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The potential that data collection offers orthopedic device companies has transformed dramatically over the years. The advancement of supply chain tools, specifically, has played an important role as OEMs have struggled with pandemic inventory forecasting as well as material and manufacturing volatility. To help gain an understanding of how data acquisition works, and what it has to offer OEMs and their knowledge of their inventory, we spoke to software company leaders about their products and, namely, how digital insight can improve supply chain processes.
Experts we spoke to include:
- Jeff Grabow, Vice President of Customer Success, ImplantBase
- Chris Riedel, CEO and Co-Founder, ConnectSx
- Howard Weathersby, Vice President, Global Business Development, WebOps
- David Ryan, Team Lead and CEO, SMADE
They all concurred that gone are the days of manually tracking supplies on spreadsheets. New value and new understanding of products in the warehouse and out in the field can now be accessed with the touch of a button.
How Data Helps Understand Inventory
From a financial perspective, the performance of inventory in the field is critical, Grabow said. His knowledge of supply chains and operations spans two decades, with career highlights including roles with companies like Zimmer Biomet and Globus Medical. During that time, he’s realized that the visibility of that inventory — where it resides and how well it is being utilized — has traditionally been a black hole. Digital data has transformed that outlook.
ImplantBase and cloud-based software companies like it seek to “light up that last mile,” as Grabow described it, and lend visibility to the people who are managing inventory in the field. Before that digital transformation, there was tremendous latency related to obtaining information. However, the adoption and advancement of technology have made the transmission of information a natural part of an OEM’s workflow.
Companies like ConnectSx are trying to help OEMs solve a continuum of challenges, Riedel said. The global, high-level scope of that is helping orthopedic manufacturers get eyes on all assets. Helping OEMs understand where their inventory is, how it’s turning, who’s holding it, and how it’s being used helps them make better business decisions both from a supply chain logistics and a manufacturing perspective. Cloud-based data helps eliminate the ambiguity of where a product is and how much there is of it.
In short, Weathersby said, it’s about “working capital efficiency.” Standard practices in the orthopedic device industry result in large finished goods inventories on a balance sheet that typically turn less than twice a year. On the surface, WebOps software is streamlining day-to-day activities for users. The larger benefit is in the power of the data captured via those workflow activities to optimize field inventory — what you need more of, what you can have less of, where and to whom to move aging products to get them used before they expire.
While SMADE is collecting and processing data to support operations, logistics, sales, etc., the company has taken a different approach than that of a traditional software company. SMADE leverages software-empowered hardware through its proprietary platform, S-HUB. In simple terms, it’s surgical trays and instruments with tracking technology that is resistant to extreme environments such as the high temperatures of multiple autoclave cycles.
“With SMADE, OEMs can identify precisely and instantly where their assets are, whether any unexpected events occurred during transportation or in the aftermath, which asset needs to be recalled,” Ryan said. “It means no more underused or lost assets, precise asset tracking, maintenance programs and recalls limited to what’s needed. Hence an improved inventory management process.”
How Data is Acquired
Much of the technology available to the orthopedic industry tracks not only what companies have on hand, but how it is being used and when it needs to be replenished.
In a lot of cases, manufacturers only really know if supply is dwindling when expensive, labor intensive audits are performed. These technologies can send out things like low stock notifications and backorder notifications. They can understand something like product expiration dates in a matter of moments without the need for a bunch of emails, spreadsheets or phone calls.
ConnectSx, Riedel said, collects new data about inventory, cases, procedures and the like in a couple of different domains. Analytical information about historical cases is accounted for as well as sales rep data, too. Because the company looks at itself as a healthcare data company, they help customers understand more than just how its system works. As inventory moves through the supply chain, they help them understand all of the multi-dimensional data around a particular medical device.
“We’re seeing that people really want to get as much data as they can, because they know that empowered with information, they’re going to be able to make smarter, more effective decisions that are going to wind up being better,” Riedel said. “Not only is it better for the business, but better for the patient in the longer run.”
