Overview of the Durable Medical Equipment Industry
Generally, durable medical equipment can be classified into monitoring and therapeutic devices, personal mobility devices, medical furniture, and bathroom safety devices. The personal mobility devices segment can be further segmented into crutches and canes, wheelchairs, and walkers. Similarly, the medical furniture can be further segmented into medical beds, stretchers, mattress, and lift chairs.
The prevalence of cancer, gynecological, ophthalmic, neurological conditions, and cardiac disorders is increasing every year. The treatment of these disorders requires surgical procedures, which increases the demand for surgical equipment; thus, resulting in the requirement of long-term care until recovery. In the case of long-term post-surgery care, durable medical equipment plays an essential role in the faster recovery of the patient. Rapidly growing demand for home healthcare industry services can also be attributed to the growing demand of this market.
However, our recent analysis of the medical devices industry shows that the durable medical equipment manufacturers are facing challenges in terms of:
- Cost of product development: The major challenge for durable medical equipment device manufacturers is to overcome the burgeoning cost of product development. Moreover, besides technology and government regulations, companies in the medical devices industry have to evaluate new products based on its price as against factors like patient experience.
- Localization of durable medical equipment devices: In the emerging markets, local durable medical equipment manufacturers are more successful when compared to their multinational counterparts. This is possible because the local players offer tailor-made products that are aimed at resolving the local needs and constraints. Moreover, the local durable medical equipment manufacturers often indulge in market research and leverage the benefits of local operations and a domestic sales force to bridge the gaps in the market.
Challenges such as this pose a major threat to companies operating in the medical devices industry. Supply market intelligence solutions help companies gain profound insights into the latest healthcare trends, developments, key risks, and recommendations on devising procurement best practices across the industry. These solutions also help companies reduce their procurement spends and offer superior product and service offerings.
The Business Challenge and Journey
The client, a leading player in the medical devices industry, specializing in manufacturing durable medical equipment was facing difficulties in managing their sourcing and procurement processes, which resulted in higher expenses. As a result, they wanted to gain a comprehensive understanding of the competitors, their products, suppliers, services, and spending patterns prevalent in the medical devices industry to cut down on their direct and indirect spends. Additionally, they also wanted to gain actionable insights on the strategies to develop a superior contract negotiation strategy.
SpendEdge’s supply market intelligence experts followed a comprehensive research methodology. The research approach included primary and secondary research coupled with qualitative and quantitative data collection procedures to help the client overcome their predicaments.
During the course of this supply market intelligence engagement, the durable medical equipment manufacturing client developed a long list of suppliers in terms of their business profile, revenue, and financial structure with the help of a robust SWOT analysis. This helped them gain an understanding of the supplier’s pricing and cost structure, which, in turn, helped them in devising a robust price model to evaluate competitors’ strategies. The engagement also helped the client cut down direct and indirect costs across their business units by establishing lean and centralized sourcing and procurement process.
Fundamental questions answered in this supply market intelligence engagement
With the help of SpendEdge’s supply market intelligence solution, the durable medical equipment manufacturing client identified the potential supply risks and enhanced their overall procurement and sourcing capability. This helped them achieve annual savings of $17 million.