products to the market and supplier risk management.

Monday, March 10, 2014

Outsourcing and Innovation: Medtech OEMs

Outsourcing seems to be an increasing trend in the medical device industry and it’s expected to grow by 40%, reaching US$ 12 billion by 2018. Due to the pressure companies are under to develop devices that offer real value and not just incremental benefit, OEMs are focusing on innovation and core capabilities.
As a result, medical devices companies are asking more of their contract partners, responsibilities from front-end design to back-end services including warehousing, distribution, and regulatory assistance. According to the Millennium Research Group report, “overall trends in the medical device outsourcing space indicate that [contract manufacturers] are broadening their range of services, growing organically or through acquisition to become one-stop-shop manufacturers.”
     Another trend of OEM strategy is no longer to manufacture devices in China or Mexico for distribution in the United States and Europe. Instead, these companies are making products in emerging countries for regional and local distribution.

“To line up with our global customers, who are manufacturing in Asia for Asia, Europe for Europe, and the Americas for the Americas, we need to have capabilities in each of those geographies.”
Phillips-Medisize president and CEO Matt Jennings