Forecast 2023, Part Two: PLM Trends Will Remain Focused on Digital Transformation

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Over the past two decades, product lifecycle management (PLM) has become increasingly important to ensure not only the effectiveness of a company’s supply chain management but also the ultimate success of products in the marketplace. In the year ahead, intelligent, cloud-based PLM digital solutions—incorporating the use of technologies like artificial intelligence, machine learning, and the Internet of Things (IOT)—are also expected to play a crucial role in fostering product optimization and innovation, especially in the face of continued economic challenges.

PLM Digital Solutions

Used by manufacturers to manage the development of complex products, such as medical devices, PLM traditionally may refer to both the strategic process of managing a product’s journey from conception through the end-of-life (EOL) stage and the software used to manage the data and processes for each lifecycle stage across the supply chain. Today, PLM strategy and software are inextricably entwined, and there is greater urgency than ever for companies to adopt effective software solutions to gain dependable, 24/7 access to the complete range of data associated with a product—at all lifecycle stages.

According to data gathered by PTC, “the majority (63%) of manufacturing organizations believe that, without upgrading or reinvestment, their enterprise software systems will remain competitive for roughly two to three years. This means that any organization that upgraded in 2020 before, or at the start of, the pandemic, will likely be seeking to reinvest in its software solutions, [including] around product lifecycle management.”

As companies increasingly upgrade to cloud-based software-as-a-service (SaaS) platforms, they can ensure that a product’s sustainability and cybersecurity needs are addressed and incorporated into every product lifecycle stage, from ideation to EOL.

For example, PLM software tools can help ensure that products are “sustainable by design,” according to PTC, “using no more material than is physically necessary,” and the use of artificial intelligence can ensure that only the essential materials are being used to create the strongest design. Such technology tools can also help ensure that components are designed to facilitate their disassembly, reuse, and recovery at EOL.

In today’s environment, design- and engineering-focused product teams also require strategic insights for managing risks in their supply chain, particularly with an eye toward components or parts scheduled for EOL, according to manufacturing services company Jabil, which noted that “predictive analysis helps to identify the technology changes that are on the horizon so that necessary modular redesigns get traction early enough to help the OEM maintain leadership and competitiveness in their market.”

PLM Use Cases

Heading into 2023, executives are recognizing that PLM is perhaps more important than ever, as companies continue to face economic uncertainty due to war, inflation, lingering challenges from the receding COVID-19 pandemic, and ongoing supply chain issues.

A recent article by engineering.com notes that the use of intelligent PLM software and processes helps companies achieve and access data standardization and consolidation, cross-business integration, improved user experience, and cross-platform analytics—all necessary to drive innovation and sustainable business resilience.

According to experts like Oracle, PLM software and IOT are being used for a variety of use cases, which include:

  • Seamlessly integrating data and processes in supply chain systems to develop a holistic product development strategy
  • Driving faster innovation to launch by more efficiently designing, developing, and managing new product introductions and engineering change requirements
  • Enforcing product compliance and tracking changes throughout a product’s lifecycle to adjust to changing global standards

Additionally, both Oracle and engineering.com note that PLM will play an important role in supporting the use of digital twins, or the digital representation of products, for tasks such as running virtual what-if scenarios, predicting the cost or benefit of product modifications, and ensuring optimal product performance.

“Going forward, virtual twins are becoming more realistic, more accurate, more predictive, more dynamic, and more timely representations of the real,” said engineering.com, noting that effective digital twin management implies robust lifecycle management.

This approach to using technology to monitor product lifecycles, especially with an eye toward EOL, is at the heart of what Dynamic Technology Solutions does when it evaluates and recommends technology solutions to maximize the lifespan of components used in mission-critical systems. To find out how this could work for your products, watch Dynamic’s Product Lifecycle Management case study video and download its Technology Asset Lifecycle Management Solutions fact sheet (PDF).

The Chip Shortage May be Abating, but Med Device Companies Must Maintain Vigilance

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While many industries — notably medical devices companies — have had to continually adjust their supply chains, or even delay production, to deal with an international shortage in semiconductor chips these past three years, that situation seems to be abating. Bain & Company, for example, recently reported that “some companies are starting to see relief.” And many observers were encouraged by the passage this past summer of the CHIPS and Science Act, which calls for the investment of more than $52 billion in U.S. semiconductor manufacturing, research and development, and workforce training, as well as another $24 billion in tax credits for chip production over 10 years.

This investment is intended to protect overall manufacturing. At present, only 12% of chip factories are in the U.S., while 75% are in East Asia. Reducing microchip imports will help stabilize medical device supply chains, which have been vulnerable to suppliers based in only one part of the world.

Looking forward to the implementation of the CHIPS Act, the Advanced Medical Technology Assocation (AdvaMed), the world’s largest trade association representing medical device manufacturers, is advocating that the U.S. government prioritize the delivery of chips to the medical device industry. World leaders outside of Asia are also playing their part. Having seen the threat that the microchip shortage had on products that protect their own citizens’ health, the European Commission recommended its member states address the chip shortages immediately and work with chip manufacturers to prioritize producing semiconductors for healthcare.

Preparing for Future Shortages

But those developments, while positive, don’t mean medical device manufacturers — nearly 80% of whom have reported production delays — no longer have to worry. Lessons from the past three years indicate not only a need for vigilance, but also for preparation.

