How to Scale Your Diagnostic Test Kit Business: Supply Chain
6/6/2022 John Bradley
Home diagnostics play a critical role in improving a clinician’s ability to provide faster and better-targeted care. They also give the patient a more accessible and personalized approach to managing their own individual healthcare. But you already knew that.
Here’s something you may not know: For diagnostic test manufacturers in search of increased testing awareness and scalable activation, this is no time to go it alone. Multiple stakeholders, bottlenecks in kitting, fulfillment delays, and manual tracking pose significant barriers to driving adoption for testing programs.
Is your diagnostic testing program positioned to scale — effectively?
Success will require a smart mix of dedicated business partners to effectively navigate and accelerate a complex product like yours.
We’ve charted this course and know what’s critical in bringing this to fruition. To gain a clearer understanding of what’s required to accelerate your program for greater awareness and adoption, we split our insight into two parts: supply chain (i.e., assembly and fulfillment) and communications strategy.
Let’s start with your supply chain. (Unless you're more focused on honing your communications strategy, then head here.)
6 keys to optimized diagnostic test kit assembly and fulfillment
Your ability to support the development and launch of diagnostic test kits across all of your unique audiences will be pushed to its limits. Ideally, creative execution, packaging, overall production, and kitting operations should complement your test kit launch’s contact strategy.
To mitigate risk and navigate challenging implementations, consider the following components as mission critical to a supply chain without disruption in quality, service or continuity of test kit supply. Here are our six keys to a successful launch:
1. Strategically located facilities
An established and experienced selection of strategically located kitting and fulfillment facilities is key to building a sustainable supply chain solution that balances a variety of economic and service level parameters including:
- Infrastructure costs
- Local labor pool availability
- Labor cost
- Inbound/Outbound transit times
- Speed of deployment
- Inventory distribution
2. National program management
A national supply chain approach should incorporate a combination of multiple aligned account teams interfacing with the various stakeholders — all of whom should report into a single program management office. You might also hear this called the “control tower” approach.
To ensure program deliverables and objectives are cohesively achieved, activities must be managed holistically and communicated collectively. The program management office should be trusted to provide seamless control, exceed service levels expectations, and offer transparency across all supply chain activities.
3. Supply base management
A core enterprise resource planning (ERP) system provides enhanced planning and procurement capabilities to provide effective materials management in a complex environment.
For example, RRD leverages its ERP system, which is a fully integrated software suite that incorporates the management of inventory, product planning, product data management, procurement, logistics integration and fulfillment.
The utilization of demand planning tools will assist with a more effective forecasting and inventory planning process, allowing you to more intelligently position materials and inventory to ensure continuity of supply. It can also effectively manage directed purchases, sourced items or materials manufactured in-house.
4. Fulfillment logistics
A number of variables play into the efficiency of your distribution efforts: your footprint (both in-house and possibly a qualified third party), advanced systems, feasibility to manage high program volumes, capacity around automated routing and sorting, etc.
A single at-home test kit, an LTL shipment to a specific grade school, FTL shipments to an entire district — managing all outbound logistics with flexibility alongside real-time track and trace are key to delivering expedited or standard shipping to the audiences in scope.
5. Quality management systems
Each facility playing a part of this initiative must encompass their own independent quality management system. This will most likely include maintaining various accreditations including ISO 9001:2015, ISO 13485:2016 and 21 CFR 820.
For those sites specifically supporting this program’s kitting and distribution activities, cGMP certification is a minimum requirement to remain in conformance with EUA directive associated with these products. Sites that handle direct-to-consumer should be ISO 13485:2016, 21 CFR 820 compliant and have been certified to SOC/SCO2+ as this element of the program contains PHI.
At risk of getting in the weeds, we’ll stop here. However, if you’d like to hear more about quality management and additional areas that play into it — lot integrity, inventory management, validation protocols, HIPAA — just connect with one of our experts. They’ll be happy to take you on a deeper dive.
6. IT systems
A centralized IT system will enable a wide range of (frequent) data exchange/extract methods, exchange platforms, formats, and protocols to meet the needs for integration and access to data. This centralization will not only benefit all communications and support all outlined facilities, but activate data centers with full disaster recovery and high availability.
It’s also worth mentioning just how valuable a tool a web-based system can be for supply chain reporting, collaboration and web based access to enterprise systems that allow real-time data access for both internal and external supply-chain activities, e.g., visibility into material receipts, production work orders, material purchase orders, inventory status and shipments.
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John Bradley is the Director of Solutions Development for RRD Life Sciences.