Digital transformation in the MedTech industry Bookmark has been added
Digital transformation in the MedTech industry
Digital supply networks and MedTech
Faced with rising price pressures from health care providers and challenged with lower returns from maturing products, companies in the medical device industry (referred to as MedTech) must now explore new ways to improve their bottom lines. Supply chain digitization in medical devices is imperative to remain cost competitive in the future.
- Drivers for digital transformation in the medical devices industry
- Traditional vs. digital supply networks
- Potential benefits of a digital transformation in the medical device sector
- Making it happen
- The bottom line
Drivers for digital transformation in the MedTech industry
A range of forces—from increased pricing pressures to more stringent regulations and operational inefficiencies arising from a general trend of consolidation—have reshaped the MedTech landscape. These trends show no signs of reversing. If players in the MedTech industry digitize their operations, they can build the necessary momentum for enduring growth and profitability.
Traditional vs. digital supply networks
Potential benefits of a digital transformation in the MedTech sector
While the challenges may seem daunting, MedTech companies can focus on new technologies and frameworks as a way of countering threats and positively affecting their bottom line. Increasing operational efficiency and providing greater value to their customers through digital supply networks (DSNs) would certainly be a start. But which MedTech functions would benefit the most from DSNs, and what specific technologies would best justify their implementation costs?
We have identified five supply chain areas where MedTech companies can reap the greatest benefits when adopting digital technologies:
- Inventory management
- Logistics and distribution
- Device maintenance
- Product development
- Warehouse operations
By introducing digitalization in these areas, companies can enable increased supply chain visibility, reduced maintenance and research and development costs, greater customer satisfaction, and improved patient experiences.
Making it happen
Think big, start small, act fast
While transformative digital medical devices and digital supply networks can have widespread implications, we recommend a “think big, start small, act fast” approach. Developing a future-state vision of an optimized supply chain from suppliers to providers and patients is the first step. Then, start with incremental changes to mitigate the risks and demonstrate early success to stakeholders. MedTech companies should prioritize areas that can unlock several stages of potential value while acting fast to achieve quick wins. Companies can build on early successes and continue to establish DSNs where they make strategic and financial sense.
Develop new workforce skills and capabilities
MedTech companies need to train their workforces and plan time and resources to fully take advantage of DSN’s potential. In general, the workforce should become more tech-savvy and adapt to multifaceted tasks, rather than focusing on department-specific activities.
The imperative for the workforce to be well-versed in digital solutions is threefold:
- As consumers of the underlying technology, users must be able to extract value from digital solutions
- As buyers of digital solutions, the workforce needs to be educated on the tools and processes being installed, the sequence of new technologies to be adopted, and their anticipated impact
- As implementers of digital solutions, teams need to be prepared for a different working relationship with IT, since individual teams may supplant IT as the primary owners of the technology
Address cybersecurity risks
The connected nature of digital supply networks makes cybersecurity more important than ever. Whether the risk is someone changing a machine setting on an automated process that makes life-saving devices or a hacker switching off an implanted pacemaker, MedTech companies need to install cybersecurity in every stage of the supply chain. This is best accomplished by addressing three main areas:
- Choosing the right technology and addressing cybersecurity as a top priority to avoid potential issues down the road
- Training employees continuously on security threats and corresponding countermeasures
- Developing backup solutions and building safeguards to potential threats
Adopt agile systems for DSN development and deployment
MedTech companies need to take an agile approach to DSN development and deployment in order to ensure meaningful change throughout the organization. This approach enables the development of requirements iteratively rather than at the onset of the project. Agility in refining and adjusting allows adopters to tweak development based on ever-changing goals with increased confidence in the final success of the initiative.
The bottom line
The MedTech sector has taken a more conservative approach to DSN digitalization, relying on established products, technologies, processes, and systems to conduct business. MedTech companies now have the potential to effectively tackle their most pressing challenges and counterbalance bottom-line effects by embracing DSNs. While establishing DSNs may appear intimidating, there are tactical steps organizations can take to get started immediately and make a sustainable and tangible impact on their operations.
Using digital supply networks to gain competitive advantage
Building a digital supply chain