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Considering what MedSurg Industries is up against in the surgical-supply business, it needs all the help it can get.
MedSurg, the Herndon, Va.-based division of Isolyser Co. Inc., has found its niche in the customized surgical tray market. It makes kits containing everything a surgeon requires to conduct an operation, from gowns and towels to disposable instruments. Each tray is packed according to the hospital's own requirements, its contents arranged in strict order for maximum accessibility.
With $60m a year in sales, MedSurg faces a handful of much bigger rivals. Companies such as Baxter HealthCare and Maxim Medical not only supply trays, they make what's in them. MedSurg is the only player in the business that is not also a manufacturer, said Scott McMartin, vice president of sales and marketing. In many cases it buys from the same companies against whom it competes for kit sales. "Our competitors are essentially manufacturers trying to protect market share by vertically integrating," he said.
The role of the kit supplier has taken on added importance with the elimination of sterile supply warehouses by hospitals. That places a new emphasis on service - the one area in which McMartin feels MedSurg can compete. He argues that only MedSurg has the neutrality to build kits with what surgeons really want, not products that merely enhance the bottom line of suppliers. "MedSurg can't play a price game," he said.
One of MedSurg's value-added services is barcoding by universal product numbers (UPNs). The program helps to optimize hospitals' supply chains by weeding out the use of multiple suppliers and excess inventory. McMartin cites recent studies showing an annual price tag of $23bn for the movement of products into U.S. hospitals. "About half of that is waste," he said.
The UPN program requires a sophisticated information-systems solution, as do other aspects of the medical supply chain, including consignment programs, vendor-managed inventories and make to order. To fill that requirement, MedSurg looked to the MK Group, the Islandia, N.Y.-based applications business unit of Computer Associates International.
The MK Manufacturing product is an ERP package with a tightly integrated warehouse management system (WMS). It contains more than 40 functional modules, ranging from analysis of demand patterns to order-taking, according to Gary Layton, vice president of marketing with MK.
|Scott McMartin expects his software providers to deliver the same level of|
value-added service that MedSurg offers
its own customers.
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