Dieter Meyer: Reaching Full Potential in Medtech Services

Bain Partner Dieter Meyer discusses how medical device manufacturers can address common service issues through a line-led approach.


Dieter Meyer: Reaching Full Potential in Medtech Services

Many medtech companies are running their service organizations below full potential. Dieter Meyer, a partner with Bain's Healthcare practice, breaks down the key steps for these companies to increase the productivity of their service organizations, improve customer satisfaction and boost financial performance.

Read the transcript below.

DIETER MEYER: In the medical equipment industry, service quality greatly affects customer satisfaction and purchase decisions, yet many medtech companies run their service organizations below their full potential against the backdrop of ever-increasing customer expectations and intensifying competition.

As a matter of fact, many medtech companies run ongoing service productivity programs, but experience shows that only few achieve true full potential of these programs. This is because accountability for service operations is typically dispersed across the entire organization. Plus, service operations are inherently complex, with many factors in the organizations and people contributing to it.

And improving service productivity also requires the front line, typically, to change, which is difficult to achieve. In our experience, medtech companies can increase the productivity of their service organizations if they follow a couple of key steps. In order to address the accountability issue, top-down service targets must be defined by using a combination of internal and external benchmarks.

The external part is actually really important because true best-in-class performance can often be found outside of the medtech industry. In order to locate where the real issue is in a given service organization, we recommend service managers to use what we call "a service value driver tree," which systematically links the operation levers with the P&L.

It is also important that service issues are tackled where the activity and cost ownership is located. Hence, service productivity programs should be always set up in a line-led and line-owned fashion. We recommend setting up local service excellence factories because they provide a standardized approach how to identify issues in given market organizations, develop solutions and implement them ultimately.

By systematically focusing on service issues through a line-led, market-by-market local service excellence factory approach, medtech companies cannot only improve customer satisfaction but also financial performance.

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