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This was my first year attending LogiMed, a conference for supply chain experts in the medical device field, and I found the sessions to be focused and the dialogue around the event informative. I discovered that many companies, regardless of segment and size, were battling the same woes—increased scrutiny, consignment, visibility, data that hadn’t been properly utilized.
Many of the topics were common refrains from the last few years, according to several of the attendees I spoke to. Several experts said that they had been hearing about the same obstacles for years and years. Jerry Brown, Vice President of Global Supply Chain for X-spine Systems, part of Xtant Medical, expressed surprise that the segment had not evolved further.
“It’s amazing that we’ve been so blind for so long. We just build a bunch of stuff and throw it out there and we hope something sells,” he said. “When you need to put your hands on your inventory, often you don’t know exactly where it is in the world.”
GPS
Brown and I broke away from the conference to discuss some of the technologies with which X-spine has had success. Specifically, he made reference to an older technology he’d used at previous orthopaedic companies, which X-spine has begun to utilize more fully.
“I’ve had good luck with GPS technology, believe it or not; particularly with large assets that are rolling around in cases or carts,” he said. “Slap a GPS tracker on that and it’s a game changer to know where it is. I’ve had experience with this on a company’s largest revision knee surgery set, it was like eight rolling cases on wheels.”
That technology gives Brown and his team more visibility on their inventory. That, in turn, helps free up time throughout the chain.
For Brown’s team, a key aspect of adding the GPS tracker was communication with the sales rep. “Previously, the sales rep would have to sit around waiting all morning for the set to be delivered. Now the rep gets an email when the GPS tracker crosses the geo-fence of the hospital,” he said. “It takes fifteen minutes to run to the hospital, check the device in and get it to where it needs to be.”
I spoke with other experts at the conference about the trends and technology they see pushing the supply chain segment forward.
Cold Chain
Robin Hooker is UPS’ Director, Healthcare Marketing. He said the evolution of orthobiologics, and their integration into other segments, could create new needs for the orthopaedic supply chain, specifically for cold chain, or temperature-controlled shipping for equipment or goods that must be stored and transported within a particular temperature-range. That means storage locations and shipping vehicles must provide the ability to control temperature in a specific range.
Hooker points out that having more cold chain technology could create brand new obstacles, like managing temperature within trucks, but the rise of cold chain would also create more opportunities for connectivity and better collaboration.
“At the same time, that means more risk mitigation and higher value. You could dramatically increase the cost of implants when they’re infused with something that is not frozen and not ambient, but must be maintained in a two to eight degree temperature range,” he said. “That can be complex, because you have a high/low bandwidth and there’s not a lot of room in between. If there’s an excursion above or below…we’re all familiar with implant recall commercials and things that have gone wrong.”
To demonstrate the complexity of cold chain logistics, Hooker added that the trend could even complicate what UPS does.
“A secure cold chain could complicate some of our Forward Stocking Location (FSL) network processes as well, if that’s the look of implants in the future. We may have a different model for temperature sensitive implant processes as well. It’s definitely an area that’s in flux,” he said.
RFID
I also spoke with Hooker’s colleague, Josh Cannon, Marketing Strategy Director, Global Strategy, Healthcare Logistics. Like many experts, Cannon predicts that UDI will have a wide-reaching impact on orthopaedics. Specifically, he believes that radio frequency identification (RFID) technology will see a significant uptick in usage. It’s also another example of a technology that other industries have embraced, but orthopaedics has mostly left sitting on the shelf.
“To me, RFID is something that the retail industry has embraced but medical technology has not yet. I think that’s the next evolution,” he said.
Cannon noted numerous ways that companies can and are utilizing RFID.
“You see manufacturers put it on the head of every screw, which is expensive. We do it by tray level. I’ve seen providers actually RFID the bag. It’s very interesting,” he said.
Cannon added that he believes UDI will have a positive impact on orthopaedics overall.
“You can make decisions based on two things: good data and good visibility. If you have good data, good visibility and provide that data to all of your key stakeholders (providers, 3PLs, service reps), give them complete visibility, then the supply chain can make decisions,” he said.
Automation
Two separate third-party logistics providers (3PLs) said that automation is changing supply chain management for all industries, and will have an impact on orthopaedics sooner or later. As futuristic as some of the technology sounds, Steve Downey, Senior Vice President, Healthcare for OHL, said that automation of all kinds is already in use with some hospitals and OEMs.
“Robots are in use in warehouses, in-hospital delivery and now even drone delivery. That automation will become more accessible in cost and programming, allowing for wider access to it,” he said. “Driverless vehicles will be great at delivering supplies around a hospital network, or from an orthopaedic supplier’s local depot to its customers, without a representative being involved.”
Echoing Downey’s sentiments, Chris Franzen, Vice President, Sales & Operations for Shipware, said that robotics and automation are game changing technologies that will become de rigueur in the next ten to 15 years. He also said there are many wrinkles yet to be ironed out.
With drones, for instance, Franzen allows that they could provide faster delivery, fewer accidents and less impact on crowded streets and highways.
However, questions linger about their use moving forward.
“There are concerns with air traffic constraints, drone regulation, privacy issues,” he said.
He did, however, say that autonomous trucks could greatly reduce the stress from insurance costs, driver shortages and the high cost of training. While that technology is still in its infancy, Franzen pointed out that some of its forebears are already in the market for consumer-sized vehicles, like adaptive cruise control, lane keep assist and self-parking (i.e. cars that parallel park for you).
Conclusion
While many of the technologies discussed have been around for years, it seems that OEMs are just starting to experiment with their usage or fully leverage their capabilities. Additionally, the advent of new regulations (like UDI) and new shipping requirements (like cold chain) have caused an increased need for equipment and data that can better track inventory. One of the expressions that I heard over and over again from attendees was, “My company is at a tipping point,” or “We’re coming to a tipping point.”
Many of these OEMs feel that they are now in the crosshairs of cost-cutting measurements, or will be soon, so now is the time to explore, investigate and implement new technologies to gain better control of inventory visibility—or to explore new distribution models, perhaps utilizing 3PLs and Forward Stocking Locations.
Chris Mosby is a BONEZONE editor.
