It’s time for Medical Device companies to Grow Up!

Kids in high school are on the brink of where they must grow up – as is the medical device industry. And even the adults are having fun!

The purpose of a business is to make money – and in manufacturers’ case, they do that by making things.  Seems pretty obvious, but when you wade into the heavily regulated world of medical device manufacturing, confusion reigns on that point.  Because these companies spend so much time worried (with some cause) about regulators and auditors calling them onto the carpet, medical device companies often act as though compliance to regulations is the goal, and not just the requirement to be in the industry.  (Remember that from school?  Your goal sometimes seemed to stay out of the principal’s office – even when you were supposed to be learning something…)

Until recently, medical device companies could get away with some immaturity.  The profit margins were so high that being inefficient in production and focusing on a cumbersome approach to compliance was acceptable.  That is changing.

Where markets are growing, the cost of living simply won’t support some of the prices – and even if they did, single-payer systems in most of the world are negotiating slimmer reimbursements for many devices. So the pressure is on, and some medical device manufacturers are beginning to achieve big improvements in their business performance.  In a recent report using just the medical device respondents from the MESA study Pursuit of Performance Excellence we divided out the companies using MES and Plant Dashboards from everyone else.  Those using these plantwide information systems are far more likely to have improved on cash flow, cost of quality, and manufacturing costs as a percent of revenue.  They are staying compliant based on gaining information that is accurate and timely about production.

We call the report Redefining Performance Goals to Unlock Business Improvements – and we truly believe medical device manufacturers must do this soon.  When an industry is young, you can focus on innovation and even compliance at the expense of profits.  Now it’s time for the medical device industry to grow up.  Grown ups are the ones who earn the money, and they still have fun.  In fact, you’d be surprised how much more fun you can have during an audit with strong integrated information systems in place – pulling up screens rather than pulling out boxes of documents…

 

This photo is from the Independence Day Parade in Barnstable Village 2012, the Dennis-Yarmouth High School marching band and flag corps.

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