As you may recall, I wrote a post in September of last year pointing out the challenges Medical Device manufacturers face in the future, which was a follow up to a recent Medical Device manufacturing research study conducted by Cambashi Research. My prior post offered insights as to where the largest opportunities for growth are within this industry (see chart here), which were closely aligned with improving the processes surrounding new product introductions. In this post I will go a little deeper into the findings and offer five growth strategies to best take advantage of this unique market opportunity.
It is no secret that the world’s populations are getting older. According to a report published by the United Nations, the world’s population is aging at an unprecedented rate — and the twenty-first century will witness more rapid ageing than did the century just past (see report here). One of the beneficiaries of this growth is the Medical Device manufacturing industry, given that their line of products often are best suited for the “graying” segment of the populations. In order to take advantage of this once-in-a-lifetime opportunity, Medical Device manufacturers must determine how to best keep pace with demand.
Here are five strategies that can help, listed in order of popularity, based on research conducted by Cambashi (obtain a free copy here):
- Improve plant floor operations by automating processes and increasing efficiency. According to the research, one of the most effective tactics to accomplish this strategy is to implement software systems, which can have a significant impact on the consistency, efficiency, reliability and speed of key processes; establishing new end-to-end processes and improving analysis across sites is a way to further accelerate the potential gains from this approach.
- Increase planning capabilities to achieve greater efficiency; operate more “just in time” to remove idle inventory and reduce the cost of obsolescence. This capability also applies to staffing across the organization – if you have a better planning process, then you can get more of the right products in front of the right customers with the right level of staffing. This capability can be enhanced with the right planning systems in place that can increase your visibility to what is happening with operations across your organization.
- Enhance logistics execution performance to increase efficiency and reduce costs. Advanced software systems can be used to synchronize production processes with inventory logistics for greater productivity improvement while ensuring processes are correct and within regulatory guidelines.
- Invest in better staff training, which can then increase the efficiency of virtually any process by helping staff understand and consistently execute standard operating procedures (SOPs). Further benefits could come from employees understanding what their role is and how they can impact outcomes, thereby becoming “smarter” and capable of making better decisions faster.
- Expand the geographies where your production processes are performed. This strategy could also offer cost advantages, provided the necessary visibility and control can be maintained to ensure quality and compliance standards are adhered to.
According to the survey, the top two strategic priorities line up well to these growth strategies. Half of the respondents report that these strategic priorities are to improve efficiency of manufacturing operations or to align operational performance with corporate objectives. A third of the respondents are promoting collaboration across locations and functions as a strategic priority; about a quarter are focused on building compliance and traceability into production processes.
You might observe a theme from these findings – investment in modernizing your IT systems could pay significant rewards in the future, beyond those envisioned just five years ago. What I am talking about is an opportunity cost of not being able to ramp up quickly or adapt operations fast enough to capture new market opportunities. Those organizations that have made this investment will be poised to capture a larger portion of the future expected growth that seems almost a “sure” thing. Now, if only I could figure out how to stop myself from ageing to defer my future medical costs!