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How medical tech manufacturers save by outsourcing warehousing

Medical technology clients can realize economies by keeping warehousing local, avoiding excess shipping costs, and eliminating internal overhead.

For both its drop-ship and stock-and-ship programs, ICAT warehouses the products near where they are produced—inventorying each box when it comes in, and managing that inventory—then ships on demand when customers order them.
For both its drop-ship and stock-and-ship programs, ICAT warehouses the products near where they are produced—inventorying each box when it comes in, and managing that inventory—then ships on demand when customers order them.

Warehousing products can be a costly proposition for medical technology and device manufacturers. It requires leasing and managing a facility and the overhead that goes with that proposition—utilities, insurance against loss or damage, inventory tracking software, shipping coordination, payroll for personnel, and the responsibility to oversee them.

A “drop-ship” program is where firms outsource their warehousing and shipping operations to ICAT Logistics at a flat fee per unit.

Another option is a “stock and ship” program for companies that want ICAT to set up medical carts with their products, and then send the customized carts to clients.

“Our company is growing very rapidly,” explains Mitch McReynolds, Logistics Manager at Ulthera, Inc., a Mesa, AZ-based company whose Ulthera System has received FDA clearance to non-invasively lift skin on the neck, chin and brow. “ICAT’s been a good partner for that growth.”

For both its drop-ship and stock-and-ship programs, ICAT warehouses the products near where they are produced—inventorying each box when it comes in, and managing that inventory—then ships on demand when customers order them.

ROI from Drop-Ship, Stock-and-Ship programs

Medical technology clients can realize economies from using one of these programs. By keeping the warehousing local, companies can avoid excess shipping costs. Finding a logistics partner also means eliminating the cost of overhead and salaries that go with having an internal department that does this work.

A prominent medical device business headquartered in the Midwest recently enlisted ICAT’s help after acquiring a San Francisco-based company. To consolidate its products, the parent company shipped all its acquisition’s purchase orders to Jacksonville, FL—which cost $115 per unit. Individual orders were then shipped from there.

By assigning ICAT a warehouse number, this company was able to realize a savings of 25% to 45%, depending on the ultimate location of the client—and cut transit time in half—by keeping their products near where they were made, and offloading the shipping responsibilities to ICAT.

How manufacturers see outsourcing

Materials Manager Shamayne Gerlich at Given Imaging in Los Angeles, a GI medical device manufacturer and pioneer of capsule endoscopy, has been working with ICAT for the past six years. “They will adjust what they need to do in order to match what you specifically might be looking for. It’s not a situation where you’re locked into one process, and that’s that. They have proven that they can be flexible and responsive when needed,” she said.

LAST CHANCE TO SAVE! New Tech for Life Sciences at PACK EXPO Southeast
The exciting new PACK EXPO Southeast 2025 unites all vertical markets in one dynamic hub, generating more innovative answers to packaging challenges for life sciences products. Don’t miss this extraordinary opportunity for your business!
REGISTER ASAP FOR $30!
LAST CHANCE TO SAVE! New Tech for Life Sciences at PACK EXPO Southeast