Formalized in 2002, Medrad Incs multivendor service (MVS) business unit services and supports magnetic resonance (MR) coils and ultrasound probes from a variety of original equipment manufacturers. Headquartered in Pittsburgh, Penn, and employing more than 1,100 people, Medrad is a worldwide provider of a variety of medical devices including a comprehensive line of vascular injection systems and MR surface coils and accessory products. The companys total 2002 revenues were $254 million. Medrad is a US affiliate of Schering AG, Germany. 24X7 recently spoke with Anthony Cinalli, executive director of MVS at Medrad, about how the new unit has benefited the company and its customers, and what it means for the future of Medrad.
24×7: Why did Medrad decide to get into the multivendor service market, and how significant was that decision?
Anthony Cinalli: We started with the [MR] coils in the 1990s and proved that we could set up an infrastructure to run a depot-based repair business in a high-quality, efficient manner. Once we realized that ultrasound transducers had various similarities to coils, at least in packaging and in the cosmetic features such as cables, strain reliefs, and plastic housings, we decided to evolve [the service] into handling ultrasound transducers. One of the nice things about being in a company like Medrad, which is a market leader in vascular injection, is that we have relationships in every acute care facility that exists, so we were able to leverage those relationships to move into diverse areas like ultrasound probes. We invested a good deal of time, energy, and money into developing our capabilities in providing that service, and today we have a large inhouse repair facility here in Pittsburgh that provides the service for the ultrasound transducers.
24×7: What are the services that the MVS provides?
Cinalli: The easiest way [to explain the MVS services] is to walk you through a typical transaction. Its important to understand that we target two different product lines. In the MR suite we target the MR coils, and in ultrasound we target transducers or probes. If a site has a service event, such that a coil or probe is down for some reason, the customer calls into our facility or talks with one of our sales coordinators and describes the problem. Based on the situation and on how critical time is to the customer, we might offer them a loaner. They then send their product in to us, and we perform a through evaluation. Whether its a coil or a probe, there are four or five different steps that we run through during a typical evaluation, beginning with a visual inspection thats fairly detailed to check everything top to bottom. Then we go through various electrical or performance tests. [After the evaluation] a member of the internal team contacts the customer and describes the situation. There are two possible outcomes: either the product is repairable or the product is not repairable, in which case we offer that customer an exchange.
24×7: How has the MVS group affected Medrads business?
Cinalli: The service business has been identified as a high growth area within Medrad. Medrad has, over the past 10 years, been growing at about15% a year. To maintain that rate, there has to be a balance of high-growth and stable offerings. Medrads multivendor service group has been identified as one of the high-growth areas. In 2003, we budgeted for double the size of the businesstaking this area of the business from roughly a $4 million to an $8 million business.
24×7: How has the MVS helped Medrads customers?
Cinalli: The most important way is in the education of the end users. Many end users did not realize that their coils or their probes were repairable. Initially, without that knowledge, if they had a problem with their probe or coil, and it was not under manufacturers warranty, they simply replaced it. There are a number of people in the industry who were not aware that these items could be repaired. We have really tried to put a large campaign out there to educate the users that there are a number of situations in which coils and probes can be repaired and put back in circulationa much more cost-effective alternative than just replacing them.
24×7: Has MVS changed the way Medrad does business?
Cinalli: It hasnt necessarily changed it. What it has done is extend our reach into our customer base, and that enables Medrad to diversify into different product areas in the long run and still infuse the same high-level quality in our offerings. As we look to take Medrad to a $500 million or $1 billion company, obviously were going to have to diversify into different product lines, and this allows us to extend ourselves into different areas of the hospital.