Anatomy of a Growing Medical Equipment Distributor


“Demand for medical equipment depends on the number of people receiving medical treatment,” says Mark Fleming, Managing Director and CEO of Fleming Medical. “The demand is growing and we are preparing to meet it in Ireland, Northern Ireland and other countries nearby. And with a fully functional e-commerce solution we will soon be open 24/7 far beyond our borders.”
Fleming notes with pride that his company is well known for being able to provide faster customer response time than larger companies can, and it’s important to protect that reputation as they grow.

According the Espicom Business Intelligence Ltd Report: Medical Market Futures to 2011, “The medical device and equipment market will be worth US$246 billion by 2011.” The report also says, “The US$ value market will continue to be led by the USA, Europe and Japan where demand will be high and economies strong. This is particularly true for high tech equipment. However, highest percentage growth will be found in the emerging markets of Eastern Europe, Latin America and Asia where demand for essential medical equipment and supplies will be significant.” This is good news for Fleming as it grows its ability to reach beyond its own borders.

Treating for “fix-me-itis”

With all this opportunity on the horizon, Fleming Medical faced some major surgery. They had outgrown the legacy business applications that had once served them well, and a sticky plaster/adhesive bandage approach wouldn’t make them better. For starters, their accounting system vendor offered no upgrade path, and in fact had stopped updating its product. Even if it did, however, Fleming wanted a solution that would fully integrate finance, inventory, production, purchasing, and sales. They also envisioned more granularity in managing the sales cycle with functionality such as pipeline analysis, territory management, e-mail marketing via Microsoft Outlook, contact management, sales opportunities management, and sales activities management.
And as a member of the EU, Ireland is bound by EU laws regarding the regulation of medical equipment and supplies, so the ability to meet batch and serial number compliance requirements was high on the list. Because they now sell equipment such as defibrillators, they also need to be able to track service level agreements.
Fleming says, “We knew we were in for a makeover. It was time to look for a comprehensive, integrated solution that could meet our needs now and into the future.” He and his team did a scoping project and benchmarked various vendors against their requirements.
At the end of 2004, when they first started looking, the team didn’t even consider SAP. They perceived that solutions from SAP were just for big companies. But when a mailing from SAP landed on their doorstep and a sales person followed up, Fleming was intrigued. He went to a demonstration and saw that there were others there who represented companies of comparable size. SAP Business One was in the running. And in the end, it won out over the others.

The pleasure of vibrant health

It’s no secret that when we feel well we can perform well. It’s true for businesses, too. Because it provides a single view of the entire operation, SAP Business One helps the Fleming team keep their fingers on the pulse of the enterprise to ensure optimal performance. Fleming says, “Irish International Sales, our local SAP distributor, helped us immensely. We appreciate access to critical, up-to-the minute information that we need to make smart business decisions. For instance, the system sends alerts in various categories, such as below margin, out of stock, credit, and incoming orders. And we can track which accounts are under performing and which products are not as profitable.” He notes that this was a laborious exercise at best in the past, and today it’s easy and it helps them make and keep their delivery commitments.
Now the Fleming team has access to a dashboard in the customer master record that provides an overview of the account balance, outstanding orders, and deliveries, as well as opportunities in the pipeline. “One of the things we really like is that we can choose a graphical presentation of a sales analysis report showing revenue and profit for a particular customer. We can do formatted searches and generate ad-hoc reports to know in real-time where we are in the business now. In the past this just wasn’t at all possible.” These capabilities give Fleming management snapshots of key performance indicators such as sales bookings, year-to-date revenue, accounts receivable and open orders. And it helps them match customers to available stock to generate more business and improve overall margins.
Fleming states that their new level of visibility into overall stock availability enabled an increase in sales velocity. Because they now can manage stock levels closely and forecast trends, they can confidently take an order and ship to a customer within 24 hours now, which few Fortune 500 companies in the medical equipment business can do.

Tablet access for sales staff

In addition, just after Christmas of 2006 Fleming Medical rolled handheld tablet PCs out to field sale people. Now they can manage all activities, orders, opportunities, quotes, and service calls from their tablet access to the web and synchronize necessary information to and from SAP Business One. Sales are reflected directly into accounting, inventory, and shipping records. Fleming says, “Because we can better recognize our customers’ needs, our sales people can act as consultants to their accounts, making specific product recommendations and suggesting quantities based on historic buying patterns. This has helped us to increase revenue per customer and to reduce customer turnover.”
As an aside, Fleming notes that sales people appreciate the ability to track their activity targets to see how they are doing. “And they like getting their bonuses faster, too,” he says.
Since the SAP Business One solution went live in May of 2005 sales volumes are up approximately 30 percent and the order value has increased approximately 25 percent. In addition, days outstanding for collectables have decreased from ninety days to sixty days.
The Fleming team will leverage additional functionality in Business One for marketing campaign management and prospecting. Fleming says they also will be looking at Radio Beacon for SAP Business One, an integrated warehouse management application.
Fleming concludes, “With such robust health and our new Internet window to the world, we’re set to beat the Fortune 500 companies at their own game.”

Christine Macfarlane
Christine Macfarlane