Quality, Cost, Delivery

A common framework for management, particularly from manufacturing businesses, is the quality, cost, delivery triangle. It highlights the interdependence and trade offs of these factors, and the need to choose a priority.

I can see how manufacturers of low risk, simple goods could favour cost over anything else - margin is more important than anything else. The customer can tolerate some late deliveries, and sometimes having to exchange a faulty item. This might be particularly applicable for a cost leadership strategy, where  costs needs to be tightly controlled to preserve a thin margin on high volumes.

If the customer isn’t too price sensitive, and can tolerate some quality issues, then delivery can be the highest priority. Though, if delivery is so critical, I’m not sure delivery of a faulty item would meet the customers expectations. Food delivery services (Deliveroo, UberEats etc) are the only example I can think of, when I’d accept an item that is on time, costs a bit more, and my Coke Zero is missing.

But what about medtech? Whilst we experience the delivery pressures as much as any other industry - indeed sometimes we face immense pressure to deliver devices to patients and healthcare providers - Can we ever put cost and delivery above quality? Our quality manuals would say no. ISO 14971 (risk management for medical devices) says no - risks must be reduced as far as possible, and cost is not a reason to stop. Ultimately, our commitment to patient safety means that we cannot compromise quality.

However, we also cannot compromise cost. Why? Well occasionally you might be able to afford a loss-leader as part of a wider portfolio, or strategically price a product lower to win a wider contract. But without cost control, you do not have a prosperous business.

What’s the point of this column? To highlight that medtech is a tough industry, in which you can’t make the same compromises as other industries. The business needs to make profit, the devices need to reach hospitals, but most of all - they must ALWAYS be safe.