Medical Equipment Manufacturers Benefit from Logistics Outsourcing

Medical Equipment Manufacturers Benefit from Logistics Outsourcing (January 15, 2004)
By Len Batcha, President - Technical Transportation
(As seen in the November 2003 issue of The Medical Dealer)

Southlake, TX - Manufacturers continue to look at outsourcing as an important strategy in obtaining a competitive advantage. By outsourcing key logistics processes, medical equipment manufacturers can focus their efforts to their strengths by concentrating on their production staff. Outsourcing also allows manufactures to increase their flexibility and efficiency, and access the latest logistics technologies and processes.

The key to successful outsourcing is to work with a third party logistics (3PL) provider that has the expertise and flexibility to be a strategic partner in the final objective of “Satisfying The End Customer.”

For medical original equipment manufacturers (OEM), selecting the appropriate 3PL partner is a critical task. While there are numerous transportation and logistics companies from which to choose, not all will be able to address the unique logistics requirements of specialized medical equipment.

For example, because medical devices are typically bulky, heavy, and fragile, with factory tolerances and calibrations set prior to transportation, they require delicate handling. The 3PL should provide air-ride shipping and appropriate protective crating/packaging to ensure safe transport. Once the instrument arrives at a site, a multi-person crew with proper material handling equipment, such as stair crawlers, lift gates or pallet jacks, will typically be needed to place the instrument at the customer’s desired location They will also need to unpack, perform initial fire up and run instrument ready diagnostic, and remove packaging debris to complete the delivery.

A 3PL that specializes in handling precision machines will provide the appropriate level of care with personnel trained to transport and deliver medical equipment to ensure the instrument “Arrives Alive” void of damage or losses.

Transportation is just the beginning. There are a variety of other services a 3PL should be able to provide medical OEMs such as strategic stocking locations for critical parts, finished goods, and demonstration equipment. Utilizing a team of specially trained field engineers, the 3PL can also provide complete product installation, assembly and instrument configuration, per manufacturer instructions.

Reverse logistics programs to remove obsolete or malfunctioning equipment from hospitals, labs, or clinics often have unique requirements, particularly when the machines have had contact with bodily fluids and must be decontaminated before shipping. A 3PL with experience and knowledge in the FDA compliance requirements of a medical OEM can complete this procedure as part of a comprehensive reverse logistics program.

The 3PL can also manage the disposal of recovered equipment as required, which includes providing notification of destruction, thus avoiding unnecessary return transportation costs. By outsourcing activities, such as deliveries, installation and reverse logistics, a manufacturer can eliminate or reduce travel and staffing expenses required to support these activities. This also allows the manufacturer’s employees to focus on maintaining and expanding the company’s customer base, and other core business objectives.

Outsourcing logistics to a 3PL also provides a manufacturer with more flexibility to adapt to changing market conditions. Relying on the 3PL allows a manufacturer to rapidly shift its allocation of resources as its business grows in new markets or shrinks in existing ones.

For example, the manufacturer does not need to increase or decrease its own staff to meet changing conditions. The OEM also avoids the cost of establishing and leasing new office and warehouse facilities, or the expense of terminating leases and selling property. Instead, using the staffing and physical resources of the 3PL means that changes are not only accommodated quickly, but economically as well.

Logistics processes handled through a 3PL also provide medical OEMs with access to the latest and best logistics technologies. Even a manufacturer that uses cutting edge technology in its equipment may not be fully aware of the applicable technology available for logistics. A company that specializes in logistics, on the other hand, offers a complete array of technology resources and usually provides the customer with instant access to these via the Internet. The information and services an OEM should expect include: shipment tracking; proof of delivery; online waybill; inventory management and control; order fulfillment, release, and confirmation with email notification; device activity history by serial number; both private and multi-level access within various stages of its organization; and activity reports available on demand.

Successful 3PLs strive to stay ahead of the technology curve by investing in the technologies that further expand their capabilities and allow them to offer the most up-to-date logistics support for their customers. Not only does an OEM gain access to this technology through a 3PL, but the manufacturer also benefits from not having to incur all the costs of developing or purchasing software to implement and manage the logistics processes.

Outsourcing logistics permits an OEM to concentrate on the essential components of its business, such as research and development, engineering, Total Quality Management (TQM) and manufacturing. Through outsourcing, a manufacturer has access to a well-managed logistics program that allows the company to better allocate staff, increase flexibility and efficiency, and utilize the latest logistics technologies and best practices.

In the end, a 3PL can streamline the logistics process for a manufacturer and get its products to the market and to end-users quickly and economically.

