The healthcare industry has changed significantly over the past few years, with much of this affecting the medical supply niche. This has meant that companies have been forced to adapt considerably recently, with this showing no signs of slowing down.
There have been several trends that have affected this, with a few of these looking to continue making an impact. This means that medical supply firms will have to look toward the past few months to help plan for the future.
Medical Supply Trends
While some of these may affect the industry in the short-term, the majority will have long-term consequences. Technology has driven much of this, although this has been divided into a few categories. Furthermore, there have been non-tech related trends that been making an increasing impact.
The United States has been engaged in something of a trade war with a variety of countries for the past several months. This has meant that several tariffs have been placed on products and materials being placed on imports and exports.
While little of this has been focused on the medical supply industry, the majority of sectors have been affected. This has driven up the costs associated with production and development, which may lead to some companies looking to change strategies.
These tariffs show no sign of going away anytime soon. As a result, companies that have an international presence will be increasingly affected. While talks to reduce or remove these tariffs are ongoing, management shouldn’t bank on this being quick.
As a result, many firms may see their margins being whittled away.
Increased Use Of Artificial Intelligence
Artificial intelligence and machine learning have enhanced a variety of areas across the industry. Much of this has been seen in data collection both within and outside a company. For example, a firm will see much more detailed and actionable insights into the market, which adds a variety of benefits.
Alongside this is the fact that AI will be able to fill the gap between information and its implementation. This results in more informed and reliable strategies that could reap dividends for the majority of firms. Much of this is driven by increasingly connected devices and products.
The supply chain is one of the largest costs associated with the medical industry, with transportation playing a large role in this. However, this is something that many companies outside of the medical world look to tackle, as there are an increased amount of logistics firms being established.
This increased competition has led to many companies aiming to differentiate themselves from one another. Combined with mode advanced technology, this has meant that logistics can be much more in-demand and cost-effective.
Traditionally, big data was solely the realm of large multi-nationals, although it has become increasingly accessible to the majority of companies. There are a few advantages to this for medical suppliers, with an enhanced supply chain management being one of the more prominent areas.
Much of this is because big data can provide more informed analytics, which can then be broken into several areas. This allows businesses to adjust their supply chain and better adapt to customer needs. As a result, there can be several cost benefits to the practice.
Alongside this is better patient outcomes, as it can lead to more efficient supplier-to-patient processes. This reduces the amount of time it takes to manufacture and deliver products, which can provide a host of advantages in itself.
Orchestration is the system of consolidating a process or workflow through a variety of means. One of the primary ways that this has been done has been through increased automation, which has been one of the larger trends in the medical supply field.
This has become significantly easier for many companies, especially when compared to traditional processes. Much of this has been driven by more rapid advancements in technology, which has made orchestration easier and faster to implement. This is also a much more cost-effective process for medical suppliers.
The increasing use of technology in the medical supply industry has meant that more skilled workers have been needed. While medical training is increasingly effective across the country, this hasn’t translated into computer and other tech-related skills.
This has meant that many companies have had an employee shortage in a few key areas. As a result, employees who are skilled in these niches have been able to demand much higher wages, subsequently driving up workforce costs. This has also been seen with analytical skills related to big data.
While outsourcing may be a way around this, it may not often be possible for some firms. Alongside this is a difficulty in attracting skilled employees to the field. As a result, many companies will need to make themselves increasingly more appealing to potential workers.
Much of this may be driven by salary, there may be a variety of other workplace benefits that may attract them. Outside of outsourcing, firms may be able to offer training to current employees to allow them to upskill.
Rise Of Blockchain
Blockchain technology has become increasingly attractive to many supply companies, not just those in the medical niche. This is because it can offer much more transparency across a firm’s supply chain management.
There are a few factors that a business can see these benefits, such as with the sourcing and tracking of materials and pharmaceuticals. While this is already an option for many firms, blockchain technology provides a significant amount of security and reliability.
This is driven by the fact that it cannot be tampered with, which allows companies to place much more trust in their supply chain. While this hasn’t made much of an impact in the niche yet, it’s one of the trends that looks to become much more common in the coming years.
Regulations have continued to evolve over the past few years, which is a trend that may continue in the future. While some of this is driven by changing market demands, much of it has been driven by technological advancements in the overall health industry.
The majority of these laws have been focused on privacy and the use of big data. As a result, medical supply companies, and the healthcare field in general must become increasingly more accurate and reliable with how they manage this information.
While technology has been a key driver in this legislation, it may also provide several solutions to these regulations. For example, enhanced cybersecurity and cloud-based software can have a large role in protecting customers, hospitals, and suppliers.
Though this requires more of an investment in technology, it mitigates the possibility of fines in the long-term.
Internet Of Medical Things
The Internet of Things (IoT) has been making a large impact across almost every industry. The medical supply world is no exception to this, with the Internet of Medical Things (IoMT) becoming an increasingly common phrase.
There have been a few reasons behind this, with the potential health and safety aspects associated with it being prominent. This is primarily because more connected devices can help to improve accuracy and reliability with production.
This should subsequently have an impact on overall costs, which is driven by a few factors. Much of this is seen through the reduction of production mistakes, as well as a lower need for labor. This decrease in cost can then be passed on to consumers, which may increase overall volume and lead to better margins for suppliers.
While international tariffs are increasing the costs associated in certain areas, innovations in technology may overcome this. While these may not be seen straight away, the majority of medical supply companies will see this over time. This is especially true for purchases that require a large up-front investment.
There are a few areas, with labor and operations related costs being some of the more prominent. Alongside this is a reduction in repairs, as many advancements have meant that predictive maintenance has become increasingly common.
Much of this is seen through IoT-connected devices, as each will be able to monitor their performance, which encourages a data-driven approach to repairs. This could prevent the needed for much larger repairs in the future.
Coupled with this is increased automation, which not only reduces labor costs but can improve reliability and accuracy in production. This should result in fewer mistakes being made, which can have a domino effect on price.
Alongside each of the trends affecting the medical supply industry, there are a variety of statistics that many firms will want to be aware of. While many of these will be related to the various trends, many may not be. Regardless of this, every medical company should keep them in mind.
- The medical industry is set to grow 4% per year through 2022.
- Labor is the largest cost associated with the industry, using 33% of most budgets.
- 85% of medical experts say reducing costs is a priority.
- The majority of suppliers, 88%, say analytics is a primary focus for them.
- Three-quarters of hospitals still use manual filing systems.
- Industry revenue grew 16% in the five years leading to 2018, a trend which continues.
- Therapeutic devices continue to hold a large share of the industry, a reported 90% in 2016.
- Medical supply wholesaling grew at 1.7% annual between 2012 and 2017.
- The U.S. market makes up 45% of the market per year.
- Almost 98% of the industry employs less than 100 people.
Being properly informed about the industry can often be the key to success. By noting and planning for each of the above trends, the majority of medical supply companies should be able to capitalize on them.
Thanks for reading "Trends That Will Transform The Medical Supplies Industry Outlook in 2020", by the Linchpin Team in Chicago, Raleigh, and Wake Forest.