How data analytics can increase medical device sales
In a recent Bain survey, medtech executives ranked big data and analytics as the technology that will have the greatest impact on the industry over the next five years. "As the medtech market becomes more competitive, leadership teams are rethinking their commercial models to address customers’ changing needs. An important part of that process is differentiating the sales strategy and portfolio value proposition to improve the odds of winning as providers reduce the number of vendors they use."In this blog, we review how analyzing data can help the Medical Device industry increase performance.
Despite a decline of -3.2% in 2020, the global medical device market is expected to rebound in 2021 with a 6.1% compound average growth rate and reach $603.5 billion by 2023.
Major contributing factors include increasing healthcare expenditure, growing health awareness, wider chronic health problems, more treatment options, more informed customers, emerging technologies, and an ageing population. The areas where medical devices are in most demand include cardiovascular, surgical, infection control segments and as well as general medical devices.
Intensifying competition has led to changes in the way companies in this sector operate. In addition to complexity reduction, medical device companies are beginning to use insights from data analysis to help shape business decisions leading to improved efficiencies, increased profit margins and manage inventory.
Analyzing ERP data is simple
Analyzing company data is one of the most cost-effective ways to save time and increase revenue. Like most industries, medical device manufacturers and distributors produce masses of data every day but many still underestimate its importance or are unclear about how to access and use it to their advantage. There is an assumption that because a company invests heavily in an ERP system, it should be capable of generating adequate reports based on the data it collects.
While an ERP provides useful information across production, operations and finance, actually getting the information for others in sales, marketing and management often involves time, effort and complex spreadsheets that are prone to error, sit on peoples’ hard drives and that only time-poor IT departments and data experts can access and manipulate.
Analyzing data through complex spreadsheets or asking IT to run reports can significantly impact a business’s ability to make quick decisions based on up-to-the-minute information.
Companies in this sector are therefore turning to data analytics software that bolts onto ERP and other systems and presents the data in more visual and accessible formats. Some vendors take it a big step further and make it easy to follow your train of thought and drill into the underlying detail to find answers to your most pressing questions.
The need for data analytics
Data analytics relies on your company’s data to help form a clear picture of how a business is performing.
The ease-of-use means people company-wide can explore the data to identify trends, discover opportunities and spot potential threats before they can have any real impact. BI reports are generated in a matter of minutes and give users a view of the business’s performance in real-time.
Access to data and a user-friendly solution to analyze it are steps that will help suppliers and distributors of medical devices harness this growth potential.Tracking sales data by customer can reveal trends and opportunities to grow revenue and prevent challenges before they impact your bottom line.
Armed with data, your sales team will have a better understanding of what your customers are buying and what they are not, over time.
With this information, you can identify potential threats or opportunities and adjust your sales representatives’ approach to customers accordingly.
Improve inventory management
Data analytics can help by easily and quickly identifying stock turns, inventory-to-purchase ratio, slow-moving stock and gross margin return on investment (GMROI) by manufacturer, product group, product or location.
A data solution lets you quickly view how much stock you have for a particular product and sort from highest to lowest, or drill down on a specific selection to find even more in-depth information.
The medical device industry can be volatile with seasonal fluctuations and changing demand so the ability to forecast and monitor these fluctuations is vital to ensuring overstock (which reduces margins), deadstock (presents a loss to the business) and understock (impacting service levels) are minimized, or ideally, do not occur.
Appropriate stock levels underpin customers getting their products delivered in full on time (DIFOT). The ability to meet purchase requirements is important for customer retention.
Choosing the right BI solution
Mounting competition and increasing pressure on pricing have made it even more important to capture, manage, access and analyze data to improve your ability to serve your customers and increase ROI. Using an ERP system to perform these functions will leave you dissatisfied and frustrated with the complexity of the data, or the time it takes to generate reports and uncover answers.
A Phocas data analytics solution collects and converts data locked away in your systems and gives you the flexibility to ask questions of it. You might want to see sales data for February and then drill down into specific brands and even products to find out more.
Phocas lets you do advanced analytics in the intuitive analysis grid which becomes the single source of truth for company-wide analysis. Information is available to anyone, anytime and you don’t have to be a spreadsheet expert to use it.
For more information on how your business can better satisfy customers through effective data analysis, download our free Medical Device industry eBook: Using data in the medical device industry to increase sales and improve inventory management.
How data analytics can drive medical device sales
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