The impact of the COVID-19 restrictions and the rise in e-commerce have squeezed the global healthcare supply chain.

Building a more resilient network of logistics centres and storage facilities has therefore become an imperative for many logistics services providers.

Frost & Sullivan research has shown that healthcare providers across the globe could face a decline in operating margins of up to 30%, due to costs associated with regulatory reforms as well as general reimbursement.

As a result, they are often forced to cut back on the procurement prices of products offered by medical technology companies. This means that on the original equipment manufacturer (OEM) side of business, medical technology companies have to look internally for savings as research-led innovation or manufacturing cost management alone cannot bridge the gap.

Service Solutions 

Supply chain and logistics are major areas where costs savings can be achieved for a medical technology company: According to McKinsey, supply chain transformation not only results in a 10-20% improvement on profit margins and inventory days of supply (DoS), but also allows them to offer additional service solutions to their hospital customers.

Effective Supply Chain Management Strategy 

An effective SCM (Supply Chain Management) strategy for medical technology companies should focus on overcoming the fragmentation in inventory management by giving an OEM (Original Equipment Manufacturer) the ability to base consignment stock on market demand. This will enable companies to have high product visibility across the supply chain, which results in optimised stock keeping while reducing the cost of inventory holding and improving logistics as more products will be in circulation in the market.


To improve operational aspects of supply chain, most medical technology companies are investing in technologies that enable real-time tracking of assets to forecast demand and improve workflows.

“Many pharma companies are taking advantage of digital technologies, including cloud, robotic process automation and Internet of Things,” says Stephen Meyer, senior research director, Gartner Supply Chain Practice. “This can be leveraged for ‘smart’ products that result in better prescription adherence and more accurate dosing, as well as for new supply chain capabilities, like real-time shipment tracking that ensures products are delivered on-time and at the correct conditions.

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