The current state of medical device logistics

DSV Market Monitor


In cooperation with Supply Chain Media, DSV created a mindmap for Medical Device Logistics with the aim to create an integral overview of the issues currently relevant to this dynamic sector. This mindmap was distributed during the LogiMed conference in Munich and the Healthcare and Life Siences conference in Amsterdam both in November 2013.

With the objective to assess the accuracy of the mindmap and confirm the current state of the Medical Device industry in terms of the major supply chain issues as well as to prioritise the strategic requirements 70 supply chain executives of Medical Device manufacturing companies were interviewed. The results of the study were further interpreted by supply chain experts in the Medical Devices industry.

The questionnaire contained 6 questions in which respondents could select and rank answers. The percentage displayed above each column represents the frequency an answer was selected. The color build up within each column shows the ranking each option got when it was selected. In this perspective, totals of the combined columns are larger than 100% as people usually selected more than 1 option.


Worth over $300 billion, the medical device & diagnostic industry supply chain faces the unique challenge of stringent regulation and compliance. The industry is currently picking up on warehousing and distribution synergies in order to develop a more integrated supply chain. Combined repairs and servicing, returns and in-hospital services are becoming vital in order to stay abreast of the competition. Furthermore the over dependence on the US market and Europa of many of its industry leaders has led to accelerated international market expansion. With a logistics process that is highly demanding in quality standards and requiring ISO 13485 certified facilities, this current market context poses huge pressure on notably the supply chain function of medical device manufacturers.


  • The survey indicates that the maturity of Medical Device supply chains industry has grown over the past years. Current requirements do not just include pick, pack and ship but extends to more advanced and value added services
  • Supply Chain visibility is the most important bottleneck for further supply chain optimization followed by IT integration issues
  • Medical device companies will have increased demand for value added services upon delivery and consignment services in the future.
  • Government regulations are becoming a rising burden on the industry calling for increased focus on quality assurance. Operational excellence in the supply chain becomes more important
  • Western Europe and North America are highly saturated markets. Emerging markets in notably Eastern Europe and Asia are expected to provide for continued growth
  • 2 thirds of respondents preferred a 3PL with medical device logistics experience but no knowledge of their company over a 3PL with knowledge of their company in another market but without medical device knowledge on-site
  • 65% of respondents preferred a 3PL with local medical device logistics experience but no experience with the company over a 3PL with experience of their company in another market but without medical device Logistics experience in that country
  • 35% requires a 3PL to have Medical Device logistics experience in a country to be a viable partner; 25% will only consider a 3PL with other medical device clients and experience on-site

1. What do you see as the major logistics hurdles in your supply chain?


There is a clear sentiment that visibility issues and the IT infrastructure that should provide this visibility remains the most significant bottleneck for further optimization of the supply chain. The operational management of day to day logistics remains an important success factor but is posing few strategic challenges.

2. Which new logistics service will become a ‘must have’ for 3PL’s that want to serve your company in the near future?


The main source for differentiation of the medical device supply chain is in the delivery process. Clients are continuously requesting additional services upon delivery of the product including, in-hospital deliveries, repair/return, onsite stock taking etc. The increased competitive pressure in the industry is forcing the manufacturers to comply with these increasingly divers additional services making distribution management a source of competitive advantage.

3. Which external ‘game changers’ do you expect to impact your industry most?


For this question only, the ranking did not match the scaling of the number of replies indicating fewer consensuses among the respondents. Emerging markets were mentioned more often as a force driving change through the supply chain. However, government policy was ranked higher in terms of the impact on the shape of the industry.

4. Do you plan to enter any new markets in the near future?


Against the background of the previous question, the game changing impact of emerging markets was mostly seen coming from Eastern Europe and Asia. Central and South Americas, as well as Middle East Africa remained an important source of new market growth potential but were expected to show more moderate growth in the short term. The US and Western Europe are considered as completely matured and highly saturated markets.

5. When starting up a new logistics operation or replacing a current operation, which 3PL would you prefer?


A. 3PL with local expertise in medical device logistics but without any experience with your company

B. A 3 PL you already work with in another country/region but without medical device experience in the country of the new logistics operation

C. No Answer

6. For a 3PL you are currently working with, what is the minimum level of medical device experience needed in order for that 3PL to run your Warehousing operation in new country/region?


A. Only if they have medical device logistics experience and references in that country

B. Only if they have on-site Medical Device logistics experience and references

C. Only if they have medical device logistics experience and references in that region (neighbouring countries)

E. The fact that you are currently already working with this 3PL is sufficient to qualify them for each country/region

D. No Answer


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