Joe McBeth, VP Global Supply Chain, Jabil Healthcare01.29.20
This is a very exciting time to be in healthcare, as technology and digital healthcare capabilities continue to transform the industry. Connected health devices—things that can track patient compliance or provide insights on how well a drug is being metabolized or provide monitoring of a patient’s biomarkers—are opening up tremendous opportunities for future product iterations, as well as disease-state product platforms. In a 2018 survey—Connected Health Technology Trends1—Jabil canvassed more than 200 healthcare decision makers and determined that all of them had plans to develop and bring to market a connected health device. The medical industry has one primary goal: improve patient outcomes. Digital health and connected devices are an extraordinary new tool for delivering on this objective.
The Jabil survey responses demonstrate confidence that healthcare is shifting from being primarily reactive to becoming more proactive, preventative, and patient-focused. The Internet of Things (IoT), long a “hot” trend across other industries, is now impacting healthcare, with almost three out of four healthcare executives predicting Internet of Medical Things (IoMT) healthcare devices will be disruptive to product lifecycles within three years. According to Deloitte, remote patient monitoring, enabled by connected health technology, will result in healthcare being able to reach more people and with greater ease, increasing value- over volume-based care, and empowering patients to take better control of their lives, thereby improving quality of life.2
Sounds like a market with vast potential and a healthy level of buy-in from key decision makers, right? There are, however, real challenges to the production of connected healthcare solutions. Historically, due largely to a sometimes burdensome and lengthy product development cycle, healthcare lags behind other connected industries.
Let’s break down that product development cycle—by the numbers—based on survey responses:
What’s a healthcare manufacturer to do? A good place to start is to examine the most significant factors currently slowing down the product development cycle, then determine what measures can be taken to meet those challenges.
Healthcare Product Development Cycle: The Delays
Healthcare solutions are, by their nature, held to a higher standard than, say, consumer electronics; a smartphone software glitch doesn’t carry the life or death consequences an inaccurate diagnosis or poor treatment method might. It follows that, overall, the healthcare industry is more risk-averse, which can lead to hesitancy when undertaking a culture-shifting acceleration of a company’s production cycles. Unlike other connected solutions, such as in the home or building industries, for example, which can be experimented with and adjusted to some degree, connected healthcare has no margin for error. Rather, it is required out of the gate to be as calculated and precise as possible.
The worst-case result of an inefficient, slow-moving product development cycle is that product does not reach the market. I have seen companies abandon healthcare projects more frequently than consumer electronics due to concerns over the intense focus on technology and feasibility studies, as well as human factors. According to the survey, one in five companies that produced a healthcare solution that solved technology, production, and compliance issues had to retract it.
Ninety-five percent of survey respondents admitted to facing manufacturing challenges, although only 17 percent of participants deemed manufacturing problems as the most daunting challenge in developing their connected health solutions. The top manufacturing challenges shared were high manufacturing costs, a lack of sufficiently sophisticated enabling technologies, and sourcing issues, driven by the often-volatile electronic components market.
Component shortages present as significant a challenge to connected healthcare as they do to other connected industries; one in four survey respondents cite this as a major handicap of concern. Lead times of 500 days to obtain components such as capacitators and resistors create barriers for in-production devices, as well as for new designs utilizing legacy components. Cost becomes a real factor, as the product development cycle will become more expensive the longer production is held up, sometimes simply for lack of a 15-cent part. A vicious cycle is created, in which component shortages delay a new product launch to market, which in turn discourages the manufacturer from future investment in new product launches.
Consider another “by the numbers” perspective; based on survey responses:
Why? Certainly, we can infer impact from all the issues already discussed. But these numbers speak somewhat more directly to momentum. There are measures manufacturers can initiate to gain traction with their connected healthcare product development process and help make it more efficient and effective.
Smooth the Way with the FDA
One way to shorten the connected healthcare product lifecycle is to look at working with government agencies [e.g., the U.S. Food and Drug Administration (FDA)], as leveraging a resource rather than as another delay to market launch. Consulting the FDA is a given for most U.S. healthcare manufacturers—more than 60 percent of survey participants said they produce healthcare solutions that require FDA approval. Early engagement with government agencies, working with them to identify risks and concerns, then addressing these early in the development lifecycle, can go a long way toward acceleration of the regulatory approval process for connected devices.
