Top 6 Challenges of High-Tech and Medical Device Manufacturers and How to Solve Them

High-tech equipment manufacturers and medical device OEMs face disparate challenges that keep changing with the times and trends. With concepts like Industry 4.0, cloud-based IT, and digital transformation, companies manufacturing high-tech and medical devices must not just consider embracing the latest technology but invest in end-to-end, robust, and comprehensive software systems that sets them up for success.

With a global presence and deep expertise of over 17 years in the manufacturing and rental industries, we at STAEDEAN have seen the evolution of the industry, the changing market trends, and the increasing customer demands. We help enterprises streamline their business with industry-specific software embedded in Dynamics 365 Finance and Supply Chain Management.

This article will share how the landscape of high-tech equipment and medical devices looks today, the top challenges the industry faces, and how our software addresses these challenges.

How does the high-tech equipment and medical device manufacturing landscape look today?

Medical device OEM landscape

The medical device manufacturing industry or medical device original equipment manufacturers (OEMs) is involved in one of the most critical industries, affected by the health and lives of the people. The medical device manufacturing industry offers to sell or rent a wide range of equipment, devices, or components, from portable X-ray machines, ECGs, and oxygen concentrators to hypodermic needles, syringes, and defibrillators.

Over the recent years and with the COVID-19 pandemic, the sector has evolved greatly, with some medical OEMs seeing a rise in demand and others seeing their market share shrink. To stay ahead of the competition, medical device manufacturers are seeking to embrace the concept of Industry 4.0 and introduce new technological solutions to address the unique market challenges.

Limited profit margins, decreased visibility across assets, inability to optimize utilization, and operational performance – medical device companies face some daunting challenges that are costly to overcome if not done correctly. In fact, a study by KPMG states that medical device manufacturers can lose 21 percent of profits by not embracing digital transformation.

High-tech equipment manufacturing industry landscape

High-tech equipment manufacturers are involved in the manufacturing, selling, renting, or retail of semiconductors, PCs, network equipment, and related assets.

The sudden rise in digital transformation and remote work setup post-pandemic has contributed to faster growth in this industry. However, manufacturing businesses that are not looking at innovative technology and adding recurring revenue streams in their business with concepts like Equipment-as-a-Service could risk becoming obsolete.

With the current trends becoming more advanced and complex, high-tech companies cannot rely on legacy technologies to support their business. With time, it could become more challenging for companies dealing with high-tech equipment to manage their data and face challenges around process automation, environmental and regulatory issues, lowering costs, supply chain visibility, traceability, and increased collaboration.

Wondering what ERP essentials high-tech equipment and medical device companies must look for? View this Checklist.

The high-tech equipment and medical device manufacturing industry face many similar and overlapping challenges. Let’s take a closer look at some of those challenges and how to solve them with our rental software – STAEDEAN Rental Management, embedded in Dynamics 365 F&SCM.

What are the recent challenges faced by high-tech and medical device manufacturers, and how can STAEDEAN Rental Management for Dynamics 365 solve them?

Challenge 1: Lack of supply chain visibility and product traceability

Supply chain management is essential to manufacturing companies as sometimes technical issues related to compliance could go undetected, resulting in financial loss and reputation damage.

Any issue related to damage, defects, or recalls can become overwhelmingly challenging without a way to track your inventory end-to-end.

Solution: You can serially track your devices with serialization in STAEDEAN Rental Management and track your entire equipment from procurement, manufacturing, renting, selling, to a successful customer order with a complete invoice.

Additionally, you can look to integrate your PLM system with ERP through a PLM-ERP integration, which connects the engineering and manufacturing sides of your business and manages the entire lifecycle of your products.

Challenge 2: Client management with remote work

The post-pandemic era has increased remote work operations, and this means that high-tech and medical OEMs must look to sell, rent, and bring their products to their end customers virtually. However, not being able to manage all your clients could lead to dissatisfied customers.

Solution: Use an integrated CRM solution, such as STAEDEAN Rental Management for D365 Sales, that seamlessly connects with STAEDEAN Rental Management. You can manage your lead-to-cash processes in a single solution, generate quick and accurate quotes, and cross-sell or upsell based on customer buying patterns.