Location-based information travels in a surgical episode itself, Grabow said, by traveling between distribution centers to reps in hospitals. The natural workflow of reps and distributors doing their jobs can be captured in real-time as soon as they submit a sales order after a surgery, which goes right back to the orthopedic device company. The latency of writing things down and faxing them in 30 or so days is gone. It’s happening pretty much instantaneously, he said.
The workflow and decision tree logic in WebOps’ software captures data on every item, kit and set at every node in the supply chain, Weathersby said. They track where it came from, where it went, how long that move took, how long it sat, who touched it and so on. They collect hundreds of data points on each of the millions of items that are out in the field for the life of each item. Then the data is warehoused for historical analysis.
“You need the data points from each node in your supply chain,” Weathersby said. “With those, you can focus on any number of priorities from service-to-surgeons to expiration reduction while still reducing your total working capital commitment to inventory.”
Utilizing Data Beyond Inventory
Orthopedic companies are realizing that the copious amount of data being collected on their inventory can be utilized for more than just inventory and supply chain processes.
Ryan said SMADE has heard marketing departments complain about the lack of real-world data to support their recommendations to R&D. Most companies’ product roadmap prioritization is the result of direct client feedback, overheard during conversations, or at trade shows. SMADE’s technology takes a lifecycle approach and aims to provide companies with insight into whether products are performing as expected and which assets are more favored by users. Marketing teams can then know the usage levels of all trays and instruments, and are able to build analytics to support their recommendations to R&D.
When asked how WebOps assists in commercialization efforts, Weathersby said that the company has been working on integration into hospital systems. Elective surgeries are usually booked many weeks or months in advance. When WebOps is able to get that information to customers, they have a much larger planning horizon that applies not just to inventory allocations and movements, but also to demand planning. It’s possible to have less inventory, meet surgeon requirements and adjust the production schedule so that what is being built is definitely going to be needed rather than guessing based on last year’s sales.
The rapid growth and adoption of analytics is probably the most transformative thing to come along in a while, Weathersby stated. Companies are leveraging technology more than they did even two or three years ago. For example, WebOps is seeing many more requests for microservices using Application Programming Interfaces (APIs) for data exchange with other tools. Orthopedic companies are much more aware that you can make any system “talk” to just about any other system.
Implementation Hurdles
Somewhat paradoxically, Ryan said, SMADE’s disruptive solutions are both its greatest strength and its most serious challenge. The new company’s smart tracking solutions are the result of an intense and invaluable R&D phase focused on technology and data accuracy. SMADE is demonstrating that unleashing the power of field data is a key differentiator while pursuing its quest in persuading its target clients that its solutions are unequaled in terms of technology and data accuracy, he said.
Historically speaking, Riedel said, the biggest obstacle of getting this technology adopted is the general aversion to risk inside the healthcare field. People are now beginning to understand, however, that certain technologies are maturing and that the risks are perhaps lower than perceived. Other challenges include worry that the risk to implement will be greater than the value, and that it’s incredibly hard to implement new systems. And while that’s not always untrue, Riedel said, he thinks the maturity of the cloud with the ability to deliver systems like ConnectSx’s as a service really lowers the barrier to entry for implementation.
Some companies also haven’t internalized the value that they’re going to get out of implementing a system like this, he said. These systems create new value and new opportunities for business that companies maybe didn’t even know were there. Part of the promise of digital transformation, generally, is that it does more than just improve current processes. It helps do things in a way that opens up space for brand new opportunities, brand new value and brand new insights that can be acted on.
Conclusion
People should never underestimate the power and the necessity of access to information and access to information that is holistic and distributed across an entire set of stakeholders. Data that gets created in a silo is only marginally useful, and sometimes can be a detriment to the business.
“All of this data, even data on the supply chain and logistics side, is going to provide significant opportunity to improve the quality of care that gets delivered to patients,” Riedel said.
Orthopedic device manufacturers can use data to make the most proactive moves by ensuring that they have ready access to instantly updated information and insight. Don’t let your data be stale, and don’t put your data in a spreadsheet and think it will solve everything.
