The first step is to define the base purpose for the purchase. Every product has a basic underlying goal. For example, I purchase a car to get me from point A to point B. Yes, I am glad it’s red but red is not my reason for purchase – color does not necessitate a change.
A hospital purchases a nurse call system to notify a caregiver of a patient need. This can be fulfilled with ANY nurse call. The basic ability to light a light and tone a tone are the requirements for the nurse call system to meet code. The same is true for every medical device. They each have a basic function that has to be fulfilled. Features are provided to reduce the ability for the product to become commoditized.
The reason we need to appreciate basic functionality is to start to build on the decision points/ timelines. The first is Product Life. Just like your car, a piece of medical equipment cannot live forever, as the product ages the cost of ownership increases. Generally, the product life of a medical device is 10-12 years. This doesn’t mean it will suddenly stop working (though on occasion this may occur) quite simply put the older it is the more costly it is. Eventually, replacement parts will become more and more scarce, and ware and tare will take its toll. This is why for product life decisions items like Mean Time before Failure, Maintenance Costs, and availability of service providers becomes the basis.
Making a matrix of decision points on Product Life is a good way to assess competition. All products within a category should meet the base goal, but utilizing a scoring method to assess mean time before failure, maintenance cost, serviceability, and availability of support can solve half of the equation.
However, if driving from point A to point B were the only criteria that mattered then everyone would drive the least expensive highest miles per gallon car. The fact is that billions of dollars are made each year in the auto industry by creating vehicles to meet the specific goals and desires of drivers. Taking otherwise frivolous items such as navigation systems, built in DVD players, and (dare I say it as a frivolity) power windows and pairing them against the competition as necessities. Driving up costs and changing the spectrum of competition.
Leading to the next Decision Point: Technology Life
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