You can easily implement the ‘remote work’ setup by giving access to important information to your field staff with a mobile app such as the STAEDEAN Rental Mobile Operations.

Additionally, you can empower your end customers by providing them with information about all your offerings upfront with a customer portal solution like the STAEDEAN Rental Customer Portal. This solution allows your customers to book, track, and manage equipment on their own.

Challenge 3: IP theft and counterfeit products

One challenge among the high-tech and medical device manufacturers is the theft of intellectual property (IP) or counterfeiting of products. Data breaches and identity theft have become more common in the high-tech industry, with many products being built with subpar materials and falsely marketed as the ‘original product’.

Furthermore, medical product counterfeits such as substandard and falsified counterfeits can make a medical device OEM legally vulnerable and harm their business.

Solution: Ensure the quality of each product in your manufacturing unit with bar code identification, serialization, or batch tracking. Our scanning solution, STAEDEAN Rental Logistics Scanning, can scan each item individually and give information about the serial number of each order. You can support on-site rental depots with the possibility for self-checkout and handle both serialized and non-serialized inventory easily.

Additionally, you can plan any maintenance issues that might arise in your production line with efficient equipment maintenance information that STAEDEAN Rental Management offers with detailed insights into the history, forecast, and time for maintenance.

Challenge 4: Ensuring regulatory compliance

Medical device OEMs have stringent regulations that vary from country to country. Before selling any medical device, approvals from the FDA, GMP, and ISO are needed.

High-tech manufacturers must also meet environmental regulations, export compliance, jurisdiction exclusions or inclusion lists, and reporting requirements set by regulatory bodies such as GDPR, EU, HIPAA, and so on.

Solution: With STAEDEAN Rental Management, medical devices and high-tech manufacturers can store documentation and set up quality checks for each equipment or product. It offers advanced project management capabilities with subcontracting and integrated planning, so you can easily document and manage a multitude of business processes, helping you adhere to different regulations.

You can go a step further and implement a master data management solution to implement data governance and streamline the quality, accuracy, and consistency of your data.

Challenge 5: Unplanned downtime and optimizing utilization

High-tech and medical device OEMs face challenges with optimizing machine utilization and reducing unplanned downtime. With margin pressures and high product costs prevalent in high-tech equipment and medical device production, unplanned downtime causes further financial depletion with little to keep the business sustainable.

Solution: Maximize asset utilization by having a clear picture of the entire supply chain with STAEDEAN Rental Management and track availability in real-time to view all your upcoming reservations in a single dashboard, from booking to return, allowing for efficient allocation of products.

You can further analyze your best-performing products and equipment with our analytics add-on solution, STAEDEAN Analytics for Rental, to get insights into utilization rates, booking trends, and more specific KPIs through detailed reporting and IoT sensors.

Challenge 6: Complex pricing and distribution

Manufacturers must look to fulfill the changing customer demands and manage multiple revenue channels, such as subscription-based pricing, standard leasing, pay-per-use, and so on. The pricing must be maintained based on a mix of tiered pricing, special pricing agreements, rebates, and discounts that are either negotiated with the distributor or the end customer.

You could have multiple distributors for a single product, and varying prices based on the location. Having a global customer base would also mean dealing with multi-currency and multi-location policies, which must be managed accurately.

Solution: Complex projects and contracts can be easily managed in STAEDEAN Analytics for Rental, and you can handle payments made over a long duration with consolidated invoicing, ensuring timely payments. The solution supports multi-currency, multi-country, complex production and distribution operations, multiple cost calculations, and recognizes multiple revenue streams making the entire pricing and invoicing process seamless.

You can also connect your operations and rental-specific business data from your local ERPs to the parent ERP if you have distributed ERP systems and get an accurate view of all your financials in a unified view.

Ready to take the next step in digitally transforming your high-tech and medical device manufacturing?

If you’re interested in embracing the latest technology with Microsoft Dynamics 365 ERP and are looking for an end-to-end software solution, STAEDEAN Analytics for Rental might be a choice for you to consider.

You could explore more about the STAEDEAN Analytics for Rental solution by checking out this factsheet which shares information on:

• The solution features and benefits
• The different industries the solution supports
• The features of each optional add-on solution
• How STAEDEAN Analytics for Rental can help your business