3 critical ERP capabilities

The U.S. medical device market size was $176.7 billion in 2020 and is anticipated to grow at a compounded 5% during the next eight years according to 2021 research by Grand View Research. But, continued global uncertainty means only those with deep, accurate, and up-to-the-minute operational insights and production agility will be equipped to weather coming storms and capitalize on fleeting opportunities.

That’s why medical device manufacturers are looking to modern, cloud-based enterprise resource planning (ERP) software to collect and aggregate data, manage production, generate reports, and provide the insights to improve business operations within a complex regulatory environment. In addition, companies must maintain quality data and track all product information across the entire supply chain to comply with government and industry standards, including, 21 CFR Part 820, 21 CFR Part 11, ISO 13485:2016, cGMP, ISO 9001:2015, and more. They also need an automated, comprehensive approach to the compliance process, providing complete product history, full traceability, and audit trails.

A forward-thinking approach to ERP software can address these requirements, but what are the most important capabilities to consider when evaluating ERP solutions?

Simply moving ERP to the cloud won’t do. It takes time to find a cloud designed for medical device manufacturers, suited to a specific strategy, with capabilities for the unique regulatory challenges of the medical industry that’s easily customizable.

Including these points in a vendor review and selection process will help in finding a comprehensive solution to manage, streamline, and automate everything from order processing and production management to product traceability, compliance reporting, and financial management.

1. Government industry standards. Medical device manufacturers must maintain detailed quality data and product information across the entire supply and manufacturing chain such as purchase order receipts, inventory material movements, shipments, and returns.

Modern medical device manufacturers need an automated, comprehensive approach to the compliance process, with the ability to drill down into complete product histories. They also need detailed and readily accessible audit trails and seamless integration with quality and other compliance systems. Additional integrations with production equipment and systems help identify and minimize waste and rework and further provide audits across operations. Traceability is particularly important for compliance, but it becomes complex when devices have numerous parts, components, and subassemblies.

ERP can track and trace what’s being used down to the component’s lot and/or serial number and are automatically removed from inventory and added to the as-built bill of materials (BOM) tree. ERP can also record the as-maintained record of lots and serial numbers used in the field as devices are repaired or undergo maintenance.

This provides ongoing audit ability and traceability across the entire medical device lifecycle. ERP provides the foundation for easy auditing, fast and accurate compliance reporting, and useful dashboards to view product quality, compliance, and traceability roadblocks and opportunities.

2. Precise inventory management. This is critical to achieving revenue and profit targets, and for complying with the myriad requirements of the medical device industry. Effective use of inventory helps optimize production while balancing supply chain costs and constraints.

Modern ERP can provide intelligence to help operations teams keep the right quantities on hand without overproducing products. When limited inventories constrain production, it provides insights to quickly shift to alternative components or redeploy capacity to other products. Or, when production lines are at capacity, ERP highlights potential changes, easing manpower or schedule changes across shifts, days, or weeks.

Today’s ERP can also provide granular visibility into inventory data, from top-level summaries down to lots, facilities, components, raw material specs, and expiration dates. Artificial intelligence (AI) and multidimensional analytics within modern ERP can further improve productivity, automate reports, and ease planning.

Improved forecasts harness historical data and allow what-if scenarios to account for shifting demand, inventory needs, or supply chain changes. ERP systems enhance operations, while features such as drag-and-drop scheduling plus load balancing and low-code customizations eliminate long, expensive training sessions.

3. Tight coordination. For today’s medical device manufacturers and suppliers, functions of planning, production, quality, safety, inventory management, procurement, and logistics demand a collaborative approach that optimizes the end-to-end supply chain.

A strong working relationship with suppliers delivers cost savings and minimizes availability problems, production and shipping delays, and quality and safety issues. As changes impact production, suppliers and manufacturers can quickly drill down to communicate, share data, and make on-the fly adjustments.

The company can share visibility into customer inventory levels and the resulting supplier needs, keeping everyone in the loop and providing an early warning to any potential disruptions, and a central place for tracking and sharing supplier key performance indicators (KPIs). Integration between ERP and other business systems also streamlines business by connecting purchasing and procurement with upstream engineering and R&D and downstream sales and customer service.

Upfront work saves time

Following these suggestions when looking to invest in a modern ERP system can help organizations align supplier orders with expected demand, better manage inventories and cash flows, and quickly bring new or updated products online.

Rootstock Software

About the author: David Stephans is president of Rootstock Software. He has more than 25 years of manufacturing and technology experience.