Are Medical Device Supply Chains Ready for the Healthcare Revolution?
As the public continues to wait for a degree of normalcy following the COVID-19 pandemic, it is becoming quite clear that in certain industries, “normalcy” as we once knew it will never be the same. The healthcare industry is one such example, and medical device supply chains must be prepared for the new challenges they will soon face.
A Changing Market
According to a new report from Bonafide Research, the global telehealth market is expected to be valued at $171.13 billion by 2030, reflecting an annual growth of 20.5% between 2020 and 2030. The primary driver of this growth will be a shortage of physicians, advancements in telecommunications, and the continued expansion of healthcare access to accommodate stay-at-home orders as the COVID-19 pandemic continues. For healthcare equipment manufacturers, this will mean a pivot away from costly, highly-specialized medical equipment designed for hospitals and clinics in favor of portable and/or wearable, consumer-focused devices that allow patients greater flexibility in terms of self-diagnosis and self-care.
Such a transition will come with a variety of consequences. Rather than creating supply chains with long-term production and servicing in mind — with lifecycles commonly as long as 20-30 years — many medical device supply chains will now more closely resemble other industries, such as consumer electronics, which often complete production cycles in as little as 2-3 years. This will require having a wider network of component suppliers and significantly greater dependency on market availability as inventory is needed.
In many cases, it may also necessitate medical device manufacturers to enter into generic component and semiconductor markets, which would put them in direct competition for inventory with consumer electronics manufacturers. Facing such conditions, the likelihood of inflated pricing, obsolescence, and extended lead times will become much more commonplace.
Rethinking Medical Device Supply Chains
For future medical device supply chains and any other supply chain that relies on purchasing large quantities of inventory, one of the inventory management solutions from Partstat will help them cope with the realities of a competitive market.
For example, one inventory management solution will allow Partstat to leverage its unlimited buying power to purchase inventory direct from the component manufacturer. Not only does this preserve the customer’s upfront working capital and insulates the company from risks such as extended lead times and price inflation, but large-scale bulk purchases of inventory also open up possibilities for significant discounts direct from the manufacturer. Additionally, Partstat will also handle shipment and storage responsibilities for the inventory, keeping it in secure, industry-leading facilities until needed for production while saving the customer an average of 42% in annual inventory carrying costs.
The future of the healthcare industry is a bright one, and it’s one that will see more people than ever have access to low-cost, professional-quality care, but the medical device manufacturers who make this future possible will need the help of third-party supply chain partners to prepare their infrastructure for a new, fast-moving, competitive market.