ENSURING SUPPLY
CONTINUITY IN THE MEDICAL DEVICE INDUSTRY
Amid political tensions between China and the West, a procurement manager at a medical device manufacturer was looking for alternative sources of supply for a material critical to maintaining production.
Due to political tensions between China and the West, the Chinese government had announced that it would put restrictions on the export of graphite, a carbon element of high importance for devices in the medical industry, for example, for electrodes used to monitor heart or brain activity. This was causing a major headache for a procurement manager at a medical device manufacturer. Their only known supplier of graphite was located in China so it looked like he would have to find an alternative.
This wasn’t his first time at the races, so he knew he had his work cut out for him. He had previously tried to screen the market for alternatives, using search engines like Google,
supplier directories, and personal networks, but this hadn’t yielded any results – it basically just cost him three weeks of on and off searching. Now he would have to do another search, and coming back empty handed was not an option.
Firstly, having a high risk, single-source supplier in his portfolio would not reflect positively on him in his performance review – the company had made it a priority to de-risk its supply chains relevant to the assembly of top-selling products. Secondly, an increase in prices of the specialized graphite would hurt the profit margin of two of the company’s best-selling products: devices that monitor heart and brain activity. In the worst case, a potential ban on exports imposed by China could bring the entire production line to a halt.
On the upside, finding alternative suppliers would position the responsible procurement manager as a problem solver within the organization and qualify him for a promotion. Moreover, finding alternative sources of supply would help foster supply chain resilience and contribute to securing revenues – which would definitely shed a positive light on the strategic impact of the entire procurement department.
At a company town hall meeting, he had heard that other departments had been successfully using Scoutbee Discovery to identify new suppliers in cases of similar complexity. After securing a license for the tool, he was able to start his case. As a first step, the search form in Scoutbee Discovery, which is specifically designed for procurement needs, helped him translate the complex requirements for this type of graphite into precise keywords to run the search - the product itself, the industry it’s needed for, where the supplier should be located, the certifications required…
Based on the keywords he’d entered, the Scoutbee Discovery algorithm scanned the entire internet to aggregate, process, and enrich data from relevant suppliers of this
specialized type of graphite globally. Unlike traditional search engines that present a list of results based on paid advertisements, Discovery gives impartial results based exclusively on the user’s search criteria. In addition, crawling all available data at the beginning of the search ensured that the most up-to-date data on these suppliers was considered, circumventing the limitations of conversational AI applications like ChatGPT that run on a wide and generic data set. In further contrast to generative AI-driven applications, Scoutbee Discovery’s underlying algorithm is exclusively trained on procurement data, making the results more accurate. While other tools may offer instant results, Scoutbee Discovery ensures that the most up-to-date suppliers and supplier data is considered, which is exactly what the medical device procurement manager was looking for.
After only two days, he was able to review a list of 23 suppliers, with the relevant supplier data from the entire internet aggregated, analyzed, and enriched by the AI-powered algorithm.
Thanks to the underlying technology, these suppliers had been identified as being the most relevant based on the number of keyword matches between the search criteria and the information found on the suppliers. To get a deeper understanding of who those suppliers were, the procurement manager was able to review a profile of each supplier, enriched with data on revenue, employees, and relevant certificates. With this information on hand, he quickly identified 16 suppliers to invite for an RFI.
What had previously taken him three weeks and had produced no results had only taken him two days and resulted in a total number
of 23 suppliers identified. In other words, he had found a new diversified pool of suppliers four times faster than using a manual search. What he really liked about Discovery besides the speed was that “it found suppliers from adjacent industries that we had not previously thought capable of delivering the products we were looking for. In the past, we simply did not have the time to look outside our own field.”
His willingness to try new ways to solve a problem would surely put him in good standing at his next performance review. On a company level, he had demonstrated procurement’s impact on achieving strategic goals, including de-risking the supply chain and ultimately securing revenue streams.
If you’re looking for a way to mitigate risk in your supplier sourcing, get in touch with us today to see how we can help.
