Optimised customer service2 May 2018
Hans Willems, a supply chain vice-president at Boston Scientific, talks to Lyn Eyb about the steps the company has taken to automate customer order processing in a resource-efficient way. He discusses process standardisation, and the challenges the medical device sector faces in continuing to streamline and improve procurement, distribution and customer service outcomes.
Technology is transforming every aspect of medical device manufacturing, from research and design to marketing, but nowhere is the impact more visible than in the distribution and customer service sectors.
Like every industry, the medical sector is increasingly looking for new and innovative ways to maximise efficiencies. Many improvements are coming from automation, which is accelerating every aspect of manufacturing. Advancements are also coming in the form of brand-new software-driven technologies.
Boston Scientific’s European distribution centre in Kerkrade, the Netherlands, is a world leader in using automation for medical device manufacturing and distribution. The site has 450 employees who deal with around 100 million units a year across 7,000 different products. Despite the high volumes, its success rates are near perfect. “Accuracy for on-time and customer services is high at 99.9%,” says Hans Willems, a supply chain vice-president at the company. “For on-time services, it depends a little bit on external influences; [for example], if there are snow storms or other weather [issues]. This, of course, impacts on us, but, generally speaking, our accuracy and on-time performance is very high.
“For shipping, we measure mostly in terms of parts per million (PPM) and we are in the area of 20–30 PPM. That’s a high level of performance,” he adds.
Handling yearly increases in volume accurately and efficiently has been made possible thanks to key automation improvements and a better, smarter use of technology.
“Our performance over the past decade hasn’t changed so much, we have always had high accuracy and customer satisfaction levels,” affirms Willems. “But we haven’t always been so high with our efficiencies. We have made big progress in terms of doing things better; dealing with our growing volumes and still getting those levels of performance is where, I believe, our achievement has been.”
Automate for success
Much of this success derives from the use of robotics. According to the International Federation of Robotics, global manufacturers are now using 74 robot units per 10,000 employees.
Boston Scientific has been ahead of the curve in the medical sector, where it has made the most of robotics technology. The company has been particularly innovative in its approach to automation at its Dutch distribution centre. The site, built in 2005, was earmarked to reach full capacity just ten years later in 2015–16. However, automated processes have breathed new life into the warehouse, which was running out of space.
“We have invested in new systems that make more use of the cubic space in the building,” Willems says. “We put a robotised system in place called AutoStore, for instance, and we now have 40 robots running in the distribution centre that make sure that the higher density of product storage is being achieved. We can, in effect, now use more of the cubic space in the building than we could before.
“That’s a high level of robotisation, and I think we are quite unique in terms of this automation. As far as I know, no one else [in our sector] is using this level of automation yet.”
But it’s not just in shipping and distribution: other areas of the business are embracing automated technology to streamline and standardise processes, while improving customer outcomes.
“On the customer service side, we are not at the same level of automation yet,” says Willems. “We are still dealing with SAP orders and this has not changed, but we are moving forward with all sorts of other small improvements. We are going for a wider interpretation of optical character recognition in that space [and] are dealing [with] more automation [for] reading fax and email orders [that come] in from hospitals. This is a process we are trying to automate to make sure we can do it in a more efficient way.”
This signals a major shift for the site that was outsourcing a significant chunk of its order processing to India five years ago. “Our strategy was to take the fax orders – which, at that time, were still 40 or 50% of all orders – and outsource this to a third party. We had a lot of people in India converting the faxes into sales order processing (SOP) orders much more cheaply than we could do over in Europe.”
However, the company has now brought this automation in-house, adopting optical character recognition technology to handle email and fax orders on-site in the Netherlands.
Willems says this high-tech efficiency drives results that benefit clients. “It means we don’t waste our time on things that are not important to the customer,” he points out. “We can spend more time on things that matter to [them], [as their] demands are changing. For us, it’s a way to convert the work that people have been doing – non-value [added] activities – to make better use of their time for more highly valued activities.”
However, the speed of change can drag, with hospitals and other healthcare institutions being slow to embrace improvements.
“The challenge is twofold: we are managing technological improvements and efficiencies in-house, while also trying to educate and encourage our customers to adopt more efficient processes,” explains Willems.
“We are looking, for example, to increase the electronic data interchange (EDI) percentage by working with [the] Global Healthcare Exchange (GHX) as a platform, [which] is helping but not dramatically. Over the past ten years, I’ve seen it increase by about 10%; hospitals are just not very fast in moving over to new technology.”
He adds, “In general, the medical device industry has customers that are very old-fashioned, in terms of their technology. We are trying to influence our customers to help them move with the technology, but that involves going to 4,000–5,000 hospitals in order to influence the market. That is the difficulty – you want to go fast, but you have this large customer base and it is very difficult for all of them to change. ” Willems says the networked technology that provides integrated solutions for customers could have more impact on efficiencies, but again, this pace of change is currently constrained by the customer base.
“Systems that make the buying and selling process more connected would have benefits for us, but that requires the customer to go with us and the technology,” he points out.
Even so, there are other efficiencies that manufacturers can use to streamline their internal processes and influence customer satisfaction. Here, integrated robotics and data analytics systems hold the key.
“I think robotics are coming up very quickly, not only robots for the physical distribution process, but also [the use of] data for capturing more from our customers,” Willems adds. “We can use this data to try and understand what kind of orders are going to come in tomorrow, based on the analytics we have for each customer. [By] using this data, we will be able to better predict the behaviour of our clients.”
The other major benefit of automation is increasingly important in an industry that is so heavily reliant on packaging, as well as air and road miles. Using improved automation technology means sustainability targets can be easily achieved. Willems states that automated packaging, for example, can drastically cut waste inside the factory and on the road.
“What we do now is make on-demand packaging for all our orders. For a customer who orders six or seven products in different sizes, we have developed an algorithm that can calculate the minimum size, in terms of the length, width and height of the box required,” he says. “We then create every single box on demand for customers. This gives us an enormous advantage [for] reducing the amount of packaging and the volume shipped to our customers. We reduce the amount of air in the boxes, which takes less space on the plane or in the truck and improves the environmental impact of our orders. As a result, we are meeting all [of] our environmental goals [with] this technology.”
The system is also creating massive time and cost-efficiencies for the business. Willems adds that continuing to raise the bar to meet customer expectations will rely more on automated technology solutions like this in the future.
“I think, as we grow faster, using more technology will make a major difference. In the future, customer service will no longer be what it used to be. It’s going to change completely to a new type of experience for our customers. But before we do that, we need to fine-tune our technology,” he says.
“At the moment, there are still way too many people doing transactional work. Customers don’t value this and there’s no reason why they would value it – it’s just something we need to get done. So, we can better use technology to avoid all that transactional work and convert the hours that those people spend on transactional work into hours that are more valued by the customer.
“Technology is going to play more of a role in that. In distribution, I think we [have] very well-developed automation and technology. Even so, we can still go further, but I think it’s the customer service area that’s moving forward and is going to be the biggest change over the next year or so. The limiting factor is for us is how we can help our customers go with us, to go as far as we want to go.”
Willems states that this progress could be linked to more digital strategies and industry pushes to market more progressive solutions to customers.
“It’s a matter of determining how we want to sell to customers in the future and what kind of interaction we want to have with them during the procurement process. We need to work out how we and our supply chain can deliver our products in a better way,” he concludes.