How Important Is Scalability For Your MedTech Manufacturing Operation?
To view this article on the Today’s Medical Development Magazine website, click here.
As M&A Advisors the subject of scalability is one we’re asked about regularly. The question is often by early-stage companies. This shouldn’t be the case. Scalability should be on top of the list of strategic topics regardless of a company’s size or stage. Our experience has shown us that scalability is key for a company’s growth and survival.
The ability to scale efficiently and effectively can impact a company’s competitiveness by meeting increased demand, being cost-effective including looking at constant reduction of production costs as the market continues to squeeze prices, and meeting ever-changing market demands.
Scalability is not a single task. Many factors all must come together for a manufacturer to scale on demand.
1. Demand forecasting: The foundation of scalability. Understanding market needs is essential. By talking with customers, end users, suppliers, healthcare providers, and your reps while keeping an eye on the market will give a good understanding on what lies ahead.
2. Resource planning: With your forecast in hand, start looking at what resources will be needed. It involves suppliers, workforce, systems, warehousing, financials to name a few.
Suppliers: Diversification is key in being able to scale. Know your suppliers, lead times, and prices so you don’t have to negotiate when you’re in need. Having suppliers in different regions or part of the world will further reduce risk.
Workforce: A well-trained workforce is essential. It’s worth taking the time to make sure the members of your team are given the knowledge they need to adapt to changes in the scale of production but also in the technologies that’ll be needed to achieve higher throughput.
Systems: A new vendor, SKU number, or any change can be held up by a system that isn’t easily adaptable. Can a bill of materials (BOM) be easily modified or will it hinder your ability to scale? There are many vendors who can help you address this issue. Your system should be supporting you, not slow you down.
Warehousing: Do you have a plan if you need to store more supplies or hold some inventory? Have a plan that you can easily execute. You may not need it but knowing where you could get more space even if temporarily is good to know.
Financial: With all the planning you do, knowing what it’ll take financially to support a quick shift will allow you to deploy quickly. Know what it’ll take and how long it’ll take for you to see the benefits of your plan.
3. Manufacturing process: Standardized manufacturing processes that are well-documented and reciprocated are key to scalability. Your trained workforce will make you successful. Add automation to this (we know there might be an initial investment required), and you’ll be able to scale at any time.
4. Quality management & regulatory compliance: Quality in medtech can never be compromised. Quality should not be affected by scalability. Maintain measurable and consistent quality standards that apply regardless of scale. As important is making sure your manufacturing processes and products comply with the regulatory requirements. Will changes of scale in production require additional regulatory approvals? Know ahead of time so you don’t run into any issues.
There’s a lot more to cover in scaling a manufacturing medtech operation. Be ready to scale and you can weather the changes that are ahead.
Cheers to your success!
About the authors: CCEO Florence Joffroy-Black is a long-time MedTech M&A and marketing expert. She can be reached at florencejblack@medworldadvisors.com. Managing Director Dave Sheppard is a former medical OEM Fortune 500 executive and an experienced MedTech M&A professional. He can be reached at davesheppard@medworldadvisors.com. “Value = Strategic Fit + Timing® is a registered trademark of MedWorld Advisors.
To view this article on the Today’s Medical Development Magazine website, click here.
