Partner with a CM?

Outsourcing to a CM can significantly reduce the time and costs of producing a new device – particularly a novel technology.Every medical device manufacturer is looking for the best way to get new products to market as quickly, efficiently, and cost-effectively as possible. The appropriate use of contract manufacturers (CMs) can enable device companies to achieve all of these goals and more. CMs are proving their ability to meet stringent quality and regulatory requirements by successfully taking on highly complex, diverse, and demanding projects. Not only do today’s large CMs offer a broader range of services, facilities, and expertise than ever before, but their global reach means they are familiar with regulations, business cultures, and supply networks in the fastest-growing medical markets. Outsourcing to a CM can significantly reduce the time and costs of producing a new device – particularly a novel technology – and can free OEMs to concentrate on the next breakthrough.

Particularly in today’s climate of tough global competition, increasing cost pressures from insurance companies and legislators, growing demand from emerging regions, and new technological advances, all give device makers have new reasons to consider outsourcing. Here are five of the most compelling.


1. Faster Time to Market
Contract manufacturers can help OEMs accelerate time to market for a new product, allowing a faster return on investment (ROI). For low-volume devices in particular, manufacturers may find it cost-prohibitive to hire the experts and purchase the technologies that are required. Because many CMs already have facilities, staff, equipment, and supply chains in place, they can begin design, optimization, testing, or manufacturing quickly. Replicating such an infrastructure in a new region would require the OEM to invest enormous resources and a minimum of 12 to 18 months of activity, including identifying the site, registering the firm, building the facility, and hiring and training employees.

Further, large CMs offer a local presence in key regions and countries such as the BRIC (Brazil, Russia, India, and China) nations, allowing OEMs to produce devices locally for specific markets.

Another speed advantage offered by CMs stems from their extensive knowledge of consumer electronics manufacturing, along with high quality standards from the aerospace and automotive sectors, which transfer seamlessly to the medical sector. However, it is key to find a CM that combines this electronics expertise with a true understanding of the market-specific requirements of medical products, in particular the requirements for validation and design controls.

More medical devices are integrating electronics into their design to not only provide the desired medical function, but also maintain historical data such as time and dosage, with reminders and alarms for the next use of the device. Remote monitoring is a growing area because of its potential to improve outcomes in chronic illness management while reducing costs through shorter inpatient stays and less-frequent office visits. The integration of wireless and other electronic functionality requires expertise in circuit board design, user interface creation, data transfer protocols, custom software, and other areas that have traditionally been the domain of CMs. 


2. Instant Expertise
Medical industry trends – including miniaturization, non-surgical/minimally invasive surgical devices, and home health care delivery – demand more-sophisticated, smaller, and easy-to-use electronics, which may not be a core competency of device OEMs. A CM can supply specialized knowledge, expertise, and facilities to support a novel application – without the delays and costs of acquiring them in house. For example, OEMs interested in the growing market for combination products may not be set up to handle all of these components. Instead, they can leverage a CM’s experience with pharmaceutical formulation, fluid engineering, nanotechnology, specialty plastic molding, and other areas.

This approach also provides a competitive advantage to OEMs by giving them a source of strong institutional knowledge about new technological possibilities for upcoming devices, such as wireless technology for blood glucose meters.

Furthermore, while a device manufacturer may focus on one narrow area, a CM likely has had in-depth and diverse experience with a range of problems, issues, materials, technologies, and processes, helping the OEM avoid protracted efforts or mistakes. If a CM does not have expertise in a particular area, it usually has a relationship with a partner that does. These partnerships can significantly reduce time spent finding and qualifying a niche supplier – particularly in an unfamiliar geography.


3. Issue Avoidance
Value engineering is another way in which a CM can contribute experience and expertise to avoid future pitfalls such as manufacturing problems or cost issues. The value engineering process involves thoroughly evaluating a device’s design, prototype, components, materials, and processes to pinpoint potential issues and suggest solutions. For example, the CM’s team of engineers may review the customer’s bill of materials to identify components that are nearing end of life while finding an alternative. Another example is finding ways to consolidate parts to drive down cost and reduce manufacturing complexity. The CM may also be able to suggest alternative suppliers for materials or components offering lower pricing, better service, or higher quality. Other value engineering services include review and optimization of key processes so that the device can be tested and produced quickly and easily.


4. Regulatory Compliance
Complementing their technical expertise, larger CMs typically have extensive knowledge of regulations, standards, and best practices that can significantly streamline the art-to-part. Work, in automotive, consumer electronics, and other diverse industries, has equipped many CMs to navigate current environmental requirements, such as avoiding hazardous materials and simplifying end-of-life device disposal. Some CMs have built or upgraded cleanrooms, developed centers of excellence, and have other specialized facilities; undergone certification to the ISO 13485 standard; and assimilated current Good Manufacturing Practice (cGMP). In addition, a CM’s knowledge of local regulations and procedures can be invaluable for OEMs seeking to take advantage of opportunities in other nations.


5. Focus on Core Business
Rapid technological advances in medical devices make it imperative for OEMs to stay focused on their core competency and the next breakthrough. However, many do not have the resources to do this while also commercializing an existing product. Even if manufacturers possess the resources to develop sophisticated electronics or complex combination products internally, competitive pressures may require their engineers and designers to start working on the next product immediately, instead of spending the time needed to optimize a current device’s design and manufacturing process. A CM can get such back-burner projects moving quickly and efficiently, leading to a potentially new revenue stream for the OEM.

Another business capability offered by CMs is supply chain management. A complex medical device can involve hundreds of components and materials, