MedTech manufacturers are taking a page from automotive. Here’s why now is the moment.
Walk through an automotive assembly plant, and you'll see a masterclass in precision. Automated lines, zero-waste workflows, every component arriving exactly when needed. Decades of lean manufacturing, Kanban systems, and relentless cost discipline have turned automotive production into one of the most efficient industrial operations on the planet.
Walk through a leading medical device manufacturer's facility, and you'll find a different kind of excellence, one built around patient safety, regulatory precision, and quality at every stage. These are environments shaped by some of the most stringent compliance requirements in any industry. The skilled professionals who work within them, and the standards they uphold, represent one of the sector's genuine points of pride.
However, these operational differences are beginning to narrow. Across MedTech, advances in technology, automation, and AI are accelerating the shift toward greater operational efficiency and scale. What's shifting is not the quality of that work, but the commercial context surrounding it.
For much of its history, MedTech operated in conditions that rightly prioritised innovation and compliance above operational efficiency. Strong product pipelines drove growth. Premium margins provided headroom. And in a world of rigorous oversight from bodies like the Medicines and Healthcare products Regulatory Agency (MHRA), a measured, consistent approach to operational change wasn't complacency. It was sound governance.
Going forwards, operational excellence will no longer be a choice. It will become the foundation on which the industry’s next generation of innovation and growth will depend.
The margin squeeze that's changing everything
The MedTech industry built its business model around a simple premise: design something innovative, price it at a premium, and the market will pay. For years, that worked. But the rate of genuine product innovation has slowed significantly.
At the same time, the traditional M&A strategy that many MedTech companies used to fuel growth is running into diminishing returns. That means companies are being forced to look inward, examining their operations, supply chains, and manufacturing costs, to generate the capital needed to invest in genuine next-generation innovation.
This is exactly the moment the automotive industry faced decades ago. When automotive OEMs fixed the price of the car first and then demanded that every component supplier design to meet that cost, it transformed the entire manufacturing ecosystem. Tier-one suppliers operating on single-digit margins had no choice but to eliminate waste, optimise processes, and rethink how they built things. MedTech is now entering its own version of that reckoning.
From "design at any cost" to "design to cost"
The shift seen with clients is a fundamental reorientation in how MedTech companies think about their operational model. For the first time, many are seriously examining their inventory levels and discovering, often to their surprise, just how much cost is tied up in stock they can't see, can't locate, and can't optimise.
Take inbound logistics. In some of the organisations we work with, raw materials are distributed across multiple manufacturing sites with no consolidated visibility. One facility might be sitting on excess stock of a particular component while another is running short. There's no single source of truth. Nobody quite knows what's been procured, where it's sitting, or what's being consumed. The result is both capital inefficiency and supply chain fragility, a dangerous combination when pricing pressure is already squeezing margins.
Similarly, finished goods inventory is often poorly tracked in the field. Companies are carrying costs they can't quantify, on stock they can't fully account for. These are not exotic problems. They're fundamentals that automotive and consumer goods manufacturers solved years ago with demand forecasting, inventory planning, and supply chain visibility tools.
Now, MedTech is catching up. Lean methodologies, Kanban-style production workflows, proper inventory planning – these aren't new ideas. What's new is that MedTech companies are finally adopting them. In that sense, the "automotive-ification" of MedTech isn't a metaphor. It's a description of what's actually happening on the ground.
Where AI is delivering real returns right now
Technology investment, particularly in AI, is accelerating this transformation. But it's worth being precise about where the impact is most tangible today, because not all AI applications are equal.
The clearest near-term ROI isn't in connected devices or clinical AI – impressive as those developments are. It's in operational and functional processes. Complaints management is a compelling example.
In the medical device industry, complaint handling is a heavily regulated function. When a device malfunctions in the field, manufacturers are required to record it, triage it, investigate causality, and report it to regulatory bodies – often across multiple countries, each with their own requirements. The result, in many organisations, is armies of people manually processing intake calls and emails, filling out forms, and managing handoffs across teams. It's labour-intensive, inconsistent, and creates real compliance risk.
Agentic AI (coordinated networks of specialised AI agents) can transform this entirely. AI can unify intake across voice, email, and other channels; extract and structure complaint data; support classification and escalation decisions; accelerate evidence gathering; and automate documentation while maintaining full audit trails. The productivity gains are measurable and significant: complaint handling throughput can increase by up to three times more complaints handled per FTE per year, while improving on-time closure rates and audit readiness.
This matters for two reasons. First, it frees up highly skilled people to focus on higher-judgement work. Second, and perhaps more importantly, it generates cash. Operational efficiency in functions like complaints management, supply chain, and manufacturing isn't just about cost reduction – it's about freeing up capital to invest in the innovation that will define the next generation of MedTech.
The operational backbone is the competitive differentiator
There's a temptation in this industry to focus almost exclusively on what's exciting – connected devices, surgical robotics, digital therapeutics, personalised medicine. And those innovations matter enormously. But companies that don't simultaneously modernise their operational backbone will find themselves unable to fund the R&D those innovations require, unable to scale efficiently when they do bring new products to market, and increasingly exposed as competitors who have made that investment pull ahead.
The automotive industry learned this lesson the hard way. MedTech doesn't have to. The tools, the methodologies, and the AI capabilities to drive this transformation exist today. The question is whether companies will move with the urgency the moment demands.
About the author
Rajesh Kumaran is VP & business unit head, life sciences & healthcare, at TCS. He is responsible for managing and growing TCS’ life sciences, healthcare and MedTech business. Kumaran has been with TCS for over 29 years and has been leading relationships with customers based in the US. He holds a BSc degree in Computer Technology from Mumbai University and has completed the executive leadership programme from Ross Business School, University of Michigan.
