Dan Reeve

Using Automation to Ease the Way for Medical Device Companies

By Dan Reeve
Dan Reeve

The medical device industry has more than its share of challenges, from regulations and changing business environments to the need to drive down costs and compete on price, all the while accelerating their ability to accelerate the process from order entry to order fulfillment.

When it became law in 2010, the Affordable Care Act had far-reaching and significant impacts on every part of the healthcare field, from hospitals to insurers and every segment in between. It changed how care is regulated, provided and paid for.

The supply chain companies in the medical device industry didn’t escape the long reach of Obamacare, which put a 2.3 percent tax on medical devices. But even as those companies and the rest of the healthcare industry undertook the arduous work of transforming how they did business in order to comply with the ACA, the law has been under constant attack by Republicans in Congress who have vowed for some seven years to do away with it. This year Obamacare found itself several times only a single vote away from being repealed, a move that would have put the industry through another upheaval that once again would mean undoing years of work and undergoing more drastic changes by everyone in the field that were forced upon them from the outside.

The ACA’s tortured journey and uncertain legislative future are illustrative of one of myriad challenges that face the medical device industry. It’s a massive industry that covers everything from tongue depressors to complex healthcare appliances, and it is constantly having to adjust to new legislative and regulatory mandates, such as new EU medical device regulations passed earlier this year. Companies face ongoing pricing pressures, rapidly growing amounts of data and the challenges that come with digitization of the supply chain, and they work in a business environment that is increasingly partnership-driven and patient-centric, and those patients are more connected and digitally engaged with mobile devices and applications. On top of that, the healthcare world is becoming more focused on value-based outcomes.

Executives are feeling the heat. In a survey conducted earlier this year by analyst firm Frost and Sullivan, 41.7 percent of medical device company CEOs said the volatile global and regulatory environments will be the key challenge for them, 58.3 percent said a restrictive regulatory environment is the top external hurdle and half said personalization and customization will be most disruptive to their business models.

There also is pressure around profits and revenues. Of the CEOs surveyed, 45.8 percent pointed to revenue growth as the top growth objective. At the same time, 25 percent said their companies’ board members are unhappy with their organizations’ growth. So as the industry and businesses themselves continue to rapidly evolve and change, executives are also under the gun to find ways to reduce expenses and drive up revenue and profits.

A significant obstacle to these myriad goals is the still-manual nature of their companies’ document processes that can throw sand in the works throughout their supply chains, from order processing and fulfillment to pricing, purchasing and regulatory compliance. These manual processes can be draining on a company. They’re slow—in taking and processing the order, in getting products into the pipeline, in getting the products to the customers—and prone to error, and they drive up costs. Orders can be backlogged, dropped or missed, mistakes can find their ways into order entries, and product tracking and returns are made more difficult. Employees spend a lot of their time on paperwork, which means less time with customers. And if customers are unhappy with their service or the response they’re getting from their vendors, they’ll go elsewhere.

Manual processes also make complying with increasingly stringent regulations even more difficult, and they are out of step in a rapidly evolving business world that is more cloud-centric and highly mobile. Essentially, they are a drag on medical device companies, which are looking to accelerate processing times, reduce errors and complexity, enhance visibility and reduce costs to adapt to a highly regulated, competitive and price-conscious market.

As organizations transform themselves into digital businesses, many are turning to order processing automation technologies to improve efficiencies and drive down costs. Such automated order processing systems can improve every step of the supply chain, from the point where customers can submit orders in multiple formats and get notified when the order ships to the supply chain directors who can ensure on-time delivery. It can also identify and fix recurring issues to customer service representatives who can access order data in real time, allowing them to spend more time interacting with customers rather than searching for paper documents.


The right automated document processing software can address many of the challenges that the CEOs laid out in the Frost and Sullivan survey. That includes compliance. As we’ve noted earlier, the healthcare field is highly regulated, both in the United States and overseas, and there doesn’t seem to be any relief in the near future. The right automated healthcare management software needs to be compliant with such regulations as HIPAA (Health Insurance Portability and Accountability Act) and HITECH (Health Information Technology for Economic and Clinical Health Act). The software can be highly effective, but if it doesn’t pass the formal security assessment for HIPAA and HITECH, it won’t be worth much in the healthcare field.

The technology also addresses the issues of document management and retrieval, which are key elements of many of the regulations in the healthcare industry. Automated healthcare document management and storage software enables companies to archive data electronically, which makes it easier for them to not only manage medical records and document storage but also accelerates their capabilities for searching and retrieving them when needed. The software enables users to have a complete audit trail throughout the sales ordering process and ensure that the proper checks and validations occurred.

Healthcare facilities continue to adopt electronic health records (EHR) technologies, and having automated order processing for products to support the field will only serve to fuel that adoption. According to a report earlier this year by market research firm Kalorama Information, the EHR market has grown from almost $25 billion in 2014 to more than $29.5 billion this year, and will hit $36.6 billion by 2021.

Efficiencies and costs

Companies can become much more efficient and drive down costs by adopting order processing automation software. Many have seen their order processing costs drop by 40 to 60 percent, saving money that can be folded back into the business through investments in R&D rather than being spent propping up costly and inefficient manual processing procedures. With the software, all facets of sales order processing, from faxes and email to EDI orders, can be done electronically, making the process more efficient and less costly by removing the need to do these tasks manually. Taking the paper and human intervention out of the process means fewer errors and bottlenecks, as well as faster order processing and fulfillment.

Order accuracy

They also mean that orders will be filled 100 percent correctly, reducing the number of complaints and returns. There will be greater visibility into the order process and that data can be analyzed and the intelligence gleaned from it can be acted upon quickly. Technologies like analytics and key performance indicators (KPI) can make it easier to track documents and address problems more quickly. In addition, customer service reps can analyze trends in order processing while executives higher up the ladder can gain greater visibility into their companies’ order processing performance as well as create automated reports. Intelligent dashboards armed with KPIs put the important information at the user’s fingertips, alerts can be sent when orders are completed or something goes awry and the efficiency and workloads of team members can be monitored.

M&A and other business disrupters

Mergers and acquisitions, spinoffs and similar business changes occur in the medical device market as well as almost every other space, and can cause their own levels of headaches as companies work to integrate disparate business systems or look to break away from what had been in place before the transaction. Through automated business process software, companies more easily integrate ERP, medical accounting software and other back-end systems and desktop applications from multiple sources, and they can do so through the cloud or on-premises. In addition, any document processing procedure can be automated through a single and collaborative platform. And harkening back to the compliance discussion, the integration process can be tracked every step of the way.

Happy customers, happy employees

Automated order processing software streamlines the process for customers, who no longer have to deal with clumsy paper-based procedures and then hope that everything went right and that the product they order will arrive on time. Instead, orders can be made electronically and—just as important—accurately. They are notified when the order ships, can track the order through the entire process and see deliveries made more quickly. With a more accurate system in place, the customer can be confident that the right product will show up on the doorstep, which means fewer returns. And a happy customer means a returning customer.

On the other side are the customer service representatives, who find that they spend less time manually inputting data and instead can work more closely with the customers in a much more collaborative way. They can track conversations with customers, create closer relationships with them, upsell more products and services and offer more strategic services help. Their productivity increases along with their sense of satisfaction and fulfillment.

The medical device industry has more than its share of challenges, from regulations and changing business environments to the need to drive down costs and compete on price, all the while accelerating their ability to accelerate the process from order entry to order fulfillment. Automated order processing software can address the bulk of these issues and remove many of the barriers the companies face as they compete in a fast-paced, cloud-based world.

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Dan Reeve