Realize the Potential of Partners
Establishing a partnership can be an effective measure for a company to gain a new area of expertise and push its connected health solutions forward. Among survey respondents, manufacturing companies with prior expertise in connected devices were perceived to offer the most potential benefit. Next in line, at 63 percent, were technology partners with cloud and data privacy expertise. Nearly half of survey respondents saw the value of partners with expertise in government processes who can assist in cutting through confusing, lengthy regulatory processes.
Conclusion
The lag in connected healthcare is understandable; as noted earlier, people’s lives may depend on this technology. That doesn’t mean we shouldn’t keep pushing to make the process smoother to get more connected healthcare devices into the market. The potential benefits to patients are too great; connected healthcare can allow doctors to monitor their patients remotely, detect symptoms of illness or medical conditions before they become serious (through predictive analytics), and give patients more control over their own health.
Rather than asking, “Can we afford the risk of pushing innovative healthcare solutions?” I urge manufacturers to ask, “Can we afford the risk of NOT offering innovative connected health solutions?” Speeding up the healthcare product development cycle is a good place to start in improving, and potentially even saving, millions of lives.
References
As VP of global supply chain management for Jabil Healthcare, Joe McBeth oversees the Jabil division’s supply chain operations, including inventory control, strategic sourcing, supplier development, and supply chain creation. An enthusiastic challenger of assumptions, McBeth has proven to be exceptionally adept at managing the complexities of supply chain management, providing Jabil clients with the insight and guidance required to navigate the lightning-fast market changes, unpredictable resources, and sometimes baffling compliance and regulatory requirements of today’s healthcare market. Prior to his current role, McBeth helped build the broader global supply chain organization within Jabil, overhauling a previously decentralized organization into a highly efficient, regionally based, global program. His ongoing input and direction has been integral to the development of Jabil’s InControl platform, the company’s state-of-the-art supply chain decision support solution. McBeth began his career with Jabil in 1993 as a manufacturing supervisor. In addition to earning his bachelor’s degree from Michigan State University, McBeth graduated with an MBA in Materials Logistics Management from MSU’s Eli Broad College of Business.
The Jabil survey responses demonstrate confidence that healthcare is shifting from being primarily reactive to becoming more proactive, preventative, and patient-focused. The Internet of Things (IoT), long a “hot” trend across other industries, is now impacting healthcare, with almost three out of four healthcare executives predicting Internet of Medical Things (IoMT) healthcare devices will be disruptive to product lifecycles within three years. According to Deloitte, remote patient monitoring, enabled by connected health technology, will result in healthcare being able to reach more people and with greater ease, increasing value- over volume-based care, and empowering patients to take better control of their lives, thereby improving quality of life.2
Sounds like a market with vast potential and a healthy level of buy-in from key decision makers, right? There are, however, real challenges to the production of connected healthcare solutions. Historically, due largely to a sometimes burdensome and lengthy product development cycle, healthcare lags behind other connected industries.
Let’s break down that product development cycle—by the numbers—based on survey responses:
- Almost half reported their connected healthcare product development cycles range from 18 to 36 months.
- Within that cycle, it was larger companies that were particularly hard-pressed to complete a cycle in a year or less.
- Only 2 percent of larger companies (more than 5,000 employees) reported that 12 months was an adequate time frame for completing a product development cycle—compared to 15 percent of smaller companies (1,000 to 5,000 employees).
What’s a healthcare manufacturer to do? A good place to start is to examine the most significant factors currently slowing down the product development cycle, then determine what measures can be taken to meet those challenges.
Healthcare Product Development Cycle: The Delays
Healthcare solutions are, by their nature, held to a higher standard than, say, consumer electronics; a smartphone software glitch doesn’t carry the life or death consequences an inaccurate diagnosis or poor treatment method might. It follows that, overall, the healthcare industry is more risk-averse, which can lead to hesitancy when undertaking a culture-shifting acceleration of a company’s production cycles. Unlike other connected solutions, such as in the home or building industries, for example, which can be experimented with and adjusted to some degree, connected healthcare has no margin for error. Rather, it is required out of the gate to be as calculated and precise as possible.
