Does your medical supply chain need a checkup?

Healthcare, Lean Guiding Principles, Network Design, Supply Chain, Technology
February 11, 2014
How to minimize cost and waste and drive better patient outcomes

Healhcase Supply ChainRunning a medical or healthcare supply chain? Has it been a while since you took a closer look at your logistics and transportation networks? It may be time for a routine physical – especially when you consider the dynamic nature of today’s healthcare environment and a growing focus on price pressures, efficiency, security and compliance.

The impact of The Affordable Care Act alone is driving many medical device manufacturers to take the pulse of their logistics networks. As decision-making about devices shifts from physicians to procurement operations and patients, price and revenue pressures are driving the focus on efficiency and cost reduction.

Like other downstream providers, competing smarter means streamlining operations. And the supply chain is a great place to start. Taking your supply chain’s “temperature” can be a smart way to identify potential “health risks” and turn a cost of doing business into a source of advantage. The goal is to identify weak links in your supply chain and potential remedies – and assess the potential payback of improvements.

Here’s a five-step strategy for checking the health of your supply chain and identifying potential remedies to improve visibility, inventory accuracy, fill rates, on-time delivery and cost impacts.

Start the exam by asking:

  • How healthy is your revenue growth? Are profit margins being squeezed?
  • Are your products and the supply chain that moves them too complex?
  • What about your distribution networks and go-to-market strategies?
  • Do the flattening effects of globalization make it tougher to compete?
  • Struggling to keep up with rigorous – and fast-changing – regulatory requirements?

5 steps to a healthier medical supply chain…

1. Boost efficiency to improve supply chain fitness

From sourcing, production and fulfillment to product postponement, packaging and reverse logistics, look for opportunities to improve efficiency. This might mean processing and shipping orders more efficiently, better managing performance, or optimizing for cost and service.

2. Understand your regulatory environment

FDA regulations and cGMP protocols governing the manufacture and distribution of medical devices are rigorous given the sensitive nature of products like pacemakers, insulin pumps and prosthetic hips or knees. It’s important to have a firm understanding of applicable regulations. The short list includes:

  • 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

3. Make sure your logistics network is in peak condition

Can you warehouse, fulfill and deliver orders across distribution, retail, end-user and primary care channels? Are your warehouses compliant? Secure? Temperature or climate-controlled to meet regulations? Can you get products to market on time and without damage? Consider a transportation solution combining common carriers and a dedicated fleet to handle the ups and downs of demand.

4. Improve end-to-end visibility

Given the stringent nature of the medical device regulatory environment, you need visibility into every aspect of your supply chain: from sourcing, manufacturing and packaging to shipping and distribution. With the right visibility, you can sync inventory levels with demand and track delivery status throughout the supply chain. Consider a Control Tower solution to help you gain visibility, centralize demand data, track device movement and maintain records/history.

5. Get in shape with a Lean and flexible manufacturing model

Want to optimize quality, eliminate waste, and adapt seamlessly to shifts in demand? Lose the manufacturing and supply chain “fat” by going Lean. Look to tune manufacturing and distribution schedules to handle multiple products and SKUs. Cross-train your workforce to accommodate schedule changes as different areas of your production operation ramp up or down.

About the Author

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

Steve 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 Ryder Dedicated, Director of Customer Logistics Distribution Management and Director Operations for Integrated Supply Chain Solutions.

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