Why the MDR regulation was just the catalyst the medical device industry needed
That’s because regulatory changes, related to the manufacture and distribution of medical devices in the EU, will fully apply to all EU Member States in May 2020.
These incoming regulations have been largely driven by a need to improve patient safety, aimed at ‘harmonising and simplifying’ current rules, improving both transparency and product traceability. On 26 September 2012, the European Commission adopted a proposal for the regulation of the European Parliament and the Council on medical devices (EU MDR) and in-vitro diagnostics (EU IVDR). These regulations, once implemented, will replace the existing three medical devices directives.
To meet these new regulations however, manufacturers – if they haven’t already – will have to work hard to proactively prepare their supply chains to maintain business continuity. The top priority will be to not disrupt current distribution flows; this poses one of the biggest risks to organisations. This is because the EU is often thought to be the ‘first port of call’ for the medical device industry, worldwide, and therefore changes to regulations has the potential to cause disruption to the supply chain network. Failure to comply with these procedures may mean that medical devices could be withdrawn from sale, with device manufacturers no longer able to supply their products to other EU member states.
What impact will the regulations have on supply chain?
Most significantly the regulations will prompt a change in the way the sector labels products, as all labels will now need to be in-line with the EU MDR. For some, this effort alone will take considerable time, resource and planning. Importantly, a Unique Device Identification (UDI) number will need to be added to products so they can be tracked at an item level.
Overall however, the impacts will be wide-ranging. They will include changes to supplier agreements, increased scrutiny of supply chains, full disclosure of information plus unscheduled audits. In short – MDR will require access and control to an increased level of information, ready and available at any time.
So why is this ‘good’ for supply chains?
The impact created by the online, e-commerce or digital marketplace has meant that customer demand is now King, having made a real change to the world of medical devices and crucially, the way the sector needs to set-up and manage its supply chain. But there is still work to be done – most notably, in the digitisation of supply chains and the integration of networks.
Let’s take the new UDI regulation as one example. UDI requirements will mean that product data needs to be drawn from multiple sources, and yet, many companies still don’t have a clearly defined or consistent strategy for managing all their data sets. The incoming regulations are therefore just the catalyst that the industry needs to ensure its future success.
State of the nation – what is the industry battling against?
As well as tightening regulations, MedTech companies are continuing to expand their product portfolios to meet fluctuating market demands, while lengthening product cycles are making supply chains more and more complex. It’s widely acknowledged therefore that organisations need to meet rising customer demand in order to succeed. BUT, is that the right way of doing things?
It’s often the understanding that supply chain change first starts with the customer.
But that’s wrong. That’s where it ends.
Supply chain improvements can only be achieved – and felt for the long-term – with a robust strategy for change. If the strategy is right, then the customer satisfaction will come.
That’s because meeting customer demand cannot be taken in isolation. Their demand is only what they want now, not what they will want. Instead, having the ability to flex to change – driven by the customer, regulation or otherwise – and the agility to review, enhance and ultimately improve efficiencies will bring much more value to the company and the customer in the end.
In fact, the need to have a strategy – aimed at delivering these attributes – becomes even more pertinent when you consider the role that external factors also play. Factors, that beyond the customer, also have a massive impact on the logistics industry…
The incoming MDR regulation is a good example of this. Quality and compliance issues are rising because products are becoming more complex and regulatory scrutiny is also getting stricter. It’s a regulation that will bring about real change and development, putting the industry in good stead for the future. The good news is that the MedTech industry has already begun to rethink their health-care supply chains; addressing fragmented and incomplete processes, as well as the antiquated systems many are still using to manage their value chain.
Steps for success
But transforming medical supply chains isn’t easy. We know from research like this year’s LogiMed report that a third (31%) of all medical manufacturers have no end to end visibility[i] and – on the whole – are not integrated. “Collaborating on common platforms” was a popular theme that kept cropping up, clearly showing the importance of an over-arching strategy.
Anecdotally, we also know that this is a sector where logistics enhancements can often get forgotten by manufacturers in favour of new product development. HOWEVER, having a ‘big picture’ supply chain strategy will be critical to their sustained success. As a result, manufacturers will need to carefully define what organisational change needs to happen to meet this customer demand, and that will also set them on the right path for the future.
Often the common areas to focus on are:
- Reliability of services
- Improving customer satisfaction levels
- Faster delivery / return cycle times
- Better availability of products
But if we take this back a step and look instead at what the strategy should be to deliver this, here is what capabilities manufacturers should really be focusing on to drive performance:
- Complete technology integration and end-to-end visibility
- Facilitation of lean inventory and just-in-time fulfilment
- Flexible service options
- Strict monitoring and measurement against value-driven KPIs
Much of this – unsurprisingly – starts with technology. Or more specifically – data. Data is the facilitator to delivering what customers want now, and in the future.
Encouragingly, the same LogiMed report referenced above found that 84% of medical manufacturers have begun their digital journey and acknowledge that flexibility is the key, but only time will tell as to whether these good intentions turn into real action.
A shift to a more data-driven strategy, and to one that really puts customers at the heart of the value chain, is something we’ve seen across the aftermarket industry over the past few years, with both good and bad results. The bad being instances where the execution hasn’t been fully thought through, and customers have been left behind.
Being ready for change and having a clear strategy for delivering that operational agility is a vital commodity as all industries evolve. The regulatory landscape tomorrow will look different to that of today, so taking a long-term view is vital. As well as meeting the urgent demands of regulatory updates and constant customer demands, investing in the right skills, systems and partners now will be the best route for providing the best foundation for the future.
[i] Building a customer-centric strategy: streamlining medical logistics – LogiMed 2019 Report