With the rising need to delicately balance medical devices’ security and patient safety, the medical equipment industry is facing several challenges like reducing costs, better demand management, improving efficiency, and allocating resources effectively. The need for following demand management best practices is increasing for medical devices manufacturers due to the surge in the demand for better healthcare products.
Poor demand management can result in operational inefficiency and issues pertaining to fulfilling orders, which emerges concurrently with an increase in the demand. Additionally, it can also lead to a loss of space, time, and can increase the operations cost. Therefore, it is important for medical devices manufacturers to follow some of the demand management best practices that can help them in tracking the medical devices better and stay ahead of their competitors.
At Infiniti Research, we understand the impact that following demand management best practices can have on your business. And to help companies manufacturing medical devices, our team of experts has highlighted three demand management best practices that companies must follow to improve the efficiency of their supply chain, reduce forecast errors, and become market leaders.
With an enormous market size of $156 billion, the medical device industry in the United States remains the largest in the world. Companies in the medical device industry consist of articles, instruments, apparatuses, or machines that are used in the prevention, diagnosis or treatment of illness or disease, or for detecting, measuring, restoring, correcting, or modifying the structure or function of the body for some health-related purpose. Although patients are the end-users of medical devices, manufacturers ideally focus their efforts towards selling their products to healthcare providers who in turn use them to serve the needs of patients.
Majority of the companies in the US medical device industry are concentrated in regions known for other high-technology industries, such as microelectronics and biotechnology. The states with the highest number of companies in the medical device industry include New York, California, Florida, Michigan, Pennsylvania, Massachusetts, Minnesota, Illinois, and Georgia. Compared to several other industries including telecommunications, automotive, and defense, the medical device industry invests a higher percentage of their yearly revenues into product innovation, reflecting the competitive nature of the industry and constant innovation and improvement requirements of existing technologies.
The medical device industry is embarking on a new phase of change. In this blog, our industry experts discuss some of the key factors influencing transition in this sector.
The expectations of stakeholders in the medical device industry are changing over time. Patients expect superior service and care models, physicians require data from multiple sources to be brought together in one place, and payors seek lighter financial burdens and better real-world outcomes. Such mounting pressure is urging companies in the medical device industry to revamp their offerings and stand out in today’s increasingly crowded market.
The rapid technological growth rate in the medical device industry is undoubtedly the backbone of this sector. But not long ago, the industry was wrestling several challenges and struggling to implement and adopt advanced technologies. Some of the impediments leading up to this included the paucity of talent, incomprehensible technical complexities, constantly changing regulations, and limited leadership mind-share. In fact, just a decade ago, the integration of new and advanced technologies in the medical device industry was far behind when compared to other industries such as Telecom, Retail, and Automotive. The reality still remains that companies in the medical device industry still lag in tapping into customer and business model-led opportunities and adopting advanced technologies such as IoT, big data, artificial intelligence, augmented reality, and robotics. With only a handful of key players in this sector building sizeable businesses by leveraging the available opportunities and the upsurging competition from non-traditional players such as start-ups, players in the medical device industry are in the dire need to revamp their strategies.
Change in customer expectations
Earlier, the delivery of digital healthcare had limited reach, was of low quality, and highly expensive. However, modern healthcare consumers are tech-savvy and expect the digital intervention to transform their healthcare experience. This shift in consumer behavior has elevated the focus on patient-centric health care and has become a major driver for the adoption of advanced technologies among OEMs. Players in the medical device industry are focusing on personalized healthcare solutions and devices to gain a bigger slice of the market.
Shift in business models
The modern day medical device industry is going through a tectonic shift in business models. The increased connectivity between devices, physicians, and consumers are inflating the demand for high quality, personalized, and patient-centric care. Today, the volume-based fee-for-service models in the medical device industry are shifting to new incentive models that focus on value-based metrics. Though traditionally the OEMs have been able to compete with conventional business models without much differentiation, a long-term strategy would necessitate OEMs to create innovative and sustainable business models that will result in efficient healthcare delivery, reduced costs, and improved medical outcomes.
Regulations regarding patient privacy and safety
There is a colossal amount of patient and healthcare data being generated each day. This spawns fundamental questions about patient privacy and safety. Albeit the incrementally, regulatory authorities are still evaluating out the implications of new technologies on patient security and care. In reality, apart from becoming heavy on the pockets for healthcare companies, data breaches also give rise to serious concerns regarding patient safety. Therefore, the need to strike a balance between advancements and protecting patient security and safety is, therefore, paramount.
Know more about Infiniti’s market intelligence solutions for the medical device industry and how our solutions can help businesses in proactive decision-making.
With the rising cost of healthcare services and shortage of healthcare facilities and labor, cost-effective home care medical devices will be even more in demand in the coming future.
