highlights three trends which are effecting the entire medical device industry: supply chain constraints, inflation and hospital staffing shortages. When we look at these trends closely, they seem to bear a clear indication of the impact the COVID-19 pandemic has had on the sector, with delayed elective surgeries, staff shortages, major raw material shortages and price hikes.

Inflation is a complex macroeconomic phenomenon which impacts all aspects of a given business. Price increases beyond a certain point can’t be absorbed in existing cost models and are thereby transferred to the end customer. This not only affects future demand, but immediate market position. The alternative is to lose margin and disappoint shareholders, employees and management alike.

The global semiconductor shortage is another major factor that has disrupted supply chains the world over, and the medical device industry isn’t immune. Even commodity products used in the industry are seeing surges in price. There is the logistics conundrum of deciding sea or air shipments; how does meeting urgent demand trade off against cost and margin pressures?

Elective surgeries being postponed will eventually create a backlog for hospitals to contend with and staffing shortages today will impact future throughput and service.

The impact of these trends needs to be dealt with in a planned, strategic manner. There are aspects which every company is subject to, as there are factors beyond a company’s control which are at play. However, there are also certain aspects which can be better managed by using the right strategic approach: leveraging technology and Industry 4.0 methodologies. That’s what we will explore today.

Be Ready for Anything

With the COVID-19 pandemic, one thing that became clear across every business and industry around the world is that planning for ’business as usual’ isn’t working. Instead, it is a ‘be ready for anything’ mindset that is needed. Being ready for anything seems like a daunting task, but if the idea is broken down into a clear set of management priorities, which are further separated into actual operational and business use cases, a game plan emerges. It allows companies to build into their very DNA the agility which is associated with a data-rich and Industry 4.0 value chain.

Industry 4.0 is based on the fact that data is available in abundance across the value chain. Especially in manufacturing operations, this data, when harnessed in real time and manipulated to be presented as actionable intelligence, creates value. In this paradigm of manufacturing, data is the lifeblood that flows across the whole operation, and every transaction that happens on the shopfloor, and beyond in the supply chain. Using this data creates a potential improvement or innovation.

Multiple technologies deliver Industry 4.0-level operations, from Artificial Intelligence to Cloud Computing, from Additive Manufacturing to Augmented Reality and from the Internet of Things to Automation. The key to creating a ‘be ready for anything’ operation is to join these separate technologies in a way that best delivers specific business results for your value chain.

When issues like supply chain disruptions and staffing problems are looked at from a planning perspective, it becomes evident that lack of clarity, short-sighted planning and lack of automation play a major role in being able to meet demand expectations and fully utilizing the manpower available. The ‘be ready for anything’ approach then dictates looking at technology to solve these problems. Industry 4.0, when applied correctly, should be able to alleviate both demand and utilization problems.  

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MES as the foundation 

For medical device manufacturers, the foundational technology which is needed to complete the Industry 4.0 puzzle is the MES. This is the application which enables the whole gamut of Industry 4.0 technologies to manifest and create solutions to existing and future problems.

Supply Chain Disruptions. MES at its core is an execution application, which ensures production executes as planned and to spec. A modern MES platform however, goes beyond this basic functionality. The modern MES is all-pervasive; it is connected to shop floor equipment through automation applications or IoT sensors; it tracks material movement across the production floor; it tracks manpower performance and reports issues when they are encountered. The same application also connects to the ERP, SCM, WMS and/or CRM applications which allow for information to move seamlessly across the supply chain.

Considering the semiconductor shortages as an example, a major reason which emerges as a root cause of the shortage was the lack of pre-planning in the face of the pandemic. As demand increased, companies which have been using the JIT model for raw material sourcing felt immense pressure, as suppliers were unable to meet short lead time demands and logistics disruptions lead to massive delays. This effect, when applied to multiple raw materials suppliers and industries, contributed to the global crisis.

MES as an application provides clarity across the supply chain. When specific parts or assemblies are being used in higher or lower than usual volume, the data is captured and released to relevant stakeholders. Imagine demand for a particular item starts to surge and stock starts depleting more than expected. The MES can quickly and conclusively point out further courses of action, which may include but not be limited to, transfer of inventory from another point, alerts raised immediately on stock depletion and minimum inventory, immediate re-order from one or multiple vendors, adjustments of the minimum stock levels and future replenishment plans based on current trends applied across a particular period of time.

With the right MES in place, a medical device manufacturer gains clarity on the way in which raw material is being utilized, ordered and planned for across multiple plants within their manufacturing group. With the right stock levels set, the chance of facing an immediate setback becomes lower risk than competitors’. Companies with enough raw materials can remain competitive even in an inflationary market, as they maintain stocks and thereby are able to maintain prices, without compromising on margins. It is the visibility that the MES creates, coupled with intelligence it provides through creation of trends and predictions through application of AI, which leads to collaboration.  The ‘right’ MES enables companies to be agile enough to be ready to deal with anything.

Staffing and Manpower Issues. Any modern Industry 4.0 application should be device agnostic. It should accommodate different formats, screen sizes and UI nuances for ease of use and a heightened user experience.

The MES user functionality should be customizable into dashboards and apps deployed across mobile devices, allowing personnel to leverage the application not only when they are at a designated workstation but also when they are on the go. A seamless user experience can prove to be the difference between a successful MES deployment versus being stuck in pilot purgatory forever.

In addition to the user experience, the MES should act as a bridge between the personnel deployed across the process and the new automation installations. MES allows workers to not only to train on how to use these new tools, providing VR-based tutorials and AR-enabled KPI monitoring, but it also allows them to control and assimilate new technology in their work life.

Delivering a seamless user experience however, depends not only on how responsive and intuitive the MES is as an application, or that it is no code and easy to configure, but most importantly, whether or not the application itself is well suited for the industry segment.

The medical device industry is subject to stringent regulations, process, product and software validations, and operator training and certifications. This means the MES vendor must have deep domain expertise and provide a time-tested and proven application. The MES should enable a quick deployment and enhanced user experience, and incorporate all fundamental industry requirements not only towards operational execution and improvement, but also to satisfy industry regulations and compliance. Automated validation, forms with electronic signatures and risk-based product and quality management are a few of the key deliverables medical device manufacturers should look for in the MES application they choose.

The trends in medical device are not only in response to a temporary market shift, but reflect a fundamental change in the way supply chains and demand will perform in the future. A MES becomes a strategic weapon to ready your manufacturing processes to meet these changing, and challenging demands head on.