The Economy

Medical Technologies Companies Need to Manage Risk of Globalization

July 9, 2012

The top two drivers of globalization is the need to support emerging markets with locally produced product and improve the rate of innovation.

Adrienne Selko

Globalization has increased demand for medical technology around the world. According to a new survey by Axendia, a majority expect their business to grow globally in the next three years. Executives expect grrowth will be higher, 88% , in emerging markets compared to 69% in developing markets.
The top two drivers of globalization is the need to support emerging markets with locally produced product (64%) and improve the rate of innovation (63%).

With the globalization of design, sourcing and manufacturing of medical technology, companies need to balance the risks and rewards of globalization. As the business model shifts from selling products to providing integrated solutions, companies must navigate three primary macro trends:

Managing sustainable global growth
Complying with tightening global regulatory environments
Supporting changing healthcare delivery models globally

"While Med-Tech companies are poised to capitalize on these opportunities, global expansion has industry executives on alert. Nearly 7 out of 10 executives reported moderate to high risk based on their level of visibility into critical suppliers," commented Daniel R. Matlis, president of Axendia.

The following are some of the issues that are "keeping executives up at night":

The quality of products, raw materials or services provided (60%)
The ability to maintain consistent quality standards across internal and external sites (59%)
Protecting the company’s intellectual property (49%)

Supply Chain Issues

Looking at the supply chain, seven out of 10 executives rated their level of risk as moderate to high based on their current level of visibility into critical suppliers. Sixty-eight percent perceive moderate to high risk based on their current visibility into critical suppliers with the majority desiring access to real time data and on-demand data from critical suppliers, contract manufacturers and other Tier 1 suppliers.

Furthermore 59% worry about maintaining consistent quality standards across internal & external sites.

Based on the results, authors of the study suggest that brand owners need to "implement consistent strategies which capitalize on the opportunities set forth by globalization and outsourcing while proactively reducing and controlling risks. This calls for changing the business, technology, and regulatory models traditionally used in the industry."

To view the report, "Walking the Global Tightrope: Balancing the Risks and Rewards of Med-Tech Globalization" click here.

About the Author

Adrienne Selko | Senior Editor

Focus: Workforce, Talent

Follow Me on Twitter: @ASelkoIW

Bio: Adrienne Selko has written about many topics over the 17 years she has been with the publication and currently focuses on workforce development strategies. Previously Adrienne was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck? which made the Cleveland Plain Dealer's best sellers list. She is also a senior editor at Material Handling & Logistics and EHS Today.

Editorial mission statement: Manufacturing is the enviable position of creating products, processes and policies that solve the world’s problems. When the industry stepped up to manufacture what was necessary to combat the pandemic, it revealed its true nature. My goal is to showcase the sector’s ability to address a broad range of workforce issues including technology, training, diversity & inclusion, with a goal of enticing future generations to join this amazing sector.

Why I find manufacturing interesting: On my first day working for a company that made medical equipment such as MRIs, I toured the plant floor. On every wall was a photo of a person, mostly children. I asked my supervisor why this was the case and he said that the work we do at this company has saved these people’s lives. “We never forget how important our work is and everyone’s contribution to that.” From that moment on I was hooked on manufacturing.

I have talked with many people in this field who have transformed their own career development to assist others. For example, companies are hiring those with disabilities, those previously incarcerated and other talent pools that have been underutilized. I have talked with leaders who have brought out the best in their workforce, as well as employees doing their best work while doing good for the world.