6 Steps to a Smarter, More Responsive Medical Device Supply Chain

Supply Chain
October 4, 2013

medical supply chainRX is transforming your medical supply chain from a cost of doing business into a source of competitive advantage.

Despite the ongoing debate about healthcare reform, there are two things we can all agree on. One, life expectancy has made quantum leaps in the last century, due in large part to advances in public health efforts and medical innovation. Two, there’s increasing pressure on the healthcare system as a whole to improve patient outcomes while reducing costs.

Not surprisingly, these dual pressures impact downstream providers like medical device manufacturers, who must find ways to minimize cost and waste while delivering a quality product. In turn, these challenges are shifting the industry’s focus on the supply chain and supply chain management systems, driving efforts to improve supply chain agility, inventory accuracy and cost control.

Of course, there are other challenges. If you’re a medical device manufacturer, you likely wrestle with some or all of these issues on a daily basis:

  •  Sluggish revenue growth and increasing margin pressures
  • Greater product and supply chain complexity
  • Changing distribution networks and go-to-market strategies
  • The flattening effects of globalization (increased competition)
  • Stringent regulatory and compliance requirements

So how do you keep your medical device supply chain healthy? Consider these six steps to transform your supply chain into a source of competitive advantage:

 1. Optimize to reduce costs and drive efficiency

As margin pressures and demand for just-in-time fulfillment grow, take steps to improve supply chain efficiency, from sourcing, production and fulfillment to product postponement, packaging and reverse logistics.

Possible strategies include: implementing systems to process and ship orders more efficiently, managing and reporting on performance, aligning with network requirements and optimizing for cost and service. Look for ways to centralize shipment planning and execution. Use network optimization and planning tools to redesign/re-engineer your network. Use visibility tools to track products and events. Gain economies of scale by co-locating packaging and warehousing or using shared warehouses to reduce costs. Implement continuous improvement initiatives to accelerate quality and efficiency and systems to improve inventory accuracy.

2. Make sure you’re in compliance with regulatory requirements 

The manufacture and distribution of medical devices is subject to understandably rigorous regulatory requirements. Make sure your packaging, transportation and distribution systems meet all requirements for safely moving sensitive products through the supply chain. Key regulations that demand compliance are:

* FDA regulations: 21 CFR 820, CFR Part 11 for electronic records and signatures

* Good Manufacturing Practices (CGMP) dictating measures that must be taken to ensure product integrity, from manufacture to warehousing and transport 

* C-TPAT certification to ensure supply chain security

*International industry standards: ISO9001, ISO13485 (Medical Device Quality Management System), IEC 61215 and IEC 61646

Protecting the condition and integrity of products may mean tightly managing product packaging, controlling access to critical components, implementing processes to ensure sanitation, monitoring temperature/climate conditions while goods are in transit and heightening security for cross-border activities. You may want to partner with a third-party logistics provider experienced in handling, tracking, storing and transporting sensitive medical products.

3Flex to meet changing transportation and distribution requirements

As customers demand access to products across multiple channels, make sure you can warehouse, fulfill and deliver orders across distribution, retail, end-user and primary care channels.

Your warehouses should be compliant, secure and able to distribute parts, components and products wherever they’re needed. In some situations, they may also have to be temperature/climate-controlled. To get products to their destinations when and where they’re needed, consider an integrated transportation solution that combines common carriers and a dedicated fleet to keep up with fluctuations in volume without missing a beat. 

4. Establish platforms to enhance visibility from end to end

Visibility is critical in the medical device industry. Make sure you have the visibility you need to align inventory levels with supply and demand and stay on top of delivery status across the supply chain. Consider implementing a Control Tower tool to enable end-to-end visibility across geographies and supply chain partners, centralize demand data, track medical devices and maintain records/history.

5. Go Lean with a streamlined, flexible manufacturing model

By leveraging Lean guiding principles and practices within a flexible manufacturing framework, you can optimize quality, eliminate waste, and adapt seamlessly to shifts in demand. You can change manufacturing and distribution schedules to handle multiple products and SKUs. With a flexible, cross-trained workforce you can move employees around to accommodate schedule changes as different areas of your production operation must ramp up or down.

6. Put processes in place to address product complexity

Whether you’re managing surgical instruments, test kits or large diagnostic devices, medical devices are increasingly complex. As a result, all aspects of logistics are more challenging, from just-in-time manufacturing, sequencing and line-side delivery to packaging, kitting and labeling and managing recalls and returns. Consider working with a partner that can support these operations, along with configuration, assembly and postponement.  

By taking these steps, you’re in a better position to lower total delivered cost, keep supply chain partners in sync, distribute products across multiple channels, improve operational agility and deliver a superior customer experience.

Could you benefit by optimizing your medical device supply chain?

To learn how implementing a LEAN culture in your medical supply chain can lead to reduced costs and improved efficiency, download our latest LEAN Healthcare White Paper by clicking below.

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Written by Steve Sensing, VP & GM, Hi-Tech & Electronics, Ryder Supply Chain Solutions

Steve Sensing is Vice President and General Manager for Ryder System, Inc., a Fortune 500 global transportation and supply chain management solutions company.  He is responsible for Ryder Supply Chain Solution’s Hi-Tech and Electronics Vertical global business unit, which serves Commercial and Consumer: Electronic, Telecommunication, Medical, Technology, & Appliance Clients. Most recently, Mr. Sensing was Group Director of Operations, for Hi-Tech and Electronic clients in the US.  This included responsibility for tactical execution of integrated supply chains for multiple clients, business owner in sales expansion and new pursuits and integration of complex information systems into the daily operations. Mr. Sensing joined Ryder in 1992 and has served with distinction in a number of capacities within Ryder, including Group Manager Dedicated Contract Carriage, Director of Customer Logistics Distribution Management and Director Operations for Integrated Supply Chain Solutions.

 

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