The strategic questions medical device and diagnostic companies face goes beyond outsourcing.
Whether a company runs its own manufacturing and distribution operations or outsources these functions, it still has to make improvements and align them based on changing industry needs.
Factors such as tightening global regulations, increased global competition, and new market opportunities have prompted manufacturers to outsource a range of critical operations.
According to Medical Device and Diagnostic Industry, "The medical device industry has historically maintained a low level of outsourcing activity, estimated to be only about 10% of cost of goods sold . . . There are several reasons for this, which can be summarized as perceived concerns about quality control, regulatory compliance, competitive pressures, and, in general, a traditionally simpler market with less regulation and a tighter geographical focus compared with current globalization.
Today, the medical device manufacturing landscape has interesting new contours that require new ways of doing business. Companies are facing tougher competitive and regulatory challenges, which make outsourcing an increasingly attractive option."
The question most often asked by executives in medical device and diagnostic companies is, what must be done to develop delivery systems, business models, new technologies, interoperability standards, and governance mechanisms to ensure that patients receive the right diagnostic at the right time.
The increasingly global medtech marketplace creates far more options for companies to create business value by tying together new production geographies and foreign customers.
Where should materials be produced to derive the best combination of efficiency and effectiveness? Which markets are best served from which supply points? And what routing modes link them together best?
What kind of medtech or diagnostic company can benefit from collaborating with a global supply chain company like TAGmedica?
One that has examined its existing practices and concluded that it needs to do any of the following:
• Jumpstart growth or become more competitive by tapping international markets
• Reduce capital commitment to the supply chain and redirect these resources to core expertise
• Ensure uninterrupted supply in a range of international markets and do so reliably and cost-effectively
• Guarantee compliance in a heterogeneous, rapidly changing regulatory environment • Streamline customs processing to reduce delays, fees and fines
• Improve customer relations through better information about where shipments are and when delivery is expected
• Maintain control over product integrity through real-time monitoring and the ability to address problems while in transit
• Protect brand image by preventing product tampering, theft or intellectual piracy
In an excerpt from their book, Fundamentals of Supply Chain Management: An Essential Guide for the 21st Century, the authors, Kenneth B. Ackerman and Art Van Bodegraven, describe some of the relationships that play an important role in achieving supply chain success with outsourced companies they work with.
"In an ideal supply chain relationship, both customers and suppliers get connected in ways that allow them to easily exchange information, demand data, and the visibility of status. What does this mean? For openers, it means communicating demand events and the direction of strategic plans."
It also means linking information systems and jointly leveraging the potential for Internet and other electronic communications. It means working together to reduce costs and improve quality, and understanding capacities and capabilities. And don't overlook your responsibility to teach your partners the techniques needed to be successful in the 21st century.
On the customer side, it means many of the same things, only working in another direction. You need to know about their strategies and directions, their event plans, and their needs for flexibility and resilience. The collaborative planning, forecasting, and replenishment (CPFR) process works both ways.
Your customers need to know about your capacities and capabilities, just as you need to know about theirs. And remember, it's your responsibility to educate them about ways in which you can help them succeed in their markets.
TAGmedica offers you additional capacity and capability in the form of the development, production and distribution of both diagnostic and carrier screening kits for biologics companies to help with their commercialization efforts. Our process is clearly defined for every kit from handling of items to be received, kitted and/or assembled, packaged, and shipped.