Supply Chain Resilience

Over the past several years, between the COVID-19 pandemic and other global supply chain disruptions, we have seen how badly the global supply chain was impacted, with issues lasting for multiple years past the initial disruption. This was a wake-up call for the industry. While many supply chain issues cause inconvenience to our daily lives, medical equipment delays can completely disrupt surgeries and procedures, causing severe downstream ramifications that can endanger patients.

Deteriorating relations around the world and the initiation of the Inflation Reduction Act (which incentivizes US manufacturers to build at home via tax breaks) provide opportunities for supply chain resiliency programs to continue maturing through serious investments in MedTech. Embracing the digital thread will help MedTech companies protect and advance their operations so that they can continue providing the critical assets needed to treat and save patients.

The supply chain issues we saw during the COVID era reflected a true threat to public health and caused the FDA to weigh in on the global supply chain resiliency problem. Starting in 2022, the FDA introduced the Resilient Supply Chain Program, aiming to fortify public health supply chains and ensure medical devices remain accessible in emergency situations. Its primary objective is proactively monitoring, assessing and communicating supply chain risks and vulnerabilities with a goal to alleviate disruptions and shortages in the medical device supply chain while also improving supply chain visibility.

The FDA now maintains a Critical Medical Device List (CMDL). This list is updated every three years and includes medical device types where disruptions can lead to serious injury or death to patients or healthcare providers. Additionally, as future supply chain disruptions arise, the program intends to work closely with government partners and MedTech stakeholders to evaluate and resolve any issues as they appear.

The FDA continuously monitors the supply of critical medical devices through data from manufacturers, healthcare facilities and external data sources. Medical device manufacturers are required to report anticipated shortages or supply disruptions, particularly for devices on the CMDL.

Relevance to Digital Thread

A robust digital thread based on high-quality and consolidated enterprise systems helps organizations manage the supply chain more effectively, improve revenues, reduce the risk of supply shortages and stay compliant with FDA requirements pertaining to CMDL.

This process:

1. Starts in the design phase where considerable decisions are made about the types of parts to be sourced
2. Continues through procurement and manufacturing, even into the field

Enterprise PLM will manage an approved suppliers list which can be linked to parts and equipment in the process design. Planning teams receive that data in Enterprise Resource Planning (ERP) and can begin the procurement process. This is often ahead of the time of final product and process definition approval allowing them to get ahead of long lead times. Supply chain management (SCM) could be considered a sub-function of ERP that focuses specifically on the supply chain.

External data brokers can be integrated into enterprise systems and further enhanced by artificial intelligence. Similarly, manufacturers may provide portals to suppliers to feed real-time supply information that can be used in planning.

These tools can improve an organization's ability to make informed decisions about internal questions like production, inventory, pricing, marketing strategies, bottlenecks and areas for improvement AND external events like weather, regulatory changes or geo-political disruption.

We encourage clients to implement a supply chain-specific strategy that includes a reference architecture encompassing the above systems as a key deliverable. This architecture typically consolidates multiple legacy tools into enterprise platforms and optimizes the integration of systems, external data sources and analytics to enhance overall supply chain performance. We also recommend establishing data governance with clear goals around data ownership, mastership and interoperability.

Digital twins can be enabled as a result of an improved digital thread providing enhanced data quality of physical assets through simulation and emulation tools, like Emulate3D. When these twins are integrated with the Internet of Things (IoT) for facility equipment and smart connected workers, they can provide a dynamic, real-time model of manufacturing and distribution operations. These digital replicas simulate a wide range of scenarios, which can help optimize operational processes and improve the overall supply chain function. By mirroring the physical environment, digital twins capture and analyze continuous data streams from machinery, environmental factors and worker interactions. This integration empowers facilities to detect inefficiencies, identify bottlenecks and improve resource allocation.