medtech, disruption, life sciences, erp

“Our biggest challenge was not maintaining production and operations during the pandemic – but it’s today, managing the impact of the aftershocks.” – Joanne Mavroides, Director Supply Chain & Logistics at Abiomed

The medtech industry association, MassMEDIC, recently held a “Virtual Supplier Showcase” event. As an associate member, QAD sponsored an insightful panel discussion, which I was delighted to moderate alongside industry giants Max Kley, CEO of Freudenberg Medical and Joanne Mavroides, Director Supply Chain & Logistics at Abiomed. The discussion dove deep into the state of the medtech supply chain and manufacturing. Here’s an abridged version of the discussion, highlighting the key takeaways you need to know in the areas of People, Process and Systems.

medtech, life sciences, erp

People

Here we are today, 18 months from the start of the pandemic. But first, let’s take a quick step back and look at the early days of 2020, when we saw extraordinary collaboration across industries to produce PPE, ventilators and sanitizers that were all in short supply.

Can you share how you collaborated with suppliers, partners, customers or even competitors? How did you work together to serve and deliver products that were needed most?

Joanne: “Abiomed delivered over $1M worth of PPE to local hospitals in the Boston area and we continue that line of communication and support to this day. Our devices are also assisting COVID patients today experiencing heart failure and heart related issues.”

Max: “Freudenberg is a key supplier and provider of medical equipment and components that support COVID patients, and continue to provide these critical, lifesaving products.”

Processes

Supply chain disruptions have been a common theme throughout the last 18 months – from chip shortages to limited and sometimes non-existent shipping containers to the great toilet paper crisis. And new ones are popping up daily, from the Texas ice storm earlier this year, to mudslides in northern Germany and government embargos. Max referred to it as a game of “Whack-A-Mole,” where as soon as you have one issue resolved, another one rears its head.

How have you been impacted and how have you responded? Have the past 18 months caused you to reevaluate suppliers, processes, partners? What risk mitigation measures have you implemented as a result? 

Joanne: “Abiomed has always had robust risk mitigation strategies in place. However, today, we’ve had to re-evaluate those strategies and rethink new ways of working. One of the key learnings we’ve applied is evaluating and prioritizing our risks based on the number of variables. For example, in some areas where we have a single-source supplier, we’ve had to increase collaboration with that partner and better understand their risk mitigation strategies. With other partners we had to renegotiate agreements to ensure they have a 12-month supply of certain materials, or set-up Kanban agreements. In other areas, we’ve had to establish dual-sourcing strategies in order to reduce dependency on a single geographical location.”

Max: “For Freudenberg Medical, as one of the largest elastomer providers in the world, we were able to respond to the supply chain issues more successfully than some of the smaller players. Being part of a larger company, with access to a broader network of resources, provided us the flexibility we needed to stay resilient. For example, maintaining 3-6 months of safety-stock for certain medical products was very important. Our colleagues in the automotive division unfortunately don’t have the ability to maintain inventories given the just-in-time strategies required for their business. Flexibility is key, as much as you can given the regulatory regulatory requirements of our industry.”

Systems

Given our strict regulatory requirements, once systems and processes are validated and proven to be safe and effective, change is very difficult – it takes a lot of time and resources. In this regard, life sciences companies tend to be laggards relative to other industries adopting the latest and greatest software applications. However, one of the silver linings of the pandemic, because of the shutdowns and remote work, has been an acceleration of technology adoption. Even the FDA has been working hard – with the Case for Quality, Computer System Assurance initiatives starting even prior to the pandemic – to make it easier for manufacturers to adopt new technology and take a more risk-based approach. And now, with the creation of the Office of Digital Transformation, even the FDA is looking to go further and broader with digital solutions.

Can you speak to your digital transformation journey – where you were before, and where you are now from a technology perspective, and how did it help your organizations “stay operational” during the pandemic and navigate post-pandemic challenges?

Thankfully, both Abiomed and Freudenberg Medical had already started their journey of transformation, establishing best practices around enterprise systems such as ERP to manage all of their manufacturing and supply chain work flows remotely. In addition, leveraging cloud-based ERP applications further enhanced their ability to not only manage production orders and supply chain materials, but also to relieve constrained IT resources.

Freudenberg was also able to leverage IoT platforms to connect, monitor, and diagnose issues within their equipment and provide maintenance and upgrades remotely with technicians from Germany when travel was limited. This is an area they plan to expand to other machines and equipment in additional plants around the world.  

At Abiomed, Impella Connect was established to improve the patient experience by connecting doctors directly to the healthcare environment using cloud-based systems and remote access. Prior to the pandemic, hospitals had very few IT resources to roll out programs like this at scale, so very few physicians were using it. But today, post-pandemic, nearly 90% of Abiomed’s hospitals are now connected in secure, protected environments, and leveraging AI to provide predictive information about pump and patient metrics to help guide clinical decision-making. The platform has also been extended to include frontline customer service representatives as well.

We’re navigating unprecedented times, experiencing challenges never seen before. What are some of the lessons learned and takeaways from this? Where do we go from here?

  • Supply Chain Disruption: Improve collaboration with partners, stay in touch and be flexible.
  • Risk Mitigation: Build a risk priority system around your products and especially sole-sourced products. Understand where you may have weak points and have a redundancy plan in the event of a shutdown.
  • Raw Material Shortages: Increase your safety stock, ask your suppliers to have safety stock and risk mitigation plans in place and review them frequently. Expand your network of suppliers and look for local resources.
  • Shortage of Workers: From the office to the shop floor, automate business processes with enterprise and operational software applications like ERP, cloud computing, IoT, Advanced Analytics, and remote applications so you can troubleshoot and maintain equipment from afar and stay connected, as well as run your day-to-day operations from finance, sales, production and quality. The goal is to do more with less while empowering the resources you do have to focus on the work that matters most.

Catch Up with the Virtual Supplier Showcase Replay

You can watch the full recording of the Virtual Supplier Showcase here. And for more information on QAD’s Life Sciences-specific digital manufacturing and supply chain solutions, visit our website.

LEAVE A REPLY