- Unprecedented supply chain disruptions are adding new complexity to pre-existing supply chain challenges for MedTech companies
- Agility and visibility are key to MedTech companies staying out in front of supply chain risk
- Leading MedTech companies are enlisting critical contract data into these efforts, deriving contract intelligence that accelerates, protects, and optimizes their procurement operations
To bring their products to market, MedTech companies must manage and negotiate a complex, international supply chain that’s rife with challenges, old and new.
Old are the regulatory requirements, such as FDA control and classification of medical devices according to risk, invasiveness, and impact on health. These controls continue to have a considerable impact on the way MedTech products can be brought to market. Now, as always, device manufacturers are wholly liable for FDA compliance, regardless of what role they play in the supply chain.
New are the reverberating supply chain disruptions that arose and persist in connection with COVID-19 containment measures, causing freight and shipping delays and shortages of materials and key supplies. To fill gaps and secure materials, MedTech companies have needed to rapidly establish new relationships with suppliers around the world.
Why Compliance Must Stay at the Forefront of Supply Chain Strategy
While supply chain reconfigurations introduce complexity, the need to maintain compliance every step of the way compounds it. It might take more time to obtain supplier qualifications or more resources to change the degree of oversight for materials. Companies onboarding new suppliers in new regions or supplying new markets need to get up to regulatory speed and keep up with legislative changes.
Companies dealing with EU suppliers or supplying to the European market, for instance, now face the new European Medical Device Regulation (MDR), which requires companies to provide new regulatory documents and meet certain lifecycle and labeling requirements. Regulations in the United States are changing as well, and the FDA has continued to press reforms for premarket procedures for new devices, alongside new policies around software used as a medical device.
These pressures put MedTech companies at increased risk. Supply chain interruptions make it harder for companies to fulfill compliance requirements and meet market demands. The same challenges strip companies of their usual flexibility to pivot and respond to new opportunities.
Contracts: An Untapped Well of Supply Chain Data
Contracts are key to addressing and overcoming these challenges. Relationships between MedTech companies and their suppliers are powered by contracts – from the NDA signed before an RFx to the long-term strategic structure of ongoing delivery agreements. And, when regulations change, contracts must change with them. Indeed, a company is only as compliant as the contracts that set the rules for each and every one of their business relationships.
The problem is, traditional contract management slows down the process and injects risk rather than managing it. Handled manually, supplier onboarding often gets bogged down in legal review to ensure compliance, while competitors get to market faster.
The Rise of Contract Intelligence
MedTech companies need contract intelligence to address the twin pressures of supply chain agility and supply chain compliance. Contract Lifecycle Management (CLM) has long been emerging as a nice-to-have technology to meet market demands and mitigate risks in good times. But today it has emerged as a must-have to address supply chain instability when new vendors need to be onboarded quickly.
To gain that competitive advantage, CLM turns contracting challenges into strategic opportunities.
Contract intelligence technology like the Icertis Contract Intelligence (ICI) platform goes beyond CLM to streamline the source-to-contract process into a single, fluid motion that drives speed, agility, compliance, and value into the process. Through intelligent rules and guardrails, MedTech companies can configure sourcing processes that ensure regulatory and commercial compliance from the very first engagement with a vendor. From there, assessments against commercial, pricing, and risk requirements happen in tandem with the building of a contract, delivering never-before-seen speed to the supplier onboarding process. Contract intelligence ensures that contract data is consolidated, visible, and accessible across the company now and into the future.
To drive enterprise compliance, ICI employs AI to discover which contracts are impacted by regulatory changes. This lets companies automatically know they’re addressing all necessary aspects, so nothing falls through the cracks. Once these contracts are identified, mass amendments can be executed with a single click, with smart rules routing the new amendments to the right contract managers across the organization. If an amendment is rejected by a counterparty, smart rules can initiate corrective actions (including termination) to ensure organizations stay in line with the law.
When MedTech companies harness contracts this way, they’re empowered to rapidly pivot their supply chains as necessary and react to disruptions with agility and full confidence that compliance will be upheld.
What was once a manual and ad hoc process for ensuring compliance becomes a unified motion that ensures ecosystem-wide, always-on compliance.
In MedTech, supply chain agility is a must for staying compliant – and contract intelligence is a must for supply chain agility. Advanced CLM not only helps companies achieve both objectives; it keeps them competitive along the way. To find out more about how Icertis Contract Intelligence is transforming MedTech with its tailored contracting solutions, download our eBook at the link below.