The medical device supply chain is constantly in need of resiliency. Supply chain challenges faced by manufacturers of delayed deliveries and stockouts take on additional urgency in the medical device arena, where patient well-being depends heavily on timely and accurate delivery.
In a recent article in MD+DI, QAD Life Sciences Director Jennifer Petrosky describes essential ways to optimize the medical device supply chain. The pandemic tested the supply chain across all industries, so how can medical device supply chain leaders implement strategies and plan for potential risks in the post pandemic “new normal”?
Jennifer focuses on four supply chain approaches to meet quality and efficiency targets and achieve production promises:
- Broadening multi-sourcing and the use of near shore suppliers
- Expanding supplier relationships
- Implementing digital demand planning and forecasting solutions
- Designing and implementing updated risk mitigation strategies
Finding Resilience in the Medical Device Supply Chain
In her article, Jennifer identifies four approaches to building resilience in your supply chain, all of which contribute to a common theme among medical device supply chain leaders. Among others, it requires end-to-end transparency, reduced exposure to shocks, and assurance that it is on the executive agenda, according to a recent article from McKinsey.
- End-to-end transparency relates to internal and external data sources to identify leading lagging metrics in such areas as data security, operations, organizational maturity and compliance.
- Reduced exposure to shocks includes expanding the network of suppliers and their locations through multi-sourcing and more near shore suppliers, as Jennifer suggests.
- Ensuring executive buy-in on the importance of supply chain resilience should be threaded throughout the company’s strategic planning and daily operations.
Broadening Multi-Sourcing and the Use of Near Shore Suppliers
Following the shocks experienced during the pandemic, medical device supply chain leaders are looking for ways to leverage on-shore or near-shore partners to deliver their items on time and within budget.
It’s a smart strategy.
It’s critical to have a diverse ecosystem of suppliers to reduce the risk of supply side shortages or stockouts. Starting early in the design phase, medical device manufacturers should look at various strategies to qualify suppliers, especially because of the complex quality tests, verification requirements and regulatory approvals involved.
Using suppliers that are closer to their markets is an important option for medical device manufacturers to reduce shipping costs and achieve better control.
Expanding Supplier Relationships
Communication and collaboration throughout the supply chain is critical and contributes to the avoidance of disruptions. It works both ways between manufacturers and their suppliers. For example, sharing production requirements and changes in demand on an on-going or periodic basis so that all parties can better plan and rapidly adapt to changes.
Improving strategic partnerships gives trading partners the ability to better respond to market volatility and changing demands. Fully integrated supplier management solutions deliver improved supplier collaboration, optimal sourcing and real-time communication. QAD SRM (Supplier Relationship Management) strengthens fragmented supply chains with improved collaboration, sourcing and supply and demand responses.
Implementing Digital Demand Planning and Forecasting Solutions
To respond to the upheaval in customer demands in the medical device industry, manufacturers can improve production planning and the delivery of critical life-saving products using digital solutions. They deliver agility in planning to detect and anticipate changes in current demand signals.
With modern digital planning capabilities, medical device manufacturers can achieve increased supply chain visibility using tools that minimize supply chain risk. QAD offers cash-flow and full working capital impact analysis on every supply chain planning scenario.
Jennifer points out: “Leveraging digital demand forecasting solutions allows companies to build a plan around multiple factors allowing them to adapt their strategy quickly and pivot the business to keep products moving out the door.”
Designing and Implementing Updated Risk Mitigation Strategies
Among other challenges, the pandemic uncovered the critical need for updated risk mitigation strategies to respond to potential stockouts, delayed deliveries and similar issues. In her article, Jennifer points out that “new strategies have emerged that help manufacturers focus on what matters most, where potential shortfalls may occur, and measuring the impact of failures and outcomes that emerge as a result of those failures.”
One way that the QAD’s SRM solution addresses supplier risks is by extracting supplier risk information from multiple sources to capture all the risk factors that can impact your business. With it, for example, users can access financial risk ratings and risk event monitoring from Dun & Bradstreet.
How can you better optimize your medical device supply chain to achieve production promises? Read Jennifer’s full article in MD+DI to learn more.