Despite innovation and changes in the medical devices industry, the future will not be without challenges and concerns. Small and start-up companies are particularly vulnerable to the problem of increasingly diminishing venture capital availability, which can cause crippling delays to new product launches. Indeed, this lack of funding can adversely affect the broader industry by limiting growth and innovation. Above all, it will no longer be enough for medical devices manufacturers to simply offer the best quality dental implants or most clinically successful instrumentation. Instead, companies will need to re-assess their product offerings and include a range of tools that are tailored towards hospital groups and physicians, such as applications and services that help physicians monitor patient outcomes, guide hospitals towards cost savings, and assist in enhancing clinical outcomes.
- The client: Dental implants manufacturer
- Size: >$5 billion in revenue
- Area of Engagement: Competitor mapping
The client – a leading manufacturer of dental implants based out of Canada – approached Infiniti to conduct a competitor mapping engagement. The dental implants manufacturer with numerous manufacturing units spread across geographies was facing predicaments in profiling their competitors and eliminating potential service bottlenecks. As a result, the client wanted to better position their product and service offerings, profile potential buyers, offer customized services, and improve their business performance. Furthermore, the manufacturer of the dental implants wanted to leverage technologies to improve their prevailing offerings in the medical devices space.
How Can Competitor Mapping Engagement Help Dental Implants Manufacturers?
Competitor mapping engagement gives a holistic view of the competitive landscape and how the competitors have positioned their product and service offerings. With the help of competitor mapping, leading manufacturers of dental implants can profile the potential competitors, their value proposition, price level, and approximate market shares. Furthermore, competitor mapping helps firms gain an in-depth understanding of the organization’s weakness and shortcomings as compared to the other competitors.
Summary of our competitor mapping solution
Infiniti’s competitor mapping experts carried out a qualitative and quantitative research comprising interviews and discussions with leading stakeholders in the medical devices space to help the manufacturer of dental implants gauge the strategic plans of the competitors and stay ahead of the competition. The experts also collated information from a wide array of exclusive sources such as company presentations, paid industry databases, and industry forums.
The Solution Benefits and the Business Impact
With the help of Infiniti’s competitor mapping engagement, the manufacturer of the dental implants conducted a comprehensive SWOT analysis, which helped them limit the bottlenecks and improve the overall efficiency of their products and services. Additionally, the client identified costs associated with their product offerings and was able to compare that to the competitors. This subsequently helped them to devise cost-effective products and services to the customers and gain a competitive advantage.
In the coming years, companies will no longer be able to earn top margins by just selling medical devices and clinical features to established market spaces. Companies should rather look at new segments, particularly new end-to-end resolutions to earn additional revenue and maintain substantial margins. Moreover, the commercial model of medical devices is expected to change, as call points and agreement decisions become centralized, purchasers are increasingly establishing comparative value and evidence of efficacy.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the medical devices market
Despite the recent technical developments in the medical device industry, leading manufacturers of medical devices face challenges pertaining to regulatory compliance, product quality, and market expansion.
The 21st century has ushered in an era of business which plausibly is the most challenging in history. Since the market for medical devices has weakened globally, several players looking to enter newer markets face several challenges including – international competition, financial crisis, and changing government policies. However, medical devices manufacturing firms should cope with these challenges to withstand the growing competitive pressure.
However, for a startup that is relatively new in a particular market, it is best recommended to invest in a detailed market opportunity assessment to gain comprehensive insights into the market conditions prior to expansion.
The Business Challenge
- The Client: A medical devices startup
- Revenue: ~$5 billion
- Area of Engagement: Market opportunity assessment
To understand the market expansion opportunities in the Asia Pacific region, the client – a medical devices startup – approached Infiniti to engage in a market opportunity assessment. The client wanted to gain detailed insights into the market landscape of the target region. Their primary objective was to evaluate the viability of market expansion based on the competitive environment and regional players.
Also, with the help of the market opportunity assessment, the medical devices client wanted to gauge various factors affecting market expansion in the specific region.
How Can Market Opportunity Assessment Help Players in the Medical Devices Market?
Market opportunity assessments offer detailed insights into the market landscape, which help businesses to identify the market opportunities and risks prior to expanding their business offerings.
In today’s business scenario, medical devices manufacturers are under inexorable pressure to stay relevant in a rapidly evolving marketplace. Infiniti’s market opportunity assessment enables medical device companies to gain a detailed understanding of the industry barriers, challenges, and opportunities to devise precise business expansion plans.
Summary of Our Market Opportunity Assessment Engagement
With the help of Infiniti’s market assessment, the medical devices client was able to expand their business by gauging the growth projections in the Asia Pacific region. The solutions offered also helped the client to identify relevant data and use it to establish a competitive position within the geographical segment.
