The Cost of Overstock: How Medical Device Companies Can Unlock Revenue with Smarter Inventory Management

Medical device companies face a silent profit killer: overstock. With inventory often exceeding a year’s worth of supply, manufacturers are tying up cash, risking product obsolescence, and driving up storage costs. The root cause? Lack of real-time visibility and accurate forecasting.

Overstock is more than just an inconvenience, it’s a strategic barrier to growth. Medical device companies need to carry enough stock to meet unpredictable demand, but too often, this results in stagnant inventory that ties up capital. According to McKinsey, many MedTech firms carry inventory levels that are more than double the average of other industries. That’s an enormous amount of value locked away in warehouses and trunk stock.

An effective inventory management system (IMS), like WA360, provides medical device companies with a smarter, tech-driven approach to inventory optimization. By integrating Bluetooth-enabled hardware, cloud-based software, and real-time data analytics, WA360 enables companies to know exactly what they have, where it is, and how it’s being used.

The impact of this visibility is enormous. For example, when sales representatives can automatically track inventory consumption using WA360, replenishment becomes proactive rather than reactive. Inventory levels align more closely with actual demand, which helps reduce excess stock and minimize expiration risk.

One of the biggest financial impacts of overstock is the opportunity cost of trapped capital. That money could be reinvested in product development, marketing, or hiring. Instead, it’s sitting on shelves. Moreover, there’s the added cost of warehousing, security, insurance, and staff time to manage overstocked inventory.

A compelling case study featured in the “Raising ROI” white paper details how one distributor using WA360 implemented a fixed-time period model to track product usage more accurately. This allowed the company to forecast demand more reliably and resulted in a 63% reduction in overstock which translated to over $700,000 in annual savings. That kind of ROI has ripple effects across the entire organization.

Another powerful metric for measuring inventory inefficiency is Days-on-Hand (DOH), which tracks how long inventory sits before being used. The average DOH in MedTech is over 160 days, nearly double the average across other sectors. By reducing DOH, companies can shorten billing cycles, speed up cash conversion, and increase financial agility.

With WA360, MedTech companies gain:

• Real-time inventory visibility across all stocking points
• Predictive analytics for demand forecasting
• Bluetooth tracking for accurate consumption data
• Centralized dashboards for proactive replenishment

Optimizing inventory is about cutting costs while unlocking growth. Companies that master inventory balance can reinvest freed-up capital into innovation, reduce risks from expiration, and improve customer satisfaction by always having the right product available at the right time.

Ultimately, smarter inventory management is the cornerstone of financial performance in the medical device industry. WA360 gives medical device companies the tools they need to transform supply chains from a cost center into a revenue enabler.