Len Batcha is president, Technical Transportation Inc., a provider of transportation, logistics and tracking for the highly specialized medical, electronics, and telecommunications industries. Contact Len at 800-852-8726 ext. 132 or len@techtrans.com.
More information about Technical Transportation is available at www.techtrans.com.

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Southlake, TX - Manufacturers continue to look at outsourcing as an important strategy in obtaining a competitive advantage. By outsourcing key logistics processes, medical equipment manufacturers can focus their efforts to their strengths by concentrating on their production staff. Outsourcing also allows manufactures to increase their flexibility and efficiency, and access the latest logistics technologies and processes.

The key to successful outsourcing is to work with a third party logistics (3PL) provider that has the expertise and flexibility to be a strategic partner in the final objective of “Satisfying The End Customer.”

For medical original equipment manufacturers (OEM), selecting the appropriate 3PL partner is a critical task. While there are numerous transportation and logistics companies from which to choose, not all will be able to address the unique logistics requirements of specialized medical equipment.

For example, because medical devices are typically bulky, heavy, and fragile, with factory tolerances and calibrations set prior to transportation, they require delicate handling. The 3PL should provide air-ride shipping and appropriate protective crating/packaging to ensure safe transport. Once the instrument arrives at a site, a multi-person crew with proper material handling equipment, such as stair crawlers, lift gates or pallet jacks, will typically be needed to place the instrument at the customer’s desired location They will also need to unpack, perform initial fire up and run instrument ready diagnostic, and remove packaging debris to complete the delivery.

A 3PL that specializes in handling precision machines will provide the appropriate level of care with personnel trained to transport and deliver medical equipment to ensure the instrument “Arrives Alive” void of damage or losses.

Transportation is just the beginning. There are a variety of other services a 3PL should be able to provide medical OEMs such as strategic stocking locations for critical parts, finished goods, and demonstration equipment. Utilizing a team of specially trained field engineers, the 3PL can also provide complete product installation, assembly and instrument configuration, per manufacturer instructions.

Reverse logistics programs to remove obsolete or malfunctioning equipment from hospitals, labs, or clinics often have unique requirements, particularly when the machines have had contact with bodily fluids and must be decontaminated before shipping. A 3PL with experience and knowledge in the FDA compliance requirements of a medical OEM can complete this procedure as part of a comprehensive reverse logistics program.

The 3PL can also manage the disposal of recovered equipment as required, which includes providing notification of destruction, thus avoiding unnecessary return transportation costs. By outsourcing activities, such as deliveries, installation and reverse logistics, a manufacturer can eliminate or reduce travel and staffing expenses required to support these activities. This also allows the manufacturer’s employees to focus on maintaining and expanding the company’s customer base, and other core business objectives.

Outsourcing logistics to a 3PL also provides a manufacturer with more flexibility to adapt to changing market conditions. Relying on the 3PL allows a manufacturer to rapidly shift its allocation of resources as its business grows in new markets or shrinks in existing ones.

For example, the manufacturer does not need to increase or decrease its own staff to meet changing conditions. The OEM also avoids the cost of establishing and leasing new office and warehouse facilities, or the expense of terminating leases and selling property. Instead, using the staffing and physical resources of the 3PL means that changes are not only accommodated quickly, but economically as well.

Logistics processes handled through a 3PL also provide medical OEMs with access to the latest and best logistics technologies. Even a manufacturer that uses cutting edge technology in its equipment may not be fully aware of the applicable technology available for logistics. A company that specializes in logistics, on the other hand, offers a complete array of technology resources and usually provides the customer with instant access to these via the Internet. The information and services an OEM should expect include: shipment tracking; proof of delivery; online waybill; inventory management and control; order fulfillment, release, and confirmation with email notification; device activity history by serial number; both private and multi-level access within various stages of its organization; and activity reports available on demand.

Successful 3PLs strive to stay ahead of the technology curve by investing in the technologies that further expand their capabilities and allow them to offer the most up-to-date logistics support for their customers. Not only does an OEM gain access to this technology through a 3PL, but the manufacturer also benefits from not having to incur all the costs of developing or purchasing software to implement and manage the logistics processes.

Outsourcing logistics permits an OEM to concentrate on the essential components of its business, such as research and development, engineering, Total Quality Management (TQM) and manufacturing. Through outsourcing, a manufacturer has access to a well-managed logistics program that allows the company to better allocate staff, increase flexibility and efficiency, and utilize the latest logistics technologies and best practices.

In the end, a 3PL can streamline the logistics process for a manufacturer and get its products to the market and to end-users quickly and economically.