All for One

All for One

Supply chain efficiency involves every aspect of the product development process, industry experts tell this year’s ODT Forum attendees.

Michael Barbella

Managing Editor

David Ruff retired from the U.S. Navy nearly 10 years ago, but the former captain still has a penchant for military jargon. Every now and then, he’ll rattle off a phrase that seems better suited for sailors than for ordinary civilians.

There’s one particular phrase that Ruff likes to use when he talks about the supply chain—a slogan he picked up as a student of the Navy Supply Corps School in Newport, R.I. The school’s motto is, “Right Sailor…Right Time…Right Place,” but Ruff has modified that maxim for the medical device industry.

“What needs to happen in the medical device industry and with customers to put the right material in the right place at the right time with the right quantity, all at the right cost to give the [device] company, the hospital, the doctor, the sales rep and the patient a positive outcome?” he asked.

Ruff directed his question at orthopedic industry representatives who gathered in stormy Memphis, Tenn., on April 27 for the third annual ODT Forum. Topics discussed at the event ranged from supply chain trends to new implant and instrument technology and innovations in orthopedic care. Attendees also learned ways they can access and capitalize on global emerging markets, which will offer a 15 percent higher growth rate through 2015 than the expansion expected in the United States during that time.

Ruff’s 45-minute presentation focused on the supply chain changes that must occur for device companies to operate more efficiently. Perhaps the most important change involves philosophy: Companies, Ruff noted, are too quick to blame implant malfunctions or quality issues on breakdowns in the supply chain. Firms often fail to realize that everyone involved in the manufacturing process is part of the supply chain, from the design engineers and prototyping departments to the packaging and shipping divisions. Implant manufacturers must end the “not my job” line of thinking about the supply chain to improve both operational efficiencies and patient outcomes.

“If something in the development process goes south, we all tend to work it back to the supply chain. But we are all part of the supply chain whether we want to believe that or not,” Ruff told forum attendees. “We’re all in the business of supplying products to the end user, whether it be a patient, a doctor or a hospital, in the most efficient way we can so we can remain competitive and grow our business. Everybody wants things these days a little bit quicker and a little bit cheaper than they’ve ever had it before. But in order to do that, everybody in the product development process has to work together. We all have to be ‘ready state’ efficient at all times.”

In addition to being “ready state” efficient (a military term, courtesy of Ruff), device companies also should be aware of the worldwide markets and technology that are likely to drive future growth. Farhad Foroughi, Ph.D., principal analyst at Millennium Research Group, a Decision Resources Inc. company that provides medical technology market intelligence and strategic information to the healthcare sector, revealed where these geographical growth markets will be in the next four years. The device sectors in Brazil, China and India are expected to expand at least three times faster than U.S. growth through 2015, according to data from the company. Bone graft substitutes (autograft or allograft tissue) are expected to outpace all other product segments in these countries, followed by trauma items and spinal products.

Bone graft substitutes currently are used in 90 percent of the more than 2 million procedures performed worldwide each year. Autograft tissue is harvested from a patient’s iliac crest but also could come from the distal femur or proximal tibia, while bone allografts are taken from living donors or cadavers. The market for these products in Brazil is expected to climb 18 percent in Brazil, 24.4 percent in China and a staggering 32.2 percent in India through 2015, according to Millennium’s figures.

Trauma products and joint reconstruction components are expected to be significant market movers in India, with the trauma space growing 26.7 percent and the joint reconstruction sector climbing 23.6 percent. Spinal hardware, such as fixation plates and pedicle screws, will present more of an opportunity for companies that set up shop in China—the market for spine products in China is expected to grow three times faster than India’s and 6 percent faster than Brazil’s through 2015, according to Foroughi. Millennium analysts predict that China’s spinal products market will grow 21.7 percent (compared with 7.7 percent in India and 16.7 percent in China) and its trauma market will rise 22.3 percent (compared with 10.2 percent in Brazil). Both Brazil and China are expected to have nearly the same market growth in joint reconstruction products—14.9 percent and 17.8 percent, respectively.

Foroughi attributed the growth in these three markets to various factors, including increases in the number of middle-class households and insured people; an expanded medical infrastructure; higher disposable incomes, a willingness among politicians to invest in the healthcare system; and a rising prevalence of chronic diseases such as diabetes and obesity.
In China, for example, diabetes is thought to be just as ugly a culprit as it is in the United States, with more than 92 million cases, according to the World Health Organization. In Brazil, obesity rates tripled in men and nearly doubled in women between 1975 and 2003, while in India, the number of overweight women rose from 10.6 percent to 12.6 percent between 1998-1999 and 2005-2006.

Such an upsurge in debilitating diseases bodes well for some of the newer surgical techniques that have been developed to repair worn-out joints and arthritic bones. William H. Mihalko, M.D., Ph.D., chief scientific officer at InMotion Orthopaedic Research Center, an independent non-profit research facility based in Memphis, touted the benefits of computer-assisted surgery, saying the technology can help doctors personalize surgery and improve patient outcomes. He mentioned two innovations are helping overseas surgeons improve their techniques—the Acrobot Navigation System from the Acrobot Company Limited in London, England; and the Spineassist from Israel-based Mazor Robotics Ltd. Both products use pre-operative CT-based scans to better fit implants to patients’ anatomies; the Spineassist product also features a robotic arm that guides doctors during procedures to optimize outcomes.

“Why improve the status quo? Well, orthopedics generally has been measured with a micrometer and cut with an axe,” said Mihalko, who also is an orthopedic surgeon at the Campbell Clinic, a facility with four offices in the Memphis area. “It seems odd that mechanics have been using computers to fix our cars for over a decade but computers are not really in widespread use in the operating room. Computer navigation and computer-assisted surgery is in its infancy. These systems are giving us information we’ve never had before, and we’re in the midst of determining what all this information means. Is this a silver bullet for medicine? No. Do I think computer-assisted surgery is here to stay? Absolutely.”

If Mihalko is right, computer-assisted surgery will be in good company: Experts believe minimally-invasive surgical techniques also will be around for quite a while. Millennium Research Group expects competition in the $740 million spinal fusion segment to intensify over the next few years as more companies attempt to gain market share from NuVasive Inc. and Medtronic Spine and Biologics, currently the dominant players in the space.

“Minimally invasive technology has spread all over the world,” noted Kevin Foley, M.D., professor of neurosurgery at the University of Tennessee Health Science Center in Memphis and director of complex spine surgery at Semmes-Murphey Neurologic & Spine Institute. “It can be an effective technique for the right patient under the right conditions. In the past, spinal fusions required large incisions and long recovery periods and even then it would result in chronic pain afterwards for patients. But now, we can put in large implants through tiny incisions and minimize patients’ hospital stays. These minimally invasive techniques over the last decade have improved and have shown to be at least as effective as open techniques. Whether they are better is still under debate.”

The forum ended with a panel discussion on the establishment of a standard OEM/supplier protocol. The panel’s participants debated the merits of helping the industry draft a vision or set of requirements that will enable OEMs and suppliers to work more effectively when developing products. “When it comes to validations, every company, whether it is an OEM, a supplier, a contract manufacturer or the FDA (U.S. Food and Drug Administration), has its own vision they like to leverage,” explained Timothy O’Kane, senior concurrent development engineer for Wright Medical Technology Inc., an implant manufacturer based in Arlington, Tenn. “With all these different visions comes different interpretations in how to fulfill those visions and therin lies the problem. Everyone is trying to satisfy different requirements and they’re doing it in many different ways, often on a trial and error basis. It’s fragmented. We need to come up with a standard set of requirements for validation. That is the goal.”