MD&M Conference Explores Internet Strategies for Device Manufacturers

Each day brings fresh news of manufacturers forming on-line alliances or Internet companies springing up to service end-to-end healthcare needs. Clearly the Internet continues to alter the medical device industry. How to meet that challenge is the main focus of one of the sessions at the Medical Design & Manufacturing (MD&M) East Conference being held June 5–7 in New York City.

Richard Cohen, principal of The Walden Group and chair of the session titled The Internet: Essential Strategies for Device Manufacturers, sees medical device companies implementing Internet capabilities in three ways: internally, through alliances, or by acquiring or being acquired by an Internet company. This last option may be a strategy reserved for larger companies, Cohen believes, as "buying a dot-com company would put a medical device manufacturer beyond the scope of its core competency." He finds most manufacturers confident they can develop a strategy within their own companies or through an alliance.

Jim McFarlane, president and CEO of Entelx Inc., addresses the issue of partnership relationships in the e-business environment. "In today's world, the customer is in charge," he says, adding that this has led many manufacturers to increase the number of distributors. "Manufacturers have recognized that distributors still bring huge value to the equation," McFarlane explains. "The value [they bring] has to shift, however, from being just an inventory supply to providing knowledge about the service side." He notes that e-marketplaces like a Web "exchange" or Neoforma.com will take a portion of the revenue, but will not make the traditional supply chain obsolete. In today's market, all facets of the chain bring some value to the table by finding unique solutions for the customers.

"One of the advantages of the Internet is the ability to collaborate," observes McFarlane. The focus has shifted from concentration on the quality of the product to quality and customer service, he maintains. Selling partners must collaborate in order to meet the needs of the customer. "Customer loyalty is [based on] who makes it easiest to do business," says McFarlane, "and by who brings me the greatest value." This value can include product collaboration where the customer can log on and personalize a product.

The ways in which the Internet can increase efficiency in traditional business strategies and create opportunities for entirely new ones will also be discussed by speakers from Medibuy, Manhattan Associates, Mallinckrodt-Nellcor, and Neoforma.com at the MD&M East conference.—Linda Nugent