MARCH - 20238The global medical device market in 2022 is valued at roughly half a trillion US dollars and is projected to grow at 4 to 6 % year on year in the coming few years. While the market is largely dominated by established manufacturers with considerable R&D investments, there is a growing presence of many newer start-ups making their way into this vibrant industry with various kinds of products, services, and business model innovations. This is fueled by a growing disease burden, an ever-increasing healthcare awareness, and a need for better healthcare by an expanding middle-class population. Unlike consumer goods and other tech-enabled industries, the time to market for medical device innovations is much longer with many regulatory and user hurdles along the way. While many industries have improvised on their supply chain to make it just in time, the healthcare industry in general suffers from a more complex and demanding supply chain that may cause a huge drain on the working capital and obsolescence due to poor inventory management. Most of the top medical device companies employ a good mix of direct versus indirect sales partnerships to ensure wide market coverage and faster scaling of their innovations. Some of the reasons for going indirect that is, partnering with a medical device distributor include: · Insufficient regulatory and operational experience in a particular geography outside of their home territory · The presence of well-established distributors focusing on a particular product segment or established relationships across a wide customer network · Accessing markets with insufficient scale to deliver returns on capital (logistics, office space, manpower, IT systems, etc.) · Incomplete solutions: This is especially the case for manufacturers who specialize in a particular product but lack other key products that form the complete solution often needed by healthcare customers. Distributors help to plug this gap by complementing other products in their portfolio. · Better management of working capital: Outsourcing the receivables and inventory to a party closer to the customer helps to keep operational KPIs in check Engaging a distributor as part of its sales strategy can give a brand the competitive edge it needs in this critical industry. Here are 5 of the many Benefits of Partnering with Medical Device Distributors: 1. Access to a highly trained and well-networked sales force: Investment in human capital is the single most important lever to grow any business and selling medical devices In My OpinionDRIVING MEDICAL DEVICE REVENUE VIA INDIRECT SALES: 5 BENEFITS OF PARTNERING WITH MEDICAL DEVICE DISTRIBUTORS By Srikant Lal, Vice President, Medical Solutions, IDS Medical Systems, Singapore Srikant Lal
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