Ecommerce for a Mid-Sized Medical Device Company: A Consultant's Report Approach

Abstract

The medical device industry generates hundreds of billions of dollars in revenue every year. While the supply chain of some healthcare institutions runs with optimum efficiency through supply chain management (SCM) systems such an Infor Lawson, others are not always managed in such a fashion. These less efficient supply chains tend to be those of smaller facilities and standalone doctor offices that do not participate in the larger Group Purchasing Organizations (GPOs) that offer the supply chain efficiency, discounts, and economies of scale enjoyed by larger institutions (Jayaraman et al., 2014).

Many companies, except for the largest players in the field such as Bard, Cook, and Boston Scientific to name a few, are still operating their medical device sales to these smaller practices with phone calls, fax machines, and email. This practice of manual salesmanship can be time consuming, expensive, and labor intensive. But it doesn’t have to be. For this project, I will focus on an actual mid-sized company in the medical device industry (referred to in this report as “Med Dev Company”) that pulls in roughly $400 million in annual revenue. The company is positioned to increase revenue over the coming years, but could use a process that streamlines orders for some of its products, especially those for its smaller customers.

Med Dev Company sells a variety of medical devices, from simple disposable syringes and suture retention devices, to implantable catheters, to large surgical machines that require a high level of proficiency to operate. While not all of these products are able to be sold online through an ecommerce portal, many that are considered to be disposable, near the end of their product life-cycle, or tried and true “commodity” items, could certainly be sold via an ecommerce portal with ease. In a healthcare environment where device purchasing costs are often the difference between a clinic staying open or closing its doors for good, efficient and cost-effective management of device procurement is vital (Jayaraman, et al. 2014).

My goal for this project is to identify how the current sales process works at the Med Dev Company and the medical device industry in general, identify some key players in the medical device industry who operate in an ecommerce marketplace efficiently, assess the benefit and risks of ecommerce, and propose whether or not Med Dev Company should develop its own ecommerce environment for the appropriate products and customers. I will not be creating an actual ecommerce site for this project, however. The final output will instead take the shape of a consultant’s report to Med Dev Company, as well as an accompanying slide deck.