1. Inventory Visibility:
Driving the Evolution of the
Medical Device Supply Chain
Stephen Bradley
President and CEO
Medical Tracking Solutions Inc.
2. AGENDA
Dynamics
Today’s supply chain
The end state
Why now?
What do we get for our efforts
Conclusion
3. Market Dynamics
BIG OPPORTUNITY
Supply 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
+
+
=
4. 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
5. * Hospital
o Complex challenge for owned equipment
o 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
9. Supply Chain of the Future
Software Systems with End to End Connectivity
o Manufacturer to hospital usage
o Surgical scheduling that drives just in time delivery
o Consistent view of inventory usage
o Data driven inventory stocking decision
Sales People Sell!
Inventory managed by supply chain professionals
o Forward deployed inventory
o Shared space warehouses – 3PLs
o Milk run replenishment
o Loaner replenishment on the fly
Minimal Inventory in Hospitals
o Inventory supports unplanned demand
10. 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?
12. Safe and effective surgeries
o Improved product traceability
o Right product, right place, right
time
o Reduction of OR distractions
o Less traffic in OR
Reduced cost
o Reduced inventory in the system
o Reduced inventory write-offs
o Reduced cost of selling
o Reduced freight costs
Distractions/Issue reduction
o Smoother product movement
o Quicker replenishment
o Reduction of surprises with clear
visibility
Increased revenue
o Sales rep time freed up to sell
o Space taken by excess inventory can be
repurposed to generate revenue
o Surgeons have fewer equipment
related cancelled surgeries, increased
volume
14. 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
Perspective – 18 years with Stryker
3 years running a software company in MedTech, distributors and hospitals
I am gong to bore you with topics we will discuss endlessly over the meeting this week and then we can discuss where we are going and why we need to get there
Time at Stryker – no one really cared what we spent – times have changed
Look from the customer back, Inventory is everywhere!
It all starts with an order! In some models – change title as it heads out the door.
Consigned and loaner models
Trials and MedEd engine supporting sales
Visibility is a challenge as product leaves the FG’s warehouse
Product moving all over the place, incomplete communication and excess inventory at every step