Automating The Orthopedic Supply Chain

INTRODUCTION

What if you knew that every order you shipped would be returned? What if you knew that for every item actually used by your customer, you would have to ship thirty, forty, fifty…a hundred or more “spares?” What if you knew that all of these leftover items would be returned to you on a daily basis, and usually, not nearly in as organized a box as the neatly packed one which left your distribution center days before? What if you faced packing, shipping, and receiving thousands of such orders on a weekly basis? What if this was this your business model and your supply chain – and one that literally had life or death consequences? Welcome to the unique world of the orthopedic implant industry – a business that is growing by leaps and bounds today.

THE BOOMING JOINT INDUSTRY

With the aging of the Baby Boomer population and the push for the “active senior” lifestyle, accompanied by refinements in orthopedic surgery techniques, including computer-assisted surgery, we have seen dramatically rising rates of hip and knee joint replacements over the past decade. In the U.S., data from the National Center for Health Statistics show that there has been a dramatic rise in the number of both hip and knee replacement operations over the most recent seven year period for which data is available (1997-2004) (see Tables 1 & 2 below). And this is not just an American phenomenon, In Canada, according to the most recent data available from the Canadian Joint Replacement Registry (CJRR), there has also been a phenomenal increase in the number of hip and knee replacements in recent years. Similarly, significant utilization increases have been noted across both Europe and Asia.

Table 1 – Annual Hip Replacements in the United States, 1997 and 2004

Table 2 – Annual Knee Replacements in the United States,

1997 and 2004

Beyond age, three other factors have also helped accelerate the trends toward joint replacement. The growing obesity problem has caused more people to seek out leg joint replacement earlier and earlier in life, as heavier body masses place more stress and cause more wear on hips and knees. Also, the growing concerns over long-term effects of taking pain medications and Cox-2 inhibitors have led more patients -and their doctors – to turn earlier to non-pharmacological options for long-term pain relief, even before such conditions turn chronic, especially as success rates for such procedures improve. Finally, one can not discount the impact of the ever-increasing amount of direct-to-consumer focused advertising for such procedures, as joint implant manufacturers seek to promote healthier lifestyles (exemplified by golf champion Jack Nicklaus promoting Stryker hip implants after he himself underwent a replacement procedure. As Dr. Paul Lachiewicz, MD, a Professor of Orthopedics at the University of North Carolina put it bluntly, in today’s environment: “People don’t want to take medications. They want it fixed.”