The US medical device industry is one of the world’s largest industries and is constantly being driven by the emergence of new technologies and innovative manufacturing methods. Though medical device manufacturing companies have witnessed unprecedented growth in terms of innovations and improved technologies in the last decade, such dramatic advancements have also given way for several challenges that loom over companies operating in the medical device industry. Owing to the increasing challenges in the market, companies in the medical device industry are increasingly leveraging demand management solutions to manage and allocate capacity to meet the markets’ increased demands.
The client is a medical device manufacturer based out of the United States. The company is well-known for manufacturing a wide range of healthcare devices. Inconsistency in the product demand, owing to fluctuations in the market made capacity planning quite challenging for the client. Also, due to their inability to meet the rising market demand, the client was unable to maintain the right balance between supply and demand, which resulted in reduced profit margins for the company. This necessitated the need to capitalize on these market 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.
Other challenges faced by the client included:
- With growing advancements in medical technology, the medical device manufacturer was looking at implementing a robust method that would help them protect margins with products that elude commoditization.
- The client was facing increasing pressure to adapt to a fast-evolving marketplace by effectively catering the needs of the increasing population.
- The client faced major challenges in identifying long-term savings opportunities and areas for cost-reduction to facilitate product design and development.
- By employing an effective demand management process, they needed to effectively manage the supply-demand shortages.
Solutions Offered and Value Delivered
To help the client tackle all the industry challenges, the experts at Infiniti Research followed a comprehensive four-phased approach. The approach focused on helping the client accurately plan, predict, and meet the demands of the global customer base.
- The initial phase in demand management approach focused on 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 factor that helped them align their business model and supply chain functions accordingly.
- The second step in demand management process involved documenting the process roadmap, which included market gap analysis, a detailed analysis of success factors, and the roadmap for each stage.
- The third phase of the demand management approach focused on bridging the cross-functional disconnect. The cross-functional disconnects were overcome by establishing KPIs.
- The final phase in demand management process involved a detailed analysis of factors such as the number of consumers in the target market, demand for medical devices, proportion expected to buy the medical devices, anticipated timing of their purchase, and patterns of repeat purchases.
Insights obtained from Infiniti’s demand management engagement helped the client to formulate effective strategies for making smart decisions about inventory and production levels. This subsequently reduced the risk of stock-outs, resulting in lower holding cost and increased turnover rates. Also, the heightened visibility of their demand chain enabled them to capitalize on new opportunities to enhance the patient outcome and drive revenue.
Moreover, Infiniti’s demand management engagement also delivered tangible outcomes in their supply chain, most notably the cost savings obtained from inventory management and demand planning. Infiniti’s demand management solution further helped the client improve under-forecasting by nearly 3.5%, representing average savings of $7.2 million in a year.
Why demand management is important?
In today’s competitive world, a number of companies are leveraging demand management solutions to meet the evolving needs of their business at every level. Demand management is a business process that enables organizations to respond to emerging situations in an effective manner by maintaining the right balance between supply and demand.
Engaging in demand management practices helps organizations to avoid gaps in supply and demand and also promote better supplier relationships. Demand management techniques also play a major role in addressing external spending factors, arranging purchase orders, and eradicating waste.
Customer demands are extremely dynamic and unless organizations correctly chart out the demand pattern and ascertain the amount of goods to be produced, the chances of overstocking or understocking of goods are likely to happen. Using demand management solutions, companies can understand customers’ requirements and improvise on products that are not coping well in the market.
Why partner with Infiniti Research?
In today’s increasingly competitive business world, there is an ongoing need to leverage demand management 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 the 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 experts help businesses to develop customized products/services and marketing communication strategies that help customers distinguish the brand from their peers.