Medical Device Manufacturing Opportunities Born from COVID-19 Disruption
COVID-19 has been brutal to the global manufacturing and supply chain ecosystems, medical device manufacturing included. But the manufacturing companies that survive COVID-19 will be the ones that recognized the innovation opportunities in the mix — not just the problems.
That's one of the many insights found in Fictiv’s newly released 2020 State of Manufacturing Report.
Dubbed the Amazon Web Services of hardware manufacturing by TechCrunch, Fictiv is a cloud-based network of hundreds of manufacturers, primarily in the United States and China. Conducted with Dimensional Research, the fifth annual manufacturing industry report released this week polled hundreds of senior manufacturing and supply chain decision makers at companies producing medical device, robotics, automotive, aerospace, and consumer electronics products.
Show me the money (for digital transformation in manufacturing)
According to Fictiv's report, 87% of survey respondents said their firm has a high priority digital transformation initiative. The top goals of these efforts include cost reduction, increased supply chain visibility, and driving efficiencies. Yet, only 14% consider their digital transformation initiative to be well funded, and 81% said they face difficulty finding the necessary expertise for these efforts.
“COVID-19 is a clear point of demarcation in the industry, accelerating the transition from traditional supply chains and manufacturing to a digitally-enabled future,” said Fictiv CEO Dave Evans. “This deep dive reveals an opportunity for those industries most profoundly impacted by the physical realities of the virus to iterate faster with finer tolerances and higher quality using digital manufacturing advances. We believe OEMs can rely on digital manufacturing partners to bridge this digital transformation gap and overcome the overwhelmingly complex and costly mandate of necessary digital advancement.”
Time is money in manufacturing
Time is money in manufacturing, the supply chain is the clock, according to Fictiv.
For nearly half of the companies polled, COVID-19 has jacked up the cost of materials and components, lengthened production times, and dampened sales. Many of these companies have had to lay off employees during the pandemic and 24% said they have been unable to fill customer orders due to supply chain disruptions. The silver lining here is that 45% of these manufacturing leaders have recognized opportunities to rethink and enhance the resilience of their supply chains so that they'll be more prepared for future disasters.
Only 17% rated their supply chain resilience and adaptability as "exceptional" in the survey. So 96% are now actively working to increase their supply chain agility. Furthermore, 91% are planning to adopt dual and triple sourcing strategies, and 73% plan to minimize their supply chain's reliance on China. That said, 74% still expect to source some parts from the region in the future.
“While many businesses will examine reshoring as part of their future supply chain, China continues to offer important advantages in infrastructure and manufacturing talent – making it a stable part of any supply chain ecosystem,” said Fictiv COO Jean Olivieri. “The opportunity for supply chain executives will be to introduce digital and AI capabilities through partners and investment that can build an agile, resilient supply chain able to flex across geographies and demand in real-time and with complete transparency.”
Other silver linings
- 88% of Fictiv's survey respondents said that the manufacturing companies that survive COVID-19 will be the ones that recognized the innovation opportunities in the mix — not just the problems
- 45% said their leadership team has been inspired to innovate in order to meet the changing environment
- 44% of manufacturers have reduced operational costs through remote work
- 43% have already released new products to meet changing market demands
- 40% have been motivated to accelerate existing strategic initiatives
- 40% have introduced new business models to create additional revenue streams
- 28% noted the increased availability of talent as an opportunity created by COVID-19