Given the importance of chips used in medical devices, which must be reliable and able to handle power spikes, maintain security, and comply with privacy regulations, finding alternative vendors remains an issue, especially when the chips in question are “mature” — older and not as cutting-edge as the latest chip designs. Chip manufacturers would prefer producing newer microprocessors with a greater profit margin, and may not be interested in the medical technology market, which only uses about 1% of microchips sold.

One such manufacturer, Baxter International, which has several products that use multiple semiconductors, has lobbied its suppliers to prioritize manufacturing chips for the medical device industry in order to keep up with the demand from patients and healthcare providers. Other companies, such as Hologic, which uses only a few hundred chips per month in its production process, have had to reduce their use of microchips while working with their technology vendors.

The message: Given the experience of the past three years and despite encouraging signs, maintaining readiness remains critical in order for medical device companies to reduce the impact of another supply disruption. Here are some suggestions for how to prepare:

Reduce Supply Vulnerability – A survey by Deloitte showed that 70% of medical technology companies received more than half of their semiconductor chips from one vendor. Buying large volumes from one supplier can provide significant discounts, but it obviously leads to problems when that vendor can’t deliver their promised shipments. Regular supply risk assessments can help find developing issues before they become problems, as well as increasing supply inventories and finding alternative vendors before they’re needed.

Maintain End-to-End Visibility Throughout the Supply Chain – According to Gartner, supply chain forecast accuracy has improved as more companies incorporate analytics into their production. But a deeper, end-to-end visibility helps get an accurate picture of both future customer demand and component inventories. Supply reliability solutions that align with a vendor’s system may not have prevented the chip shortage but they could have alerted medical technology companies earlier in the crisis.

Partner With a CMO – Original equipment manufacturers developing partnerships with contract manufacturing organizations (CMO) closer to target markets can simplify inventory management, according to Ralph Tricomi, director, market development for Web Industries. Ideally the partner CMO has the market knowledge and supplier relationships to acquire the microchips needed to continue production.

Increase Awareness of Medical Technology – As AdvaMed has shown, advocating for medical device manufacturers to receive its supply of microchips is critical. Maintaining communication with governments whether through trade groups or individually about the essential nature of microchips in medical devices and the impact of the shortage on public health is essential, even as the shortage eases.

With chip manufacturers building more factories and capacity, and the CHIPS Act boosting U.S. production, the worst of the recent shortage is probably over. This microchip crisis may not be the last one to impact medical device manufacturers but it’s probably safe to say that the industry is better prepared for the next one.

Adopting a Sustainable Mindset to Combat Medical Device Waste

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Sustainable business practices allow companies to acknowledge and address environmental issues while also creating value, increasing revenue, and gaining cost savings. Environmentally aware organizations typically integrate a sustainability mindset into all of their activities, embedding it into their corporate strategy, purpose, and culture.

In the medtech industry, the sustainability conversation often begins with the problem of medical waste and the role of disposable plastic packaging to ensure the safety of patients and healthcare workers, as well as how to balance a sustainable approach with health and safety.

Many experts believe it is essential for medical device developers and manufacturers to embrace sustainability in order to ensure regulatory compliance and future profitability. “Sustainable medical devices are better for the environment and attractive to consumers and can provide cost savings, investor interest, and improved brand and competitive advantage,” notes a recent Medtech News article.

However, a sustainable approach to medical device production is not limited to discussions about disposable packaging and whether or not the device is recyclable. Instead, it means considering “how to reduce carbon emissions, energy and water use, and material waste across its entire lifespan, from design and material selection, to supply chain, to manufacturing and distribution,” said Medtech News.

The Lowest Possible Environmental Impact

Developers and manufacturers must consider all of these factors, as well as the safety and usability of the devices for patients and end users. They should “strive to achieve products with the lowest possible environmental impact throughout the product lifecycle without compromising performance, patient safety, functionality, aesthetics, quality, or cost,” notes the pharma industry news publisher On Drug Delivery.

According to these sources, an “eco-design” approach to device development and manufacturing could include:

  • The use of eco-friendly device materials
  • Designing “small” to minimize the use of unnecessary materials
  • Designing to maximize use of existing technologies, such as wireless technology
  • Manufacturing processes that minimize energy and water use
  • Minimal packaging using recyclable or degradable materials
  • Designing devices to ensure easy disassembly, facilitating reuse and recovery of device components at end of life

Medical device manufacturers and distributors, as well as healthcare companies, can also benefit the environment by finding a thoughtful and effective waste management partner. These partners will help ensure that discarded items are destroyed properly and in a sustainable manner, says Medical Device + Diagnostic Industry (MD+DI).

Sharing the Vision

According to MD+DI, the right waste management partner will:

  • Have a shared sustainability vision with its customer
  • Offer customized solutions for the customer’s needs
  • Take a dedicated, personalized approach to recycling and beneficially reusing waste that would otherwise end up in landfills
  • Offer enhanced data tracking and reporting of waste stream management and how efforts align with financial sustainability and corporate goals

The Dynamic Technology Solutions team heard plenty of buzz first hand this past year at industry events, including the Women’s Business Enterprise National Council conference and the Diversity Alliance for Science conference, about the need for businesses to adopt an environmental, social, and governance (ESG) perspective and how ESG is more important than ever. Medical device developers and manufacturers must embrace sustainability strategies and practices or else risk being left out of future business opportunities with companies that are prioritizing ESG.

Here’s another recent Dynamic Technology Solutions story on sustainability and ESG:

The Supply Chain Connection with ESG Performance