Value, product delivery strategies and operational performance in the medical technology industry

Abstract

Healthcare systems face increasing demand and expectations due to globally aging populations and new technologies which will increase the demand for medical technology products. The ‘value’ of health technologies is based upon health technology assessment rather than customer perceptions. This research contributes to product delivery strategy and mass customization theory and contributes to practice by explaining how the proposed conceptual framework could enhance the value proposition of medical technology products, improving company performance and competitiveness. This paper used a 13-month, longitudinal, participative Action Research strategy to understand and improve the performance of a German medical technology company that manufactures prostheses with varying levels of customization. The conceptual framework was successfully applied in the case organization. It provided a structure for product segmentation which grouped products according to their value propositions which reflected different trade-offs in terms of health technology assessment (HTA). Appropriate delivery strategies were then determined for each group. This research demonstrated that product delivery strategies based upon postponement improved productivity and delivery performance, whilst reducing inventory and enhancing value.