The worst-case result of an inefficient, slow-moving product development cycle is that product does not reach the market. I have seen companies abandon healthcare projects more frequently than consumer electronics due to concerns over the intense focus on technology and feasibility studies, as well as human factors. According to the survey, one in five companies that produced a healthcare solution that solved technology, production, and compliance issues had to retract it.
Ninety-five percent of survey respondents admitted to facing manufacturing challenges, although only 17 percent of participants deemed manufacturing problems as the most daunting challenge in developing their connected health solutions. The top manufacturing challenges shared were high manufacturing costs, a lack of sufficiently sophisticated enabling technologies, and sourcing issues, driven by the often-volatile electronic components market.
Component shortages present as significant a challenge to connected healthcare as they do to other connected industries; one in four survey respondents cite this as a major handicap of concern. Lead times of 500 days to obtain components such as capacitators and resistors create barriers for in-production devices, as well as for new designs utilizing legacy components. Cost becomes a real factor, as the product development cycle will become more expensive the longer production is held up, sometimes simply for lack of a 15-cent part. A vicious cycle is created, in which component shortages delay a new product launch to market, which in turn discourages the manufacturer from future investment in new product launches.
Consider another “by the numbers” perspective; based on survey responses:
- Only 3 percent of companies have reached the certification stage of their connected devices’ product development cycle…
- ...while 13 percent have reached testing.
- Only 16 percent have successfully launched a complete product.
- Overall, 60 percent of companies have not yet delivered a connected healthcare product at all or are still in early testing of a prototype.
Why? Certainly, we can infer impact from all the issues already discussed. But these numbers speak somewhat more directly to momentum. There are measures manufacturers can initiate to gain traction with their connected healthcare product development process and help make it more efficient and effective.
Smooth the Way with the FDA
One way to shorten the connected healthcare product lifecycle is to look at working with government agencies [e.g., the U.S. Food and Drug Administration (FDA)], as leveraging a resource rather than as another delay to market launch. Consulting the FDA is a given for most U.S. healthcare manufacturers—more than 60 percent of survey participants said they produce healthcare solutions that require FDA approval. Early engagement with government agencies, working with them to identify risks and concerns, then addressing these early in the development lifecycle, can go a long way toward acceleration of the regulatory approval process for connected devices.
Realize the Potential of Partners
Establishing a partnership can be an effective measure for a company to gain a new area of expertise and push its connected health solutions forward. Among survey respondents, manufacturing companies with prior expertise in connected devices were perceived to offer the most potential benefit. Next in line, at 63 percent, were technology partners with cloud and data privacy expertise. Nearly half of survey respondents saw the value of partners with expertise in government processes who can assist in cutting through confusing, lengthy regulatory processes.
Conclusion
The lag in connected healthcare is understandable; as noted earlier, people’s lives may depend on this technology. That doesn’t mean we shouldn’t keep pushing to make the process smoother to get more connected healthcare devices into the market. The potential benefits to patients are too great; connected healthcare can allow doctors to monitor their patients remotely, detect symptoms of illness or medical conditions before they become serious (through predictive analytics), and give patients more control over their own health.
Rather than asking, “Can we afford the risk of pushing innovative healthcare solutions?” I urge manufacturers to ask, “Can we afford the risk of NOT offering innovative connected health solutions?” Speeding up the healthcare product development cycle is a good place to start in improving, and potentially even saving, millions of lives.
References
As VP of global supply chain management for Jabil Healthcare, Joe McBeth oversees the Jabil division’s supply chain operations, including inventory control, strategic sourcing, supplier development, and supply chain creation. An enthusiastic challenger of assumptions, McBeth has proven to be exceptionally adept at managing the complexities of supply chain management, providing Jabil clients with the insight and guidance required to navigate the lightning-fast market changes, unpredictable resources, and sometimes baffling compliance and regulatory requirements of today’s healthcare market. Prior to his current role, McBeth helped build the broader global supply chain organization within Jabil, overhauling a previously decentralized organization into a highly efficient, regionally based, global program. His ongoing input and direction has been integral to the development of Jabil’s InControl platform, the company’s state-of-the-art supply chain decision support solution. McBeth began his career with Jabil in 1993 as a manufacturing supervisor. In addition to earning his bachelor’s degree from Michigan State University, McBeth graduated with an MBA in Materials Logistics Management from MSU’s Eli Broad College of Business.