Furthermore, to help the client identify the market dynamism and future potential in the Asia Pacific region, the market opportunity assessment experts at Infiniti conducted a detailed market survey to help them gain a better understanding of the medical device industry. The approach included primary and secondary research methodologies coupled with qualitative and quantitative data collection procedures. The experts also reached out to various stakeholders in the medical devices market.
Solution Benefits and the Business Impact
Infiniti’s market opportunity assessment experts offered detailed market insights that helped the medical devices firm to identify barriers to entry and market requirements and gain a stronger foothold in the new geographical segment. Also, with the help of our solutions, the client was able to understand the market for the particular product group and devise effective strategies for long-term success.
The medical devices industry has witnessed a rollercoaster of changes, new challenges, and impressive growth. Owing to the rapid medical advances, the medical devices sector is set to experience massive growth in the coming years. While the wearable medical devices segment is still in its relative infancy, leading medical devices manufacturing companies are already focusing on delivering new and innovative solutions in an attempt to improve business growth.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the medical device industry.
The rising development of medical devices with millions of product variations presents a major challenge for anesthesia machine manufacturers.
Despite recent developments, manufacturers of medical devices face several challenges pertaining to regulatory compliance, product quality, and data security among several others. To succeed in an expanding global market space, manufacturers of medical devices must overcome various challenges.
Despite the recent developments, medical devices manufacturers face several challenges pertaining to regulatory compliance, product quality, and data security among several others. They are constantly challenged along the way in terms of design, research, corroboration, and in bringing their devices to a competitive market in a cost-effective manner.
The Business Challenge
- The client: An anesthesia machine manufacturing company
- Revenue: ~$800 million
- Area of Engagement: Market analysis assessment
With an objective to drive strategic growth through systematic expansion into complementary product categories in the medical devices category, the client – a leading anesthesia machine manufacturer – approached Infiniti to engage in a market analysis study. Since the client was one of the new players in the medical devices market, they were facing difficulties in understanding the dynamics of the market. The primary objective of this engagement was to assess the attractiveness of the newer market segments as a potential source of future business growth.
How Can Market Analysis Help Companies in the Medical Devices Sector?
In today’s competitive business scenario, medical devices manufacturers are constantly pressurized to innovate and enhance their offerings. Many companies that could potentially benefit from a market analysis study aren’t familiar with the benefits it offers. It acts as the key to identifying new market opportunities. Investing in a market analysis study also helps to identify the tweaks that may be required to enhance your product or service offerings. Hence, it can be said that it is an invaluable tool that is worth the investment for long-term planning.
Summary of our market analysis engagement
To help the client gauge numerous factors influencing their decision-making process in the medical devices industry and to identify the emerging trends, the market analysis experts at Infiniti followed a strategic research approach. The approach included primary and secondary research methodologies, which utilized primary data from approximately 300 channel customer interviews and secondary data gathered from multiple sources.
Our team assessed the size and growth rate of the market, evaluated the competitive landscape, analyzed the value chain economics, and determined customer needs. The market analysis experts also reached out to various stakeholders in the medical devices industry to understand the factors that are influencing the market.
Solution Benefits and the Business Impact
With the aid of Infiniti’s market analysis engagement, the anesthesia machine manufacturing firm gained comprehensive insights into the opportunities present in the medical devices market. Also, the client was able to develop a brand concept with the help of expert recommendations offered by our market analysis experts. Our solutions also allowed the client to devise a go-to-market strategy, commercialize the delivery system, and efficaciously pilot test the concept. As a result, the medical devices was able to successfully roll out their products both domestically and internationally.
Rapid technological developments are impacting the medical devices industry. Owing to regulatory compliance concerns, medical device manufacturers haven’t yet fully utilized machine learning and AI. Though it still may be some time before industry-wide adoption, eventually patient care systems will take maximum advantage of what these technologies have to offer. With trends such as this influencing other markets, it’s safe to say that medical devices sector will follow suit.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the medical devices industry.
Over the past couple of years, FDA-regulated industries such as the medical devices industry have witnessed a myriad of changes. The advent of value-based reimbursement models and accountable care has resulted in a seismic shift in the way top medical device companies operate. In the wake of this new era, focusing on data and the value of medical devices will not be enough to boost ROI. This has forced medical device companies to look for new avenues to boost revenues and profitability. Today, buyers expect medical device companies to offer solutions that bundle device, data, and analytics for improved decision making. And with the shift towards value-based care, medical device companies must offer solutions that can deliver actionable insights for use in existing electronic medical record systems. Our analysis of the global market landscape shows that the medical device companies are facing challenges in terms of:
- Adapting to the shift towards value-based models
- Maintaining profit margins with products that elude commoditization
Meeting such challenges can be made simple if medical companies leverage an interoperability platform to devise solutions with excellent data integration and aggregation capabilities. Apart from the challenges mentioned above, here are some of the other challenges faced by top medical device companies.
