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Innovating Obsolescence: When the Supply Chain Is Around Your Throat

Obsolescence can pose a grave threat to individuals, economies, and..

Innovating Obsolescence: When the Supply Chain Is Around Your Throat

Innovating Obsolescence: When the Supply Chain Is Around Your Throat

Obsolescence can pose a grave threat to individuals, economies, and nations. Security and defense receive a great deal of attention in our Critical Thoughts section, partly because they are domains in which obsolescence is highly visible and easily conceived. In fact, the defense industry has its own acronym, that specifically outlines the necessary steps to avoid problems caused by counterfeit and obsolescence.

The medical industry can be a loaded topic for a variety of reasons and, unsurprisingly, obsolescence within the health tech field can be equally touchy. Obsolescence in medical technology forces us to take a critical look at some of the equipment we use every day to help millions of people around the globe—equipment we’d much rather assume was cutting edge and in tip-top shape. Like defense systems, the embedded electronic systems in the health field save lives, keep people healthy and able to work, and ultimately contribute to the stability of loved ones and nations around the world.

Both defense and health are fields that rely heavily upon relationships of trust: warfighters have to trust that the equipment with which they have been provided has been manufactured to high standards, and health care providers need to trust that the equipment they are using is the best equipment available to save lives. Customers trust that any pharmaceuticals or high-energy scanners are counterfeit free and have been manufactured for safe use. In both fields, when equipment fails to live up to that trust, people can die.

The fact that it can be disastrous when medical equipment fails is nothing new. What we don’t stop to consider is a perceived failure of that trust. When trust breaks down between customers and manufacturers, neither can achieve the goal—to help people. And one of the topics most likely to arouse suspicion between manufacturers and customers is that of obsolescence.

It seems unlikely that anyone would disagree that technology used to save endangered lives should always be held to the highest standards of manufacturing and functional excellence. In fact, life-saving equipment must go through rigorous testing just to ensure those high standards. In the United States alone, there are over 1.5 million sufferers of type 1 diabetes, a potentially fatal condition that requires sufferers to administer frequent doses of insulin daily. Type 2 diabetes, more prevalent but more easily controllable, requires similar treatment. Both treatment patterns depend on the use of chemical testing devices, real-time monitoring equipment, and drug administration gear. To benefit the large numbers of people whose lives depend on this equipment, everything must be compatible. An implied promise exists between the diabetic and the manufacturer that equipment will be functional and dependable and will not be used to exploit the customer’s literal dependence. One would think it would be a slam-dunk relationship.

Unfortunately, such is not always the case. Many users of electronic diabetes treatment kits, including doctors (who are themselves receiving treatment or have family members who are), have the growing fear that manufacturers have been needlessly “updating” treatment equipment with trivial or superficial features that do not enhance the core functionality of the devices at all, but do increase cost.

These updates are perceived to be happening in parallel with a growing proprietization of treatment accessories (test strips, patented insulin formulas, etc.). Whether real concerns or not, trust is breaking down on the side of patients experiencing an increase in the overall price of the treatment. In addition, quick-cycling releases move older and less expensive models toward obsolescence. The reality of the situation aside, the perception of unnecessary upgrade pressure damages trust, which in turn ultimately causes problems for the supply chain. Customers who do business with someone because they have to are a far cry from loyal customers and fans. Once customers feel that their lives are impacted by this breakdown of trust, it can become the beginning of the end, and they will certainly be keeping a wide eye open for any alternate possibilities. At the best, there is only brand management to address—but at the worst, this can lead to customers choosing inferior, counterfeit, or refurbished products in a dangerous state of disrepair.

If this perception issue exists within a life-critical realm such as medical technology, it is not difficult to imagine customers developing the perception that manufacturers are forcing unnecessary upgrades with trivial updates in less consequence-heavy industries. A healthy supply chain requires trust and communication to ultimately benefit all sides. Once both manufacturers and customers develop a mutual understanding of a product, including an understanding of the need for necessary improvements, a real shared understanding can build not only reliable customers, but also fans for the lifetime of an entire generation of products.

 


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