1. How MedTech Companies Can Create Value Through Smarter Inventory Optimization Innovation in MedTech depends on one fundamental resource: cash. It fuels R&D, enables companies to adopt emerging technologies, and accelerates the development of life-changing products. Yet across the industry, a substantial amount of capital remains locked inside one of the least efficient areas of operations — excess inventory. Many MedTech companies hold nearly three times more inventory than sectors like consumer electronics or CPG. This outdated buffer-heavy approach creates unnecessary warehousing costs, inflated working capital needs, and a higher risk of write-offs. In today’s capital-tight environment, optimizing inventory has become not just an operational improvement, but a strategic imperative. As product design and engineering studios like INDQ see firsthand while working with MedTech innovators, inventory inefficiencies silently delay new product cycles, reduce investment in R&D, and increase the cost of care. Transforming inventory practices can therefore unlock real value by freeing cash, improving responsiveness, and strengthening product availability.

2. Why MedTech Holds So Much Inventory Historically, MedTech organizations relied on deep buffers to avoid stockouts, especially for critical devices. Acquisitions added more sites and more layers of safety stock, creating “buffers on top of buffers.” One leading MedTech company struggled with production planning simply because it lacked visibility into inventory consigned to hospitals — a scenario that is still common across the industry. Limited visibility leads to shortages of high-demand SKUs and overproduction of low-use items. As INDQ often observes during design and pre-compliance engagements, many products also carry built-in inefficiencies originating from the development stage itself — including rarely used components, outdated set configurations, and poor SKU rationalization. ⚙ Operational Improvements That Unlock Value To rightsize inventory, MedTechs must strengthen three core operational capabilities: 1. Accurate SKU-Level Demand Planning Planning at a global level hides real forecasting errors at the SKU level. A granular approach — often enhanced by AI-based forecasting tools — provides better visibility for finished goods and raw materials. INDQ teams frequently incorporate such forecasting considerations during product lifecycle planning and early-stage design. 2. End-to-End Inventory Visibility Many companies still lack a clear picture of inventory across manufacturing sites, warehouses, and hospitals. Siloed systems and customer-specific earmarking fuel overordering. Consolidated upstream buffers with clear cost ownership can significantly reduce hidden excess. 3. Precise Manufacturing Mix Incentives Plants typically optimize for volume, not mix. This causes shortages of some SKUs and surplus of others. Aligning incentives with the required product mix ensures that production reflects true market needs. ? Structural Improvements With Long-Term Impact Operational fixes alone aren’t enough. Inventory optimization should be embedded within product development, consignment models, and supply chain network design. 1. Smarter Product Development Standard sets often include sizes or components rarely used, creating years of surplus. Studios like INDQ, which design medical device configurations and accessories, help clients rethink such setups early, reducing future obsolescence.

3. 2. Flexible Consignment Models Traditional consignment inflates inventory. For predictable surgeries, centralized inventory with rapid fulfillment is more efficient. 3. Optimized Supply Chain Networks Acquisitions create fragmented networks that increase total inventory. Rationalizing nodes and centralizing safety stock boosts efficiency while maintaining service levels. ? Maximizing Value from Planning Systems Many MedTechs already have APS (Advanced Planning Systems) but fail to extract value because: • Data hygiene is poor • System designs don’t reflect real operations • Stakeholders don’t fully adopt the process When engineering and supply chain teams collaborate — a practice INDQ strongly encourages during product lifecycle planning — planning systems can finally deliver the accuracy they were built for. A dedicated cross-functional governance team should regularly review inventory performance, set targets, and ensure accountability across functions. The Bottom Line By improving operational rigor, refining structural decisions, and aligning teams around modern planning systems, MedTech companies can unlock 10–30% of inventory value. For innovators, this freed cash becomes a catalyst: • More R&D investment • Faster prototyping cycles • Stronger market responsiveness • Better patient outcomes As MedTech moves toward intelligent, connected, and AI-driven products, studios like INDQ continue to support organizations in designing devices, planning product lifecycles, and building systems that minimize waste and maximize value — from concept all the way to commercialization. INDQ Contact Details INDQ Product Design & Engineering Studio Visakhapatnam, India Email: contact@indq.in Website: www.indq.in (Credits: Adapted from the work of Arnav Dey and Mohammad Behnam, with Priyank Sood and Siddarth Chinnareddy.)