Medical Equipment Supply Chain Visibility Needs To Improve

Factors at stake—from patient health to new regulation pressures—drive the need for streamlined processes and workflow for the medical equipment technology industry


Medical equipment companies face increasing price and cost pressures. Hospitals pooled their negotiating power to drive more competitive pricing while public spending cuts have become endemic. Competition grows from emerging market medical equipment manufacturers leveraging their lower cost bases to challenge established brands.

What’s more, with pervasive global economic volatility, customers in emerging and mature markets focus heavily on costs. Further price pressures stem from cost-cutting healthcare reforms now being considered or implemented in many countries. And even though U.S. healthcare reform intends to bring more people into insurance plans and increase projected national medical spending, the country’s high budget deficit may further intensify pressure for cost savings in the healthcare sector. In Germany, healthcare budgets are under less pressure due to the country’s stable economic environment. But other risk factors—such as the euro crisis and slowdown in global growth—may move healthcare reforms back onto the agenda.

Approach the issues

Superior supply chain visibility capabilities can drive high performance—a view grounded in Accenture’s medical supply chain visibility approach. As such, management and transparency of supply chain product-related information is fundamental to business success in all industry sectors. This is especially true for companies in the medical equipment industry, which is characterized by intensifying cost and price pressures and extensive regulation. Medical supply chain visibility permeates the whole enterprise and directly/or indirectly impacts most processes throughout an organization.

A phased approach can help achieve effective medical supply chain visibility—starting with a sharply defined roadmap that assesses a company’s current supply chain; and pinpoints steps needed to help achieve full visibility. Once that roadmap is developed, companies should consider shifting to an implementation stage involving organizations and people; processes; data; and technology.

We examine those four phases in more detail below.

Organizations and people—Companies need a defined framework that outlines supply chain governance. The framework should delineate supply chain roles and responsibilities such as training, organizational planning and change management. This framework needs to include gatekeepers who shepherd product release information throughout the medical supply chain.

Processes—Firms should establish definitive and enforceable governance and data management processes that determine how medical supply chain data travels. To make it easier to identify and correct problems as they occur, these processes should cover the entire ecosystem of manufacturers, suppliers, regulators and customers. Most processes should be built around product releases and regulatory compliance.

Data—To facilitate accurate dashboard and supply chain reports, data structures and guidelines pertaining to product release information should be established. One crucial structure is master data management (MDM), which is a set of disciplines and processes for driving accurate, complete, timely, and consistent data classification. MDM can accelerate data exchange within corporations and to third parties; reduce data duplication; expedite product deliveries; and reduce information delivery costs.

Technology—Medical companies should establish an IT landscape that supports supply chain processes. For example, they need to set up product data management and document management systems that store, run and access product-related information and product submission approvals.

For more information on the medical industry, download a copy of Accenture’s new report, “Supply Chain Visibility in the Medical Equipment Technology Industry.”

Robert Krueger is Managing Director, Electronics & High-Tech Group for Accenture in the medical equipment technology practice. He can be reached at robert.krueger@accenture.com.

Armin Meissner, Managing Director, Electronics & High-Tech Group for Accenture, leads the group’s medical equipment technology practice. He can be reached at armin.meissner@accenture.com.

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