Increasing standards and overheads
Recently, there has been a drastic increase in the number of medical devices that are being manufactured and sent for approvals to the FDA. Studies indicate that the time taken for processing has increased by more than 55% in a span of five years. This poses a major challenge for medical device companies who are looking to outperform their competitors by launching more innovative products in the market.
Complexity of new medical devices
To stay on top of the competition, top medical device companies have started manufacturing products that are more complex and integrated when compared to their predecessors. This increase in the complexity results in a rise in the cost of field service and repair processes. Another point to note here is the fact that due to the increasing complexity of devices, the cost of training field service specialists and engineers has doubled.
Meeting customers’ expectations
Today, people all around the globe have access to the Internet and smartphones. Customers, therefore, have numerous choices and demand more from medical device companies, especially in terms of implementing more aggressive SLAs. The end-users of medical devices are also demanding more from their reduced capital and are now asking for better incentives.
Shift towards home-based care
With the growing popularity of home health care services and POC tests, medical device companies have had to migrate towards the production of home-based health kits. This threatens to reduce the spend on capital programs for developing new lab equipment.
Reimbursement reductions and rising competition
The implementation of new schemes to reduce reimbursements for medical assays by insurers is reducing manufacturers’ ability to fund capital for their new devices. In addition, high competition from emerging companies, such as start-ups, will reduce the profit margins of top medical device companies and erode customer loyalty.
To know more about the major challenges faced by top medical device companies:
Over the past few years, the global medical devices market has been facing several revenue and profitability challenges owing to intense competition in the market.
The global medical devices market has witnessed a rollercoaster year with several challenges, transformations, and regulatory changes taking place at a rapid pace. Market players face multiple challenges owing to the recent trends in the industry which includes a shift in demand from rubber gloves to synthetic rubber gloves and an increase in capacity expansions by manufacturers.
Value-based reimbursement models and accountable care are causing a seismic shift in the global medical devices market. Owing to the evolving market landscape, the value of data and device alone will not be sufficient to ramp up sales. Instead, it requires a new take on solutions that bundle data and real-time analytics that healthcare firms, payers, and clinicians will want to buy. However, to improve decision-making, solutions have to provide actionable insights into the existing medical records and real-time data.
The Business Challenge
- The client: A surgical gloves manufacturer
- Revenue: ~$11.2 billion
- Area of Engagement: Market assessment
To assess customers’ purchasing behavior, usage, and awareness of their products, the client – a leading player in the medical devices market – approached Infiniti to engage in a market assessment study. The surgical gloves manufacturer wanted to analyze the market attractiveness in the surgical gloves segment to determine the possibility of strategic changes that could be incorporated to increase their competitiveness.
Moreover, with the help of market assessment, the client wanted to assess the viability and future growth potential in the medical devices market. Their primary objective was to conduct an objective and detailed evaluation of the potential of the new product that they wished to introduce. At the same time, the client was looking at increasing their market share by focusing on the needs of the most profitable market segment.
How Our Market Assessment Solutions Help Companies in the Medical Devices Market?
An effective market assessment study requires a comprehensive analysis of the market landscape-market trends, entry barriers, risks, competition, opportunities, and resource constraints. Whether your goal is to launch a new product or venture into the most profitable market segment, conducting a robust market assessment study acts as a vital step in determining the demands of the potential customer base.
Summary of our market assessment engagement
Infiniti’s market assessment engagement helped the medical devices manufacturing firm to increase their market share by about 5%. This was made possible by identifying customer demands and the most profitable market segments. The solutions offered also helped them accomplish three main goals – identify markets that had the highest potential, venture into a new market segment, and increase profit margins.
Furthermore, to help the client assess the market landscape and identify imminent market trends, the medical devices market research experts at Infiniti conducted a market assessment study that helped them cast a critical eye on the overall commercial environment of the medical devices market. The approach included primary and secondary research methodologies coupled with qualitative and quantitative data collection procedures. The experts also reached out to various stakeholders in the medical devices market.
Solution Benefits and the Business Impact
Infiniti’s market assessment experts offered end-to-end solutions that helped the surgical gloves manufacturer to identify the best market opportunity that aligned with their business goals. In addition, the solutions assisted the client to adequately assess – market value, customer behavior, global competition, and entry barriers. The client also gained detailed insights into the medical devices market, which enabled them to identify the potential entry points, leading to the development of a sustainable business model.
With several types of disposable surgical gloves available in today’s market, it might be difficult for organizations in this segment to understand and cater to the growing customer needs. To withstand the competitive pressure and gain a stronger foothold, leading market players are increasingly investing in other alternatives such as – capacity expansions, industry collaborations, and mergers and acquisitions.