FedEx eyes growing mainland medical equipment market

PUBLISHED : Tuesday, 15 February, 2011, 12:00am
UPDATED : Tuesday, 15 February, 2011, 12:00am

China's fast growing medical equipment and supplies market is among the targets for FedEx as it grows its supply chain logistics business in Asia.

Craig Simon, the president of FedEx Supply Chain Systems, said the company was also aiming its services at semiconductor, electronics, telecommunications and industrial equipment manufacturers.

The supply chain systems business provides inventory storage and rapid delivery of high-value or critical components for manufacturers or businesses which need to guarantee delivery of replacement parts to their customers.

Simon said while the opportunities for FedEx 'are mimicking' those for businesses in all these sectors, 'medical equipment and devices are growing faster than the other industries'.

Forecasts from the China Association for Medical Devices Industry said the mainland's medical equipment market was worth US$17.5 billion last year - the third largest in the world. Sales of high-end medical equipment in the country were growing at up to 30 per cent per year.

By comparison, the global medical equipment sector was valued at US$280 billion in 2009 and forecast to grow 8 per cent a year to more than US$490 billion in 2016.

Simon said the supply chain division offered time definite delivery ranging from less than two hours to four hours or next day depending on the service selected by FedEx customers, who could place orders and track inventory levels electronically.

The five sectors targeted by FedEx with its supply chain division were industries where there was more of an urgent requirement to replace used and broken parts or consumables. The automotive sector had not been highlighted because time sensitivity was not so crucial.

So while there could be an urgent need to deliver a replacement component to a factory to get an industrial robot back into production, the dispatch of car parts to a garage was not as critical.

In China, Simon said the two and four-hour targets were met by having multiple distribution centres in key mainland cities such as Shanghai, Beijing and Guangzhou.

Components or consumables sent from these centres could be replenished from larger stocks held elsewhere in Asia such as Singapore. Simon added that the sophistication of supply chain services in these major Chinese cities was equal to Europe or the United States.