Managing Medical Devices Distribution Challenges to Simplify Supply Chains

Medtech Business Review | Wednesday, April 12, 2023

Many challenges have forced industry leaders to adapt, including labor, cost increases, disruptions of raw material supplies, and demand growth.

Even as healthcare needs worldwide increased, the medical device industry was especially impacted by delays and cancellations of elective surgeries, long lead times, and significantly higher costs. In the last 30 months, extensive and unprecedented supply chain disruptions have involved raw material shortages, labor shortages, sterilization constraints, and cybersecurity concerns. It has been challenging for industry leaders to cope with long-term labor, cost increases, raw material supply disruptions, and increased demand by reshoring manufacturing capacity at multiple supply chain levels and driving sustainable improvement. Over the coming months and years, FTI Consulting examines the industry's challenges as it struggles to regain stability.

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Policy, resource availability, and accepted practice are all likely to change significantly due to many of the following challenges.

Remote Work: It is clear from overwhelming evidence that most Americans prefer to work from home. The Pew Research Center found that 59 percent of Americans who can work from home do so nearly all the time. Most healthcare employees do not have the luxury of working remotely, and manufacturing employees have fewer remote work opportunities. Despite the growing desire for remote work, many healthcare workers still require that option.

Shortage of skilled technicians: The outlook for the industry is positive. The current and projected availability of skilled technicians differs from the projected demand. A large number of programmers and machinists are entering retirement. Researchers claim that college degrees have been long-standing over the past two decades, and skilled labor has been downplayed by society, reducing the number of young people entering this field. The need for skilled technicians is most severe outside medical device clusters. The high wages in Massachusetts and the potential for career mobility in the state attract and retain medical device manufacturers. Despite the high labor costs, they found skilled technicians. Even though the concern is about the next ten years, there are no immediate concerns regarding labor costs or availability. While this may relieve smaller firms, large industry giants still need to be staffed.

Ethylene Oxide Commercial Sterilization Facilities: Legal and environmental groups will press companies to reduce EtO emissions and explore alternative sterilization methods. In the long run, companies might save resources by doing so. In addition to increased scrutiny of high-level disinfection, the FDA is putting additional pressure on sterilization capacity. Certain medical devices are being discouraged from being disinfected at high levels (HLD) in favor of more effective sterilization methods. Smaller providers without their sterilization equipment have limited access to sterilization equipment. Other sterilization methods include heat, dry heat, radiation, hydrogen peroxide vaporization, and other gases—some company leverage ultraviolet-C (UVC) light technology for high-level disinfection in clean rooms. The robot uses a controlled dose of UV light to sterilize against viruses and bacteria. The technology has yet to directly reprocess or sterilize medical devices.

Cybersecurity: Healthcare is particularly concerned about cybersecurity, a serious concern in any industry. In addition to the sensitivity of Personal Health Information (PHI), the Internet of Things (IoT) exposes patients to direct intervention with life-saving therapies provided by medical devices. Patient safety risks increase with the increasing use of digital technology for diagnostics, recording, treatment, and practice management.

Medical device supply chains across the United States and worldwide face unique and evolving challenges. These phenomena result from technological advancements and require close monitoring and decisive action to meet market demand.

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