Scaling with Demand: Requirements for Success in Medical Device Manufacturing | By Laura Beckwith, Director of Product Management, Configit

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Historically, medical device companies have provided value by producing equipment for diagnosing and treating patients worldwide. However, contemporary challenges such as heightened pricing pressures, regulatory compliance, supply chain volatility and operational inefficiencies have significantly changed the landscape for these companies.

To secure their market standing and guarantee sustained profitability, manufacturers must prioritize the integration of their product and process configuration to enhance delivery lead time, minimize information handovers and eradicate invalid orders. Establishing a single source of configuration truth, via a Configuration Lifecycle Management (CLM) approach, enables manufacturers to maintain a consistent and reliable revenue stream, along with prolonged opportunities for upselling over time.

Challenges in medical device manufacturing

New and evolving regulations and compliance requirements are challenging to navigate. For instance, the FDA recently provided draft guidance for medical device manufacturers, called Section 524B. These are updates to the FDA’s Premarket Cybersecurity Guidance document and, while not yet binding, herald changes that will likely become legal requirements. This section proposes that any manufacturer submitting an application for a new medical device must include a detailed cybersecurity plan for the device, its software and any other internet-connected technology.

These companies also need to pay attention to new guidelines, such as those recently released by the Connectivity Standards Alliance (CSA) for IoT devices. It aggregates a number of international regulations into one specification.

Supply chain resilience is also an issue. Medical device makers have struggled with unprecedented supply chain shortages for the past three years, including a dearth of raw materials, leading to product delays and other challenges. This reality highlights the need for such companies to develop more resilient supply planning and risk mitigation approaches that enable better visibility into and insight about inventory. That will help to improve forecasting, planning and right-sizing of orders.

The U.S. Producer Price Index (PPI) for healthcare-related equipment and supplies manufacturing has risen since last year. Medical device makers also face lower-cost options from global competitors, higher interest rates, ongoing economic instability and reduced budgets across healthcare systems. All of these issues affect spending on medical technologies. In addition, these highly competitive companies are trying to navigate an environment that’s frowning upon raising prices for the critical devices they make. They need to reduce their costs so they can still turn a profit, which is leading them to take another look at their product portfolios to eliminate excess costs and redundancies.

There are also challenges related to operational inefficiencies, including manual documentation processes, lack of visibility into supplier performance, and difficulty managing changes throughout the product lifecycle that can lead to delays, errors and increased costs.

The need for aligned data

Engineering, sales and manufacturing need to have insight into the same data sets so they can understand what actually can be manufactured and offered to customers. CLM fits this need; it creates a unified repository of all possible product configurations so that medical device manufacturers have confidence that their whole organization is operating from the same data.

With CLM in place, the manufacturing function experiences faster and more accurate delivery times. The engineering function has more time for innovation, and the sales team never sells a non-compliant product. The manufacturer also experiences a fast and accurate response to the supply chain in real time, since it takes just hours to make and deploy changes instead of coordinating various departments and systems. Manufacturers get a better understanding of how compliance issues will affect them by leveraging both a digital thread of customer’s orders and the original source data.

In addition, enabling users from various business functions to use a shared source of configuration truth for collaboration offers a higher degree of transparency so they can capture costs from engineering hours, order handling flow, routing and drawing maintenance, inventory replenishment and more.

Greater value, less disruption

When data is connected across functions, not only are errors due to siloed information eliminated but the development, manufacture and sale of products and services is accelerated. The company gains more operational efficiency by having a shared source of configuration truth. The internal value of this shared truth manifests as lower costs and higher sales. The external value manifests as greater brand loyalty and customer experience.

This results in a process that is free of errors, creating competitive advantage, long-term stability, greater customer satisfaction and higher profit margins.

Manufacturing success

Today’s medical device manufacturers have a lot to contend with. Supply chain issues, cost pressures and evolving regulations are making it more difficult to produce affordable, quality devices in a timely manner. To attain or maintain competitive advantage and remain profitable long-term, these manufacturers need to create a single source of configuration truth via CLM. This unifies both their process and their product configurations, empowering them to experience stable, ongoing revenue and to scale their businesses.

 

 

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