Why MedTech Companies are Still Struggling with their Supply Chains and How to Alleviate Long-term Risks

Medtech supply chain 2020 and 2021 were swarmed by the global COVID-19 pandemic and all of its additional variants. As we begin to see the light, and the faces (without masks), at the end of the tunnel, manny issues brought on by the global pandemic and other factors have continued into 2022. Despite how badly everyone wants the COVID-19 talk to complete disappear, reflecting back on the effects of the pandemic is necessary to understand how to better move forwards into the future.

Global supply chains were torn to shreds when the pandemic hit. As many were advised into lockdown after lockdown, manufacturing facilities were either not running at all or were overwhelmed with demand. In addition to the global pandemic’s effects on the supply and demand of all global markets, the Suez Canal which is one of the larger shipping canals, was blocked for six whole days by a vessel in March of 2021. Due to the events in 2021, MedTech companies continue to face backlash especially when it comes to electronics and shipping, which has been, and will continue to bite into the companies’ margins. In hopes to provide some strategies to overcome these challenges, we at iData have compiled insights to create resilient supply chains to alleviate long-term risks.

1. Identify Alternative Sources

In the MedTech industry, it is common to rely on a single supplier source. Although this has proven beneficial in terms of lowered costs at higher volumes, these lack resiliency and redundancy. If MedTech companies wish to strengthen their supply chains in the face of conflict, they must look into alternative supply chain options such as including multi-sourcing, localization, and outsourcing. Essentially, in order to create an agile supply chain they must move away from standardization and modularization. In addition, MedTech companies should also focus on shifting their efforts towards evaluating their supply risks. In order to be a proactive organization and plan for the future ahead you must be able to understand which products are of high priority, and how many of each product you should be keeping in inventory based on purchasing habits and suppliers.

If you’re able to move away from a single supply source to increase redundancy and successfully develop a method to constantly evaluate supply chain agility, you will be able to recognize the problem earlier-on and be prepared when the next crisis comes.

2. Shift Towards Value

Another strategy to shift supply chains towards becoming more functional and resilient follows the shift from a low-price focused model to a value-focused model. Instead of having cost as the dominant procurement priority, MedTech companies should prioritize technologies that deliver the best possible outcomes for the patient. Additionally, it has been stated before that a supply chain model in which places emphasis only on price, specifically low-price, tends to commoditize demand (1). Investing in technologies that are capable of delivering better outcomes and have improved access at a higher price point will enable a greater sense of reliability with less supply chain risk.

3. Data-driven Approach

Finally, developing a method to receive a forecasted data-driven understanding of your device/product and what is required when the demand picks up is essential. In terms of which data MedTech companies should be tracking, purchase data is less important than usage data. However, this approach to the supply chain issue is slightly more complex because it involves the healthcare system, hospitals and healthcare facilities, as well as manufacturers and distributors. In order to improve supply chain clarity using data, the healthcare system would need to deliver more data around costing models, hospitals would have to develop a better method to retrieve reliable data from buying groups, and manufacturers and distributors SKU-level data would need to be shared more widely. If a solution surrounding data was implemented, MedTech companies could sense early indications in demand fluctuations.

Making strategic decisions at the brand level with confidence can be challenging, especially when the competitors’ pricing structures are less known. While iData’s healthcare market reports help you understand and act upon overall trends and investment opportunities with real data, you might need extra information to see the movement of market shares, pricing or unit sales at the level of your competitors’ brand or SKU. Learn more about what iData’s Healthcare Market Reports and MedSKU projects can do to assist you in creating an agile supply chain through data-driven decisions.


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  1. https://cdn.ymaws.com/medtechcanada.org/resource/resmgr/Medtech_Canada_Supply_Chain_.pdf
  2. https://www.kearney.com/health/article/?/a/it-is-high-time-to-make-medtech-supply-chains-ready-for-the-future
  3. https://www.mpo-mag.com/issues/2022-03-02/view_editorials/fda-seeks-to-address-future-medtech-supply-chain-challenges/
  4. https://www.medtechdive.com/news/as-ortho-procedures-recover-stryker-turns-focus-to-supply-chain/619964/

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