Inventory Visibility: Driving the Evolution of theMedical Device Supply Chain
Stephen BradleyPresident and CEO
Medical Tracking Solutions Inc.
AGENDA
Dynamics Today’s supply chain The end state Why now? What do we get for our efforts Conclusion
Market Dynamics
BIG OPPORTUNITYSupply Chain is 40% the Cost of Sales in Medical Device
High Margin
High Growth
Low Pressure on Cost Structure
Historically
+=
Pricing Pressure
Increased Regulatory Pressure
Higher Customer Expectation
Increased Pressure on Cost Structure
Times have changed
++=
Inventory Deployment
Today’s Supply Chain
Sales recorded at usage or after by sales rep
Replenishment signaled with the hospital PO
Loaner systems support shortages and abnormal usage
Direct Sale
Trials and Medical Education
Consigned Model
Inventory Usage and Sale
Manufacturers Central Distribution Centers
Sales Rep CarsConsigned in Hospitals Distributor Offices
* Hospitalo Complex challenge for owned equipmento Consigned and case specific equipment is chaotic
Visibility
Today’s Supply Chain
* Control and visibility through finished goods warehouse with ERP* Very limited visibility past the doors of the warehouse
Today’s Supply Chain
“Where are we going?
Today’s Supply Chain
Product and Sales Information Flow
3PL
Selling
Supply Chain of the Future
Software Systems with End to End Connectivityo Manufacturer to hospital usageo Surgical scheduling that drives just in time deliveryo Consistent view of inventory usageo Data driven inventory stocking decision
Sales People Sell!
Inventory managed by supply chain professionalso Forward deployed inventory o Shared space warehouses – 3PLso Milk run replenishmento Loaner replenishment on the fly
Minimal Inventory in Hospitalso Inventory supports unplanned demand
Confluence of Market Needs and Capabilities
Cost pressures
More stringent regulatory environment
Hospitals under pressure to rationalize supply base and complexity
Software Now Supports the Business Needs
End to end field inventory visibility
Multi-level BOM’s
Integrated mobile technology/apps
Medical Device Companies are Opening to Outsourcing
3PLs are gaining knowledge of industry nuances
Companies are seeing reduction in complexity and cost
WHY NOW?
Visibility and Control =
Better Business
Safe and effective surgerieso Improved product traceabilityo Right product, right place, right
timeo Reduction of OR distractionso Less traffic in OR
Reduced costo Reduced inventory in the
systemo Reduced inventory write-offso Reduced cost of sellingo Reduced freight costs
Distractions/Issue reductiono Smoother product movemento Quicker replenishmento Reduction of surprises with clear
visibility
Increased revenueo Sales rep time freed up to sello Space taken by excess inventory can
be repurposed to generate revenueo Surgeons have fewer equipment
related cancelled surgeries, increased volume
We Want The Same
Thing!
Sales Rep
Hospitals
Medical Device MFG
Surgeons
Supply Chain Stakeholders
Conclusions
Medical device supply chain change is happening
These changes fundamentally improve our healthcare system
It supports the needs stakeholder from manufacturer to patient
Increased/focused capabilities of 3PL’s provides expert feet on the street
New software capability provides visibility ands connectivity across the supply chain
Any Questions?You can find me at
www.MedicalTracking.Com
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