The Operating Theatre Journal March 2022

Delivering just what the doctor ordered with ERP/MRP
Medical equipment supply can be literally a matter of life and death.
The high levels of control and visibility required are only achievable if
grounded on a competent Enterprise/Manufacturing Resource Planning
(ERP/MRP) system, writes Sara Duff, UK Business Development Manager
at MRPeasy.com.
The pandemic has thrust the manufacture and supply of medical
equipment into the spotlight. As health authorities scrambled to secure
PPE and ventilators, or to kit out ‘Nightingale’ hospitals, we gained
some understanding of the complexities involved.
Definitions vary, but medical technology can cover anything from
syringes and scalpels produced in their millions, at relatively low cost,
through to X-ray machines and diagnostic scanners worth hundreds of
thousands. A high degree of variety is characteristic. Even surgical
instruments that have, in their basic form, been around for generations
exist in profusion to suit specific procedures and the preferences of
different medical schools and individual clinicians. Only recently the
Royal College of Surgeons called for the development of smaller,
lightweight instruments to prevent strain and fatigue in surgeons during
a particular procedure. Rates of innovation are high – the sector made
13,795 filings with the European Patent Office in 2018, almost 8% of the
total.
The UK market for medtech is the sixth largest globally, worth £12 billion
a year, and with a healthy export business (Euro 5.9 bn) especially to the
EU and US. While the market is driven by around 53 large companies (of
over £50 million turnover), 84% of an estimated 3,942 companies in the
sector are either SMEs or small specialist divisions of larger companies.
For these in particular, the market presents acute challenges, both
technical and commercial, which ERP/MRP can help them meet.
Technically, medtech is often working at the bleeding edge of the
science: design and production may barely have escaped the lab.
That can make component supply uncertain, and may also mean that
manufacturing procedures and processes are subject to frequent
revision, which systems must be able to accommodate. More generally,
medtech demands the very highest manufacturing and quality
standards: tolerances, surface finishes, material composition and purity
as well as functionality. Quite often quality must be assured by 100%
inspection rather than statistical sampling, and of course QA and test
results must attach to the individual item ID and follow it through to
the clinician’s hand or, in the case of items such as prosthetics and
implants, much longer.
The design and manufacture of many medtech devices and equipment
is highly regulated – the UKCA mark is replacing CE certification post-
Brexit, but the rules are essentially the same – so there is a large
community of specialist test, assurance and certification houses which
have their own stringent requirements for process control and visibility.
There may be similar requirements to assure adherence to clean room
and other hygiene protocols, not just in manufacturing but throughout
the supply process. Not to be neglected, similar requirements may
extend to packaging, which particularly for single-use devices may form
an integral part of the product. And given the exotic nature and high
value of some of the materials used in medtech, even scrap and waste
flows may require rigorous planning and control.
Connetika, for example, is a manufacturer of miniature fluidic
components and systems for the health sector and elsewhere. Established
in only December 2019 and immediately faced with pandemic-induced
demand, the company selected MRPeasy, particularly for its capabilities
in lot tracking, which was direly needed, and production scheduling, as
well as for its competitive pricing.
A further consideration in medtech manufacturing is that production
often requires high levels of scarce skills and specialist processes
and equipment: whether in-house or through sub-contractors, these
resources have to be planned and scheduled efficiently.
Commercially, too, SMEs in this sector face challenges. Given the high
value of many devices, neither vendors nor health providers can afford
to maintain large stocks. Meanwhile demand forecasting, especially for
more specialist items, given the diversity of product variants can be
very difficult, a situation made worse as the pandemic has disrupted
the ‘normal’ throughflow of patients for many conditions. Yet stockouts,
even of short duration, are unacceptable with people’s health at
stake. Manufacturers therefore have to offer a fast and agile response to
demand. That requires the ability to reschedule swiftly and accurately
across a range of products, which may have complex multi-level Bills of
Material and where as we have seen, actual manufacturing is only one
part of the process that has to be planned and controlled.
One typical MRPeasy user in the medtech sector reports the benefits
of time savings resulting from using the cloud-based system’s Product
Configurator feature, together with the Gantt charts that allow the
Production Manager to move the schedule around and see what’s going
on for a couple of days in advance. “It’s amazing how much time the
software saves me,” the latter says. “Whenever I do any production
processing, everything flows really nicely.” He also highlights the value
of the CRM module, which shows a pipeline view of status of orders that
the salesforce can use. “This way, they do not have to call me whenever
they want to know when orders are ready to go out.”
As medical science and technology develops, the cost of medtech rises
inexorably, but the buyers, be they a tax-funded health service, or the
insurers in other models, constantly push back on price, so both to
satisfy their customers and for their own bottom line, manufacturers
need to display ultra-efficient waste-free processes. Given the high
value of much medtech, production and delivery delays not only
threaten patients: they can be seriously damaging to the cash flow of
smaller companies, while with health budgets under pressure, securing
timely payment can also be an issue. It is essential that there should
be robust and accurate linkage of production and shipping to, on the
one hand, procurement and on the other, to accounting and invoicing
processes.
Despite these challenges, the UK medical equipment sector continues
to boast many highly innovative, indeed world-leading, companies of
all sizes. But the environment in which they operate is not getting
any easier. Basing their processes and systems around an ERP/MRP
implementation that is fully proven in service; offers the necessary
range of functionalities either in itself or in support of more specialist
routines; and is easy to install, learn and use with a minimum of external
support will allow companies to continue to thrive. Many medtech
manufacturers have already discovered that MRPeasy’s affordable, payfor-use,
cloud-based approach is indeed just what the doctor ordered.
For further information, visit: MRPeasy.com
28 THE OPERATING THEATRE JOURNAL www.otjonline.com