Medical Device Manufacturer Uses HengLv to Clear 18-month Backlog in 4 Months

Why Henglv

Customer: Scientific Instruments and Laboratory Equipment Manufacturer

Industry: MedTech

· Customer Challenges:

· Post-pandemic demand spike pushed the supply chain beyond capacity

· 18-month backlog with unrealized revenue and unhappy customers

· Existing supply base couldn’t scale to meet increasing demand

Henglv Results:

· Delivered scalable supply chain solution that continues to support high-mix low-volume production with approximately 20,000 custom parts per year

· Cleared 18-month, 200,000 part backlog in 4 months valued at $5.7M,

· Reduced overall production costs by 29%

· Fortune-500 supply chain delivered parts in weeks, not months

Capabilities:

CNC, Sheet Metal, 3D Printing, Injection Molding

Here’s a familiar story. It starts with a supply chain problem faced by countless medical device companies. In this case, a 100-year-old U.S. medical device manufacturer with roughly $200M in annual revenue. Finance execs projected a surge of demand during the pandemic (which happened), but it was a post-pandemic demand spike that caught them off guard. And brought their ability to get products into the hands of customers to a screeching halt.

Not only that, they accumulated a 200K part, 18-month backlog, which tied up revenue by not being able to ship much needed units to their customers. Until this point, they’d been successful using their in-house manufacturing capabilities with a relatively small outsourced supply base. Unfortunately, neither could scale to meet customer demand and with the backdrop of supply shortages due to the pandemic, revenue delays put the company’s financials at risk.

If you’re a medical device company, you’re likely very familiar with this kind of problem. You can ramp up in-house production, running 24-7 to try to catch up, find more tier 2 and 3 suppliers to help (involving extensive vetting, onboarding, and managing), and invest aggressively in procurement experts to drive everything forward (time-consuming and resource-intensive). All of these solutions, particularly in the highly regulated medical device industry, don’t work fast enough and at a high enough quality to get you out of the production hole. And it’s not going to get any easier.

The bottom line: Your ability to get products into customers’ hands and maintain cashflow is in jeopardy.

You may have an in-house solution that (more or less) works now, but will it be able to responsively scale as you innovate and grow? Or when demand increases for some of your products? In most cases, the answer is “no.”

And it’s not going to slow down anytime soon. By some estimates, the global medical device market is projected to grow to USD $1.025T by 2032, so demand is heading up and to the right for the foreseeable future.