Education and Demonstration Key to CompetitivenessWed, 09/09/2015 - 14:31
Q: How has B. Braun Aesculap adapted its product lines to accommodate for the unique Mexican market?
A: We have chosen to invest in Mexico and we are making great efforts to create dialogue with important players in the sector, such as the Ministry of Health. B. Braun has also joined AMID in an effort to provide a better quality of life to patients. One of the biggest priorities for B. Braun is innovation, which is often rejected as a huge expense. Still, while innovative treatments can initially be more expensive, a thorough analysis of the complete value chain must be implemented to determine total costs, and this has shown that innovative technologies can often be less expensive in the long-term. We are collaborating with stakeholders to change this mindset.
Q: B. Braun initiated a joint venture with Promedici in 1993. What made Aesculap the right partner at the time and how has the partnership evolved over the years?
A: This joint venture began after an alliance with IMSS, which allowed us to produce in Mexico and specified that a certain percentage of our products must be consumed at IMSS institutions. The institute actually became the promoter of the alliance between B. Braun and Promedici since it was interested in increasing the production of medical devices in Mexico. One device that we developed alongside Mexican doctors is a hip replacement, which is called the Logical System of Arthroplasty (SLA). This product was developed for a specific anatomic situation found in Mexicans, as it has been discovered that the population has a slightly thinner femur and hip bone.
Q: After IMSS’ manufacturing requirement was lifted, B. Braun reduced its production in Mexico but kept its plant open. How has your manufacturing strategy in the country evolved over the years?
A: We are currently planning to increase our production capacity and to bring products to Mexico as a result of B. Braun’s strategy to increase its number of production plants in developing countries. Thus, our product portfolio in Mexico must expand, especially in terms of highly innovative products that are currently only available in developed countries due to the possibility of incentivized reimbursement. We are also introducing innovative technologies such as spinal implants that are well established in developed countries. These spinal implants will soon be manufactured at our plant in the State of Mexico as part of a new worldwide system which will see an increase in our production capacity in Tuttlingen, Germany, while several of the production processes will be outsourced to various countries, including Mexico.
Q: As part of this outsourcing process, to what extent do you have to upskill your personnel in Mexico?
A: We do not have highly qualified technicians in Mexico as we either have engineers who are overqualified or production workers who do not have the proper qualifications to operate our machinery. Therefore, we implemented our own five-to-eight-year educational program in the plant. The process is long as employees must become experts in each specific competency before advancing to the next. The problem is that, as employees become more valuable, they also become more attractive to competitors. Several companies are unwilling to invest in the training of their employees as they fear high employee turnaround, which is common in other industries. While this is a risk for us, we believe that our compensation package and social environment will allow us to retain these individuals as they recognize that they have the opportunity to progress with B. Braun.
Q: How are you creating awareness about the new products that you are developing?
A: We are investing heavily in our consultancy services. At this point, 40% of our sales are surgical instruments as well as endoscopic and hemodialysis systems. We are also attempting to overcome the common difficulties faced by producers in participating directly in consolidated sales. Very few companies in Mexico are able to deliver to such a wide spread of locations within 24 hours, so we must determine a way to keep prices competitive while reaching our clients on time, which has led to us handling about 50% of our sales directly and 50% through distributors. This is slightly unusual for most international companies that depend on distributors, but we like to work directly with many clients as distributors are concerned with products and do not offer consultancy services.