Sidney Lara, Service Principal of Aquant04.10.23
Despite suffering the negative impacts of inflation and economic downturn, medical device service organizations are successfully controlling their expenses. Nevertheless, this sector is not immune to market challenges such as the skills gap and retirement crisis, which remain significant factors contributing to increased service costs.
According to Aquant's 2023 Med-Device Benchmark Report, service costs, specifically "Resolution Cost," a key service metric which measures the total expenses incurred in completing a service case, including labor, parts, and overhead, decreased by approximately 4% last year. Despite this positive decline in costs, the study found that the skills gap is growing within medical device service teams which comes at a significant cost to organizations. Poorly-performing employees are costing their organizations nearly 86% more than their high-performing counterparts.
Leading medical device service organizations have gained an advantage by implementing changes in their corporate operations. They moved away from conventional business models by prioritizing technology initiatives such as AI and incorporating remote and self-service options. However, numerous organizations are encountering difficulties in keeping pace with these industry pioneers leading the charge within the medical device repair industry.
How can service leaders go about tackling these challenges? The first step is to holistically understand their workforce’s needs. Yes, prospective workers are looking for base requirements of a workplace like competitive compensation, but employees also seek professional support from their employers. They want to work for an employer that enables them to succeed. This includes providing the information and resources that enable technicians of all levels to perform at their best, without experiencing burnout.
To cultivate a skilled and driven service team invested in the work they provide to healthcare networks, service leaders must invest in up-to-date technology that provides the best knowledge-retention resources and expert guidance. This is especially pertinent right now given the limited time and capacity experienced workers have for training and mentorship. Service intelligence tools that facilitate knowledge-sharing throughout an organization are fundamental in cultivating a prosperous service team. While job-hopping has become more prevalent in recent years, younger generations are more inclined to remain with companies that equip them with technology, resources, and training to expand their skill set and complete more tasks efficiently.
Data shows medical device technicians carried out 3.3% fewer work orders over the previous year, indicating that organizations found it challenging to upgrade the skills of less experienced technicians rapidly. The bottom 20% of medical device service companies suffered from a significant knowledge gap between their most skilled and least skilled technicians, costing them over 200% more, be it costs of unnecessary parts ordered or repeat service visits. Aquant's research discovered that elevating low-performing employees to the level of average performers would decrease service costs by 7%. Moreover, if every technician had the knowledge and proficiency to perform like the top 20% of their company’s workforce, service costs would be reduced by almost 30% across the board.
Neglecting to address the ever-growing skills gap in service teams — particularly in an industry pertaining to the upkeep of crucial medical infrastructures — can have detrimental consequences, including overburdening experienced technicians, escalating service costs, diminished customer satisfaction, higher customer turnover, reduced organizational resilience, and inhibited growth. And these risks will have a ripple effect into overall efficiencies of the serviced medical networks; slower service fixes means more medical devices offline, leading to overall slower operations within hospitals. Skills gaps not only burden the most experienced technicians. The effects go all the way to the patients and practitioners within hospital walls.
To mitigate these risks, service teams should implement knowledge retention and diagnostic tools, such as service intelligence, and other digital resources that enable continuous learning and facilitate sharing of insights among colleagues.
The success of organizations like this can be attributed to their consistent use of AI and predictive technology models to quickly gather insights and make important decisions for their customers. These technologies not only gathered these insights, but they also provided answers to rookie workers while on service calls, putting the knowledge of veteran technicians in the hands of an entire workforce. Additionally, leading companies used AI to optimize customer service experiences, providing personalized recommendations to power call centers and chatbots. By minimizing downtime and prioritizing customer needs, these organizations fostered a thriving service culture that left a lasting impression, and most importantly, kept medical networks running as smooth as possible.
Implementing AI-powered technologies within the medical device service industry can also lead to significant cost savings. For instance, a large medical device company was able to reduce their number of service return visits per month by 20% after adopting service intelligence. This led to an estimated annual savings of approximately $5.6 million for the company.
Nearly 80% of top-performing field service organizations leverage AI to enhance productivity, lower costs, and provide better employee experiences according to a recent Salesforce report. In contrast, less successful organizations have yet to make investments in tools, resources, people, and processes. If this gap continues to grow between top and bottom-performing organizations, not only will the less sophisticated organizations suffer, their poor service will hinder the effectiveness of medical practitioners, and worsen the hospital experience for patients.
Sidney Lara is currently the Service Principal at Aquant, a software company focused on bringing service intelligence to field service organizations through AI and data-powered platforms. With over 20 years of experience in operations and service leadership, Sidney is passionate about eliminating waste from business processes and focusing on the activities creating value for customers. Prior to joining Aquant, Sidney worked for RATIONAL USA as Vice President of North America Service.
According to Aquant's 2023 Med-Device Benchmark Report, service costs, specifically "Resolution Cost," a key service metric which measures the total expenses incurred in completing a service case, including labor, parts, and overhead, decreased by approximately 4% last year. Despite this positive decline in costs, the study found that the skills gap is growing within medical device service teams which comes at a significant cost to organizations. Poorly-performing employees are costing their organizations nearly 86% more than their high-performing counterparts.
Leading medical device service organizations have gained an advantage by implementing changes in their corporate operations. They moved away from conventional business models by prioritizing technology initiatives such as AI and incorporating remote and self-service options. However, numerous organizations are encountering difficulties in keeping pace with these industry pioneers leading the charge within the medical device repair industry.
Workforce Issues Top the List
The most significant challenge for most field service leaders, according to a survey of 100 individuals in leadership positions, is hiring, retaining, and motivating workers. Additionally, leaders are facing difficulties in upgrading the skill set of technicians and creating effective training programs. Finally, uncovering accurate and meaningful data-driven insights is another significant hurdle that ranks high on the list of current industry challenges.How can service leaders go about tackling these challenges? The first step is to holistically understand their workforce’s needs. Yes, prospective workers are looking for base requirements of a workplace like competitive compensation, but employees also seek professional support from their employers. They want to work for an employer that enables them to succeed. This includes providing the information and resources that enable technicians of all levels to perform at their best, without experiencing burnout.
Workforce Retention and Motivation
Aquant’s findings reveal the medical device service sector experienced a 6% growth in the number of technicians and a 2.5% rise in field events. Despite the increased headcount, numerous companies encountered significant obstacles throughout the past year. Some teams may have recruited more workers, but may not have hired qualified candidates or managed to retain those new hires before equipping them with the skills to deliver service that met customer standards. Most importantly, experienced technicians retired at a faster rate than their replacements could enter the workforce, leaving a wider skill gap within an industry in dire need of knowledgeable workers.To cultivate a skilled and driven service team invested in the work they provide to healthcare networks, service leaders must invest in up-to-date technology that provides the best knowledge-retention resources and expert guidance. This is especially pertinent right now given the limited time and capacity experienced workers have for training and mentorship. Service intelligence tools that facilitate knowledge-sharing throughout an organization are fundamental in cultivating a prosperous service team. While job-hopping has become more prevalent in recent years, younger generations are more inclined to remain with companies that equip them with technology, resources, and training to expand their skill set and complete more tasks efficiently.
Technician Skill Development & Employee Training
Career growth and development is a primary concern for younger generations, specifically Millennial and Gen Z workers entering the service industries. Historically, this is not common practice, but, leading organizations are acknowledging the significance of these programs and beginning to implement changes.Data shows medical device technicians carried out 3.3% fewer work orders over the previous year, indicating that organizations found it challenging to upgrade the skills of less experienced technicians rapidly. The bottom 20% of medical device service companies suffered from a significant knowledge gap between their most skilled and least skilled technicians, costing them over 200% more, be it costs of unnecessary parts ordered or repeat service visits. Aquant's research discovered that elevating low-performing employees to the level of average performers would decrease service costs by 7%. Moreover, if every technician had the knowledge and proficiency to perform like the top 20% of their company’s workforce, service costs would be reduced by almost 30% across the board.
Neglecting to address the ever-growing skills gap in service teams — particularly in an industry pertaining to the upkeep of crucial medical infrastructures — can have detrimental consequences, including overburdening experienced technicians, escalating service costs, diminished customer satisfaction, higher customer turnover, reduced organizational resilience, and inhibited growth. And these risks will have a ripple effect into overall efficiencies of the serviced medical networks; slower service fixes means more medical devices offline, leading to overall slower operations within hospitals. Skills gaps not only burden the most experienced technicians. The effects go all the way to the patients and practitioners within hospital walls.
To mitigate these risks, service teams should implement knowledge retention and diagnostic tools, such as service intelligence, and other digital resources that enable continuous learning and facilitate sharing of insights among colleagues.
Uncovering Company Data for Greater Efficiency and Lower Costs
If utilized effectively, a company’s internal insights have the potential to provide the most effective answers on how to tackle service challenges. However, it requires accurate and organized data and proper analysis to draw conclusions. Leading organizations rely on AI-powered technology to ensure access to clean data and sophisticated analysis engines for making informed decisions. Aquant’s report reveals that medical device service companies saw, on average, improvement in key metrics over the past year. They achieved a 4.5% increase in "First Time Fix Rates'' by making more accurate fixes on the first customer inquiry. They also offered simple fix-it-yourself options and resolved more solutions remotely, resulting in a 34% increase in "Time Between Visits."The success of organizations like this can be attributed to their consistent use of AI and predictive technology models to quickly gather insights and make important decisions for their customers. These technologies not only gathered these insights, but they also provided answers to rookie workers while on service calls, putting the knowledge of veteran technicians in the hands of an entire workforce. Additionally, leading companies used AI to optimize customer service experiences, providing personalized recommendations to power call centers and chatbots. By minimizing downtime and prioritizing customer needs, these organizations fostered a thriving service culture that left a lasting impression, and most importantly, kept medical networks running as smooth as possible.
Implementing AI-powered technologies within the medical device service industry can also lead to significant cost savings. For instance, a large medical device company was able to reduce their number of service return visits per month by 20% after adopting service intelligence. This led to an estimated annual savings of approximately $5.6 million for the company.
Nearly 80% of top-performing field service organizations leverage AI to enhance productivity, lower costs, and provide better employee experiences according to a recent Salesforce report. In contrast, less successful organizations have yet to make investments in tools, resources, people, and processes. If this gap continues to grow between top and bottom-performing organizations, not only will the less sophisticated organizations suffer, their poor service will hinder the effectiveness of medical practitioners, and worsen the hospital experience for patients.
Sidney Lara is currently the Service Principal at Aquant, a software company focused on bringing service intelligence to field service organizations through AI and data-powered platforms. With over 20 years of experience in operations and service leadership, Sidney is passionate about eliminating waste from business processes and focusing on the activities creating value for customers. Prior to joining Aquant, Sidney worked for RATIONAL USA as Vice President of North America Service.