Revitalizing Demand Management: How it Helped a Medical Devices Manufacturer to Enhance their Demand Chain Visibility
Why Demand Management is Important?
Demand management is the process that helps organizations to generate new ideas and needs during the creation of a service/product portfolio. Demand management is successful when the final output helps prioritize and select a valuable strategically aligned portfolio. The more the process can capture the real strategic commitment of the organization and merge it with the ongoing activities, the more demand management process is a success factor in building the correct portfolio.
The following are the most important steps in developing an effective demand management process:
- Gather and optimize data to create a demand management repository
- Leverage sales force information
- Manipulate, mold, and analyze (MMA)
- Develop and implement a set of methods to create a demand estimate or forecast
Owing to the fluctuations in market demand, medical devices manufacturers are increasingly leveraging market intelligence and demand management techniques to increase efficiencies and tackle challenges that affect market growth. It includes challenges arising due to advancements in MedTech, the need to identify long-term savings opportunities, and the challenges arising due to demand-supply shortages.
Several medical devices manufacturing companies feel that the processes associated with the establishment of robust demand management systems are usually complicated and arduous. Undoubtedly, there are many challenges, but focusing on a few simple steps and adopting a systematic approach can make this journey a lot smoother, and lead to a satisfactory outcome.
Demand Management in Healthcare
The client is a leading US medical device industry player based in Michigan. The medical device’s manufacturer is one among the top ten companies that hold the largest market share in the medical device industry in the US. The company is well-known for manufacturing a wide range of healthcare devices including medical implants, dental equipment, irradiation apparatuses, surgical and medical instruments, and In-vitro diagnostic equipment.
The Business Challenge
The US medical device industry is one of the world’s largest industries and is constantly driven by the emergence of new technologies and innovative manufacturing methods. Though medical devices manufacturing companies have witnessed unprecedented growth in innovative and improved technologies in the last decade, such dramatic advancements have also given way for several challenges that loom over the medical device industry. The client, a Fortune 500 medical devices manufacturer has been keen to capitalize on these changes through better forecasting and demand planning. To achieve this business goal the client had to enhance their demand management process by considering several factors that affected the demand of their medical devices.
Problem Statement 1
With growing advancements in medical technology, the medical devices manufacturer was looking at implementing a robust method that would help them protect margins with products that elude commoditization.
Problem Statement 2
The medical devices company faced increasing pressures to adapt to a fast-evolving marketplace by efficiently catering to the needs of the growing population.
Problem Statement 3
The client faced major challenges in identifying long-term savings opportunities and areas for cost reduction to facilitate product design and development.
Problem Statement 4
By employing an effective demand management process, they wanted to effectively manage the demand-supply shortages.
Problem Statement 5
The medical devices manufacturing client also wanted to explore the potential impact of demand management strategies on patient decision-making in medically non-urgent and urgent scenarios.
Owing to several such challenges, the performance of the medical device industry falls short of its remarkable potential. This can also be attributed to the weaknesses on the demand side of the market, in the way products are designed, developed, and marketed. Despite the advances in supply chain management, the inventories of medical device manufacturing companies consist of slow-moving SKUs with a high risk of obsolescence, expiration, damage, and recall.
This demand management case study throws light on the core demand management principles and ensures the alignment of financial incentives with the organizational capabilities to evaluate the US medical device market. Emphasis is placed on the challenges posed by inefficient demand management and demand planning processes, organizational fragmentation, and information inadequacies.
Poor healthcare access and the growing demand for advanced medical devices represent a management dilemma between effectively managing the demand and costs. The concept of this case study revolves around scrutinizing the concept of demand management to examine the complexities of managing demand for medical devices in the US medical device industry. The US medical device industry, today, is characterized by recurrent innovations in products and procedures that improve the ability to diagnose and treat previously intractable conditions. However, it faces challenges due to the deployment of inefficient mechanisms that hinder the development of low-cost manufacturing methods.
To help the medical devices manufacturer tackle all the above challenges, the demand management experts at Infiniti Research developed a comprehensive four-step demand management process. This process focused on delivering an effective demand management process to help the client accurately predict, plan, and meet the demands of the global customer base. The demand management process offered an accurate manufacturing plan across all medical devices within the organization. Our solutions not only helped the medical device manufacturer to improve forecast accuracy but also enhanced supply chain visibility, which, in turn, helped them drive revenue.
Below are the different phases involved in the development of a demand management process that can go a long way towards ensuring success.
The initial phase revolved around segmenting the market based on sales and marketing outcomes to analyze and anticipate different customer needs and long-term market trends. This turned out to be a fundamental aspect that helped them align their business model and supply chain functions accordingly. Whilst your business may have identified and capitalized on potential customer segments, the emergence of new market trends and technologies offers a plethora of new opportunities for companies to expand their market share.
Phase 2: Documenting the process roadmap
An organization must have a clear and documented process roadmap depending on the maturity of the demand planning process. The second phase revolved around the development of a process roadmap, which included gap analysis, a detailed analysis of success factors, and the roadmap for each stage.
Phase 3: Bridging cross-functional disconnects
This was one of the biggest challenges in developing the demand management process. However, the cross-functional disconnects were overcome by establishing KPI’s that were to be jointly owned by the client’s sales, marketing, finance, and supply chain teams.
Phase 4: Implementation of the required processes and systems
It is imperative to understand the learning curve required to implement demand forecasting tools and the demand planning setup.
With such a fine-tuned demand forecasting process in place, the client was able to tackle most of their challenges. The heightened visibility of their demand chain enabled them to capitalize on new opportunities to enhance patient outcome and drive revenue. The demand management process also delivered tangible benefits in their supply chain, most notably the cost savings obtained from inventory management and demand planning.
Why Partner with Infiniti Research?
In today’s increasingly competitive business world, there is an ongoing need to leverage market intelligence solutions across all aspects of your business processes. To survive in the long-run, companies have to possess the capability to react quickly to the ever-changing supplier and market dynamics. This is where Infiniti’s expertise as a market intelligence solutions provider comes into play. Market intelligence solutions enable organizations to gain a holistic view of the market from various perspectives. The insights offered by our market intelligence experts help businesses to develop customized products/services and marketing communication strategies that help customers distinguish the brand from their peers.
Consider what it would take to consolidate and optimize market data into the essential information you need to run your business. Our demand management process helps you to consistently gather, review, and execute plans based on critical information. Want to know how? Request a FREE proposal below.