How to Build a More Resilient Orthopedic Supply Chain

If there’s one thing the COVID-19 pandemic taught us, it’s that disruptions can wreak havoc on global supply chains. Prior to the pandemic, many organizations assumed that if they prioritized efficiency, they would be fine, with the three key factors of efficiency being quality, cost, and delivery (QCD).
 
However, the fourth key factor of QCD effectiveness is globalization. Companies being able to source from anywhere in the world is what enabled their supply chains to run so efficiently. Unfortunately, the pandemic disrupted the QCD supply chain strategy because global sourcing was no longer a viable option.
 
Without global sourcing, many organizations’ supply chains were severely crippled, and many even halted altogether. Today, we are still seeing the residual effects of this thanks to other issues that have crept up, such as a shifting regulatory environment, the volatility of commodity prices, and increased interdependencies.
 
As such, it is evident that companies must take a more methodical approach to rebuilding their supply chains. This is particularly true of organizations within the medical device industry, such as orthopedics companies.
 
Being able to continue delivering quality care to patients is crucial, which includes access to quality medical devices. But in the current post-pandemic landscape, this will continue to be an issue unless companies learn to build more resilient and agile supply chains.

Current Challenges the Orthopedics Supply Chain is Facing

The entirety of the supply chain right now is volatile due to frequent interruptions. Prior to the pandemic, complexities in global trade due to shifting regulations were already an issue, but the pandemic exacerbated this problem in addition to causing other issues. Now, frequent demand fluctuations are putting a lot of strain on the orthopedics supply chain.
 
One of the primary issues is the lack of diversity with orthopedic suppliers. Most organizations rely on a select few global suppliers, but as global sourcing is much harder to control, this is causing major setbacks.
 
Inflation has also drastically impacted nearly every level of the supply chain, from sourcing raw materials to the cost of labor. There are also increased customer demands and labor shortages that are causing problems for orthopedic supply chains.

How to Address These Challenges

The simple answer to all of the challenges is to become more responsive and elastic. The key to solving the medical device supply chain issues and bouncing back from the pandemic is to build a more resilient supply chain. 
 
Previously, supply chains relied on just-in-time strategies where efficiency was achieved by cutting costs, but today, just-in-time doesn’t cut it. Supply chain leaders need to develop more methodical strategies that include automation, innovative technologies, and risk management to drive efficiency and agility.

Diversifying and Localizing Supplier Networks

As most organizations were relying on global suppliers, mainly China, for medical device manufacturing, it’s evident that their challenges lay in a lack of supplier diversity. When the pandemic shut everything down and with global regulations shifting, it made global sourcing a major problem.
 
As such, it is apparent that supply chain leaders need to start looking more toward localization to avoid major disruptions going forward. Many U.S. facilities were still able to remain open during the pandemic, which means it was only the organizations that relied solely on global suppliers that faced major setbacks.
 
This is not to say that having a global supplier network is out of the question, but simply that supply chains could be more resilient in the face of potential future disruptions if they have a more diverse portfolio of suppliers that includes global and local sourcing.

Better Risk Management

Risk management has always been a crucial component of successful supply chain operations. However, after the pandemic and with the other ongoing issues previously discussed, a stronger risk management strategy is now more important than ever.
 
There are a number of things that can go wrong at every stage of the supply chain, but improved risk management can help identify and prevent major setbacks. This can include:
 

• Identifying key suppliers in advance;
• Identifying the raw materials you are dependent on;
• Identifying the locations of suppliers;
• And making advance arrangements with contingency suppliers.

 
Additionally, with more organizations and supply chains going digital, it’s also important to focus on internal automation risks to avoid setbacks stemming from your own internal processes. Digital automation can help with efficiency, but it can also come with its own risks, such as threats to security. And a cybersecurity attack can cause just as much damage as supplier disruptions.

Automation and Digital Transformation

Despite the threat of security breaches, it is still imperative that supply chain leaders implement automation and smart technologies to enhance efficiencies and simplify processes. If there are supply chain disruptions, having a more automated system in place can help organizations better handle setbacks.
 
Furthermore, by leveraging smart technologies, such as AI-powered systems, organizations can even predict future issues so they can act accordingly and adapt before the issue escalates. AI systems, for example, can monitor inventory and materials and alert managers ahead of time when there is an expected shortage, enabling managers to act accordingly and take care of the situation before it becomes a problem.

Increased Safety Measures

Another key component of building a more resilient business amid economic uncertainty is prioritizing safety. Labor shortages, for example, are a current problem in the supply chain, and a major part of this issue stems from the fact that workers don’t feel safe or protected.
 
Manufacturing employees are considered high-risk workers, and they play a key role in keeping the supply chain running. So, if they are quitting and leaving the industry due to a lack of safety measures, then it’s up to organizations to implement better safety programs to ensure workers feel safe enough to return to work.
 
OSHA complaints are costly and can dissuade clients from working with you. And, of course, without your workers, you can’t run your business. So, in addition to diversifying suppliers, adopting automation, and developing a stronger risk management program, organizations must also prioritize employee safety.

In Summary

While diversifying supplier networks is a key component in bolstering orthopedic supply chains, the answer really boils down to having a better plan. Cutting costs is no longer a sufficient strategy for building an efficient supply chain. Instead, it’s about having a plan in place that enables your organization to be more resilient should setbacks and disruptions continue to occur.
 

---

Amanda Winstead is a writer from the Portland area with a background in communications and a passion for telling stories. Along with writing she enjoys traveling, reading, working out, and going to concerts. If you want to follow her writing journey, or even just say hi you can find her on Twitter.