The medical device supply chain is often far from simple, comprising numerous stakeholders bound together by what are some of the most stringent and complex regulations. Whether products are being manufactured and transported across regional territories – even just state borders – or around the world, often the entire process bumps against rules and requirements at every turn.

In recent years these challenges have intensified, and it seems no industry has been untouched by that. First the impact of the pandemic, which saw restrictions on movement, reductions in productivity and even elements of protectionism among them; then several challenging, and still so, geopolitical events including, but not limited to, the war in Ukraine have conspired against what was an already stretched global supply chain network. Not to mention economic factors like widespread and damaging levels of inflation, and skilled labour shortages.

Each of the above presents its own set of complications, but for the medical device sector these difficulties risk delaying the development and adoption of what can often be vital medical interventions, ultimately risking patient’s health and well-being. “Delayed and cancelled elective surgeries, long lead times, significantly higher costs – this has been the unfortunate state of affairs,” said global consultancy firm FTI Consulting at the beginning of last year, as the world faced another uncertain 12 months. It added that Covid-19 had spared no industry, but that medtech was especially impacted, at a time when global healthcare needs had only increased.

More specifically, the consultancy said: “Extensive and unprecedented supply chain disruptions have materialised and sustained over the last 30 months, including raw material shortages, labour challenges, sterilisation constraints, and concerns surrounding device security and cybersecurity.”

Agility is the watchword

Among the solutions the sector has been forced to adopt to counter these challenges are nearshoring or onshoring some of its manufacturing capacity. It has also developed and adopted an array of contingency plans to counter labour constraints and ever-increasing raw materials costs, and refined its distribution channels as part of a fundamental shift to supply chains that some believe will become the norm. Agility has been the watchword, and if you’re not able to be agile, you’re not operating at an optimum level or even on a level playing field.

Speaking at the University of Pittsburgh’s Supply Chain Management Symposium in March 2023, Johnson & Johnson’s Heidi Landry, chief procurement officer of enterprise supply chain, revealed the steps her organisation had taken to counter the impact of these challenges. She said they were working to better assess the risk faced and take the steps needed to maintain a “continuous supply base” and “enable global access to lifesaving medicines and equipment”.

For many organisations facing similar concerns, digitalisation and automation have led the way in this new age of supply complexity. “Digitalisation of the supply chain is happening, even though it’s not always visible,” explains smart and reusable packaging specialist Schoeller Allibert’s global product and IoT [internet of things] director Frederik Dejans. However, it has been said medtech lags behind other parts of industry that have embraced digitalisation through what’s known as ‘digital supply networks’ (DSN).

DSNs offer a host of benefits if employed correctly, including in logistics and distribution, warehouse and storage operations, inventory management and even in aftersales through device maintenance. Done via a network of sensors and the IoT technology, all supported by cloud-based systems, medtech companies have the ability to oversee their portfolio at every stage of its journey. The sensors can report on the performance and condition – including the environment – of a device; whether it’s in transit, being stored at a distribution facility or in a healthcare setting, or even in use. This is particularly important given the growing raft of environmental, social and governance regulations that require companies to trace all goods flowing through their supply chains. “IoT-based technologies deliver transparency and brand protection to businesses and consumers,” Dejans says.

But, he suggests, some are not utilising these technologies as best they could. “A lot of companies currently lack end-to-end supply chain visibility,” he warns, referring to all those involved in the supply chain having the capability to access insights and data on the movement of products – from source to the intended final destination – in real time.

Referred to by some as the secret weapon that keeps supply chains humming, end-to-end visibility is revolutionising the way businesses oversee every stage of their supply chain, and the journey their products take along it. Employing it has been found to boost efficiencies, allowing for timely and accurate order fulfilment by swiftly and proactively mitigating potential issues – all supported by digital technology advances.

In a 2022 market report by McKinsey & Company, two-thirds (67%) of survey participants said they used digital dashboards to garner end-to-end oversight; but that means there is a significant cohort yet to harness this power – some of those will inevitably be associated with the medtech sector to some degree.

There are three crucial elements to a good endto- end strategy: modes of transport, supply chain nodes, and all the stages in between – sometimes referred to as transitional phases. Of course, you can break a supply chain down further, but these are the broad components. Other parts of an end-to-end structure include finance, inventory and procurement, operations, quality control, and sales and aftersales.

“Where are the assets [packages]?” Dejans rhetorically questions, presuming the contemplations of his customers and anyone else whose business’s success rests on supply chains of some description. “Are they empty or full? Are there any temperature threshold anomalies? What is the cycle time? How many trips did they make? How much CO2 was saved during return transport? Do I have enough assets? Eventually, the question needs to be answered: am I getting the return on investment I expected?” For Dejans, and Schoeller Allibert, digitalising supply chains helps answer these and many more queries.

While supply chains are often complex, medtech logistical lines can be even more convoluted due to the sensitivity of the devices involved. Image Credit: Artistry Visions/

It’s important to note that for a supply chain to benefit from end-to-end visibility the majority, if not all, of that chain must be digitalised. To do this, stakeholders face challenges – large and small. Perhaps the biggest, for all of them, is first determining the technology needed and then integrating it. “There are three strategic pillars that come to mind: hardware, communications and software,” Dejans says. “The processes around it, especially ERP [enterprise resource planning] integration for seamless order processing allows customers and suppliers to automate and make logistics decisions more reliable.”

With that in mind, it is perhaps fair to say ERPs, and their ability to help organisations oversee all of their processes and better manage them, are crucial at a time when efficiency and oversight has never been so important – although not the only critical element. But for medtech, renowned for its important yet burdensome regulation, utilising anything that can speed up processes it is now more than just desirable – it’s essential. Without automation and digitalisation, those multifaceted processes become considerably more laborious. But Dejans believes the systems companies and their partners adopt are a crucial enabler, and as such should be considered carefully.

These include choosing the right device to send information on the whereabouts of goods, their condition and history. To do this, he says companies need to ask which solution is acceptable and accurate enough for their business. When considering communications, he adds it’s important to decide which medium is best; for example, lowpower wide-area networks, satellite or Bluetooth low-energy devices? Finally, to select the most appropriate software you need to understand the customer-facing platform, which is crucial as this helps users comprehend what the current status is. These, he advises, should be considered during vendor negotiations and proof-of-concept protocols. An example might be when choosing a track-andtrace supplier, where he suggests to “try to make sure the vendor offers a solution to all three strategic pillars”.

Abundant benefits

With DSN now becoming recognised for the benefits it can bring to medtech, it seems change is upon the sector – about time some might say. In an industry well known for its complexity, the benefits digitalisation offers are abundant, including the actionable insights Dejans has been keen to stress. Thanks to the network of sensors throughout the chain, users will know where their products are, how they got there and the conditions they were in – which is particularly helpful when a cold chain is involved and products need to be transported and stored correctly. Proactively, they can alert anyone in the chain to possible issues before they become overly problematic and potentially costly.

Thanks to this level of oversight, businesses large and small, with supply chains complex or simple, can make improvements in the way they operate. The benefits of harnessing digitalisation will, as they have been in other sectors, be almost limitless.

“Making supply chains visible based on actual data enables something far more interesting: where can we improve?” concludes Dejans. “Focusing on areas where there is room for improvement will help your business make money.” It’s a view shared by PwC, which, when reporting last year on how the sector could manage global headwinds with supply chain fixes, said: “With supply chain visibility solutions in place, your company can analyse network costs and success metrics across the supply base, manufacturing plants, and warehousing and logistics.”

With today’s increasingly complicated global supply chain, the notion that the sector can continue as it has is fast becoming outdated. There is a plethora of materials out there encouraging medtech to digitalise, with advice on how to do it. The truth is every journey will be different, but one worth taking if you want to keep pace with a quickly changing world. Today’s environment demands agility – digital technologies allow for it.