Medtronic CEO Geoff Martha joins 'Influencers with Andy Serwer' to discuss inflation and its impact on the U.S. economy.
ANDY SERWER: Another hot topic, inflation. And I'm wondering if you felt compelled to raise prices recently and what the outlook is there.
GEOFF MARTHA: No. I mean, look, I've talked to a lot of CEOs on this one and you've got some industries where there's razor thin margins and they pass along the inflationary cost. I've talked to others that are more in the moderate and medium margins and they pass along some of the costs. Right now we have not passed along price increases. We have pretty good margins and we've got some cost down programs that we were hoping to actually improve margins. Now they're kind of offsetting some of the inflationary pressures. So-- but it is looking, talking to CEOs across different industries, the inflationary costs are real.
I'm not an economist I don't know when that's going-- what the future holds here but we're definitely planning for higher inflation and really getting more aggressive on cost down programs to offset that-- matter of fact, we just-- during the pandemic hired a new head of global supply chain and operations. We hired the head of-- he's from-- Greg Smith from Walmart and really trying to bring-- I mean, who has a more complicated supply chain than Walmart, right? And so bring some of that expertise into health care, especially in the Medtronic.
I think, you know, our company, our industry, we're known for technology, innovation-- clinical innovation like doing clinical trials and understanding how technology can impact the physiology. And we're known at taking those new procedures, new devices and working them into the health care systems worldwide and making them standard of care. That's our specialty.
We're not necessarily known for supply chain excellence or manufacturing so we're bringing that into our company. We're traveling around right now and visiting best in class companies in the operations or manufacturing or supply chain, integrated business planning, and learning from them and really trying to up our game in this area. And one of the incentives to do that is the inflationary pressures and not wanting to pass that along to health care systems. Because, as you know, health care is already a pretty high percentage of many government spend, and I don't see them wanting it to go any higher.