Cutting Costs While Ensuring Quality & Safety in Medical Device & Diagnostics Companies
One of the greatest challenges that Medical Device & Diagnostics companies face is ensuring that their products meet the high quality standards that are required at every stage of the product lifecycle, while also holding down costs. As budgets continue to shrink, leaders must be prepared to shift resources, automate and outsource activities, develop and retain key talent, and build business plans that justify their budgets.
To understand how to improve their quality function, leaders must understand what their key challenges are. From recent research, Best Practices, LLC identified the following as the top challenges that industry leaders face:
Despite the challenges listed above, nearly half of all participating companies saw a spending increase for the Quality function over the past three years. One of the main reasons for the increase in budgets was to help in dealing with increased regulatory requirements. Regulatory factors seem to be an expected cost of business in the healthcare sector. The majority of companies do not expect regulatory factors to result in future Quality support cost decreases.
As regulation increases and budgets decrease, quality leaders must also understand where and when to spend their money. From our research, we found that the majority of leaders were spending their budgets in the following areas:
- Product Support (30%)
- Inspection/Production (25%)
- Non-conforming Events (23%)
- Compliance Activities (16%)
Although a majority of participants anticipate flat budgets for most benchmarked Quality sub-functions, half expect to see funds cut in one category—non-conforming events. Nearly 40% of the total benchmark class and 50% of participants in the large company segment expect funding increases for Compliance activities.
Understanding how other medical device & diagnostics companies are coping with the many challenges within their quality functions can help executives to avoid pitfalls and common stumbling blocks. It is more critical than ever that Medical Device companies know how to accurately & effectively define and allocate Quality spend, identify factors that impact spending levels, and invest in future mission-critical Quality activities.