The growth of in-home care along with technology improvements like AI are shifting how medical device companies manage their inventory and final-mile deliveries. This, coupled by the increase of innovations like robotic-assisted surgeries, is creating a lasting impact on the medical devices supply chain. In fact, the healthcare third-party logistics (3PL) market is expected to grow at a compound annual growth rate of 7.6% from 2023 to 2030.
With continued expansion on the horizon, what can we expect out of this space in 2024? Here are a few emerging trends to keep on the radar.
Upskilling will dominate the future of shipping and logistics
The change and growth of the medical device industry means more will be expected from 3PLs and transportation providers. Home deliveries of medical devices, supplies and medicine are increasing, including everything from insulin pumps for diabetes to orthopedic devices. With this growth will come an increased need for a different skillset, one focused not just on delivery, but also on device instruction.
For logistics companies, this creates the need for a more specialized workforce. When it comes to home deliveries of medical devices, companies may be expected to not just bring the device to a person’s home, but also set it up and provide one-on-one training for proper device usage. This will mean additional training for delivery teams or potentially show an emerging trend of shipping and logistics companies hiring trained medical personnel, like nurses, to assist with such deliveries.
This trend has the potential to drastically transform the logistics industry, especially since a shortage of nurses persists, with a recent survey showing this deficiency is likely to continue. Suffering from burnout caused by long hours at short-staffed facilities, nurses could find helping in-home patients with their devices a lower-stress and fulfilling way to put their valuable skillset to use.
The concerns for in-home device delivery also exist for hospital and ambulatory care centers. The development of more complex medical devices means essential training will be required to not just address device assembly, but also ensure proper warehouse storage, handling and shipping processes so devices arrive in an optimized state. For many, it may not just stop there. In fact, don’t be surprised if purchasers will be looking for “white glove” delivery, which will include easy set up within hospitals as well as equipment monitoring to address any potential problems that may have arisen during transit.
100% order accuracy is a top priority
Consistency will be key to those entering the medical device final mile delivery. While 98% success with order and delivery accuracy may be acceptable to other industries, the medical device sector strives for 100% success rate. Anything less will put a hardship on the end patient. Everyone needs to be focused on improving the patient experience.
Additionally, because many of today’s hospitals lack adequate storage space, orders are often addressing active needs as opposed to creating a surplus, placing additional pressure on logistics and shipping companies for expeditious and accurate fulfillment.
Therefore, those in the medical device logistics space must ensure their processes are optimized to create this 100% accuracy. This includes establishing a system to confirm the legitimacy of the orders received, proper device packing and fulfillment and, most importantly, a means to validate the orders.
They must also be aware of medical device ordering trends. For example, it’s normal for medical care facility personnel to order devices later in the day. Knowing this, warehouses must better staff their centers during peak hours to make sure fulfillment processes are followed and that all orders are correctly fulfilled and reach their destinations on time.
Given these added demands, don’t be surprised if we see the emergence of more manual accuracy checkpoints as a failsafe to keep order accuracy high. This is not to say that automated fulfillment will be going away. Instead, expect more of a blended approached.
Cybersecurity will be continually tested
The pandemic accelerated adoption of telemedicine and remote patient monitoring by healthcare practitioners, including hospitals. With more providers entering the space there are more potential ways for cybercriminals to launch attacks.
With patient data being shared outside of medical facilities’ proverbial four walls, cybersecurity must be put under a microscope by supply chain partners to protect both medical device customers and ultimately their patients. The frequency of cybersecurity attacks targeting U.S. healthcare organizations nearly doubled during the first half of 2022 compared to the same timeframe in 2021.
Safeguarding data, including securing personal health information (PHI), and compliance with HIPAA and other regulations, is a challenge that must be met in all areas of healthcare, medical devices included, and throughout the entire supply chain.
Expect logistics partners to build increasingly cutting-edge cybersecurity capabilities into their solutions in 2024. However, be wary of those that aren’t prioritizing cybersecurity and how that may reflect on their logistics processes.
AI, ML and predictive analytics will provide new challenges and opportunities
Artificial intelligence (AI) and machine learning (ML) play a major role in the growing medical devices market. While device manufacturers use such technologies to assist with diagnostic decisions and improve precision, logistics partners will be using AI/ML to anticipate disruptions, improve the responsiveness and meet customer needs.
Similarly, predictive analytics enables logistics providers to improve inventory management, especially on consumable prescriptions and commonly used medical and surgical devices. As such, 3PLs will either need to hire employees to understand, use and fix this technology or train them to do so. That will be a challenge to consider since the labor market remains tight.
While these new technologies will provide challenges to industry professionals, the benefits will outweigh the costs. As AI technologies continue to evolve alongside predictive analytics, expect more proactive engagement from device producers and fulfilment companies. Specifically, look for companies to start overcoming the supply chain lag that has characterized the last three years and for overall inventory levels to stabilize. With more insights into inventory, its usage and reorder frequency, companies should finally be at an advantage when it comes to device and parts production.
Additionally, growing data around order frequency and shipping locations will allow companies to better manage their inventory across distribution centers and even provide customers insight into where their devices are through real-time tracking. Such insights are especially critical as the healthcare industry is about to face a massive reduction, with more than 600 rural hospitals at risk of closing. By staying ahead of these closures and monitoring purchasing trends, organizations will position themselves to meet future healthcare needs.
Looking to outside logistics help
The medical devices logistics space follows trends occurring in the medical devices industry itself. Along with the trends mentioned, the industry is also likely see continued rise in areas like wearable medical technology, 3D printing and more in 2024
Medical device logistics processes are becoming increasingly complex. New variables include changing customer behavior, new business models and fresh competition on the landscape. As such, medical device manufacturers should consider reaching out to one of the leading 3PLS in North America – those well-versed in all areas of medical device supply chains and distribution and those that keep up to date on the most recent industry logistics trends.
Tim McClatchy is the head of life sciences at Kenco, one of North America’s leading third-party logistics (3PL) providers. Tim brings 20 years of experience in supply chain and logistics with a focus on the Life Science industry. With his knowledge of industry and leadership skills, he led a global team to be awarded Supplier of the Year two years consecutively with a medical device company.
