1 December 2016

How to truly innovate your medical logistics

Here are two things we know:
1. Medical device companies are experts at creating new and innovative technology for better healthcare solutions
2. Medical device companies are not experts in logistics

So why try?

When you put it like this, the answer seems obvious, but industry change is often slow to occur – in all industries, not just medical. Yet, with increasing regulations to adhere to, greater pressures to be innovative, the need to reduce costs, as well as the move towards a ‘just-in-time’ distribution model, the ability to deliver an effective aftermarket logistics solution in-house is dwindling.

The problems with traditional models

While manufacturers have traditionally preferred to have complete control over a product’s supply chain and delivery journey, in today’s environment some do seem more open to alternative solutions. The reason? The growing need to deliver exceptional products, enhanced service and all at a reasonable price.

But it’s just not possible to achieve this without specialist help or significant up-front investment.

The role of technology

There are two benefits offered to medical device brands by opting for a technology-led approach to aftermarket logistics; these are both operational and financial (in terms of reducing fines by making improvements to better meet SLAs and regulations). But overall, the removal of the logistics ‘burden’ is often considered by our clients to be the biggest benefit.

If the right software is chosen, technology can provide global visibility, reduce inventory in the field as well as improve the experience offered to health trusts and hospitals they work with. They also offer more transparency on shipments out in the field at an item level as well as reduce the risk on lost parts.

Turning traditional on its head

Yet, the opportunities to innovate, don’t just start and end with the role of technology.

By turning traditional solutions on their head, manufacturers can reap even greater benefits. In-room deliveries for instance make for an enhanced customer experience while on-site barcode printing helps speed up returns while allowing for greater flexibility in the returns options. While these require significant expertise and investment to set-up and implement the benefits and significant gains in competitive advantage over competitors could be immeasurable.

What is clear is that for more manufacturers, there is little value in continuing to run an in-house logistics solution, as it will only incur sky-high freight costs and a vast amount of administrative and management time. Many manufacturers also do not have the infrastructure to meet the growing demands of the medical industry, while also keeping a close eye on the spiralling costs and strict SLAs.

Nevertheless, a technology-enabled solution will offer more visibility and real-time information, allowing manufacturers the ability to delivery faster and better services to meet their growing expectations and cost pressures of the industry. As many manufacturers will not have the financial resource or management time to dedicate to adopting this kind of solution, for many, an outsourced logistics provider will be the only – and certainly the right – option.

So is it all about cost?

The short answer is ‘no’. Well, it shouldn’t be.

While LogiMed reported in its A Snapshot of Medical Device Logistics 2016 reported that price was one of the top priorities for customers of manufacturers in 2016, businesses should not get blind-sided into just reducing costs.

Instead, the focus should be on enhancing the customer experience by increasing the reliability and speed of deliveries within the supply chain. Those that understand this and take action will be those that manage to truly innovate their logistics solutions.

Those that do not take action risk losing their competitive advantage and damaging their brand in the process.

To find out more about our proven track record in the medical industry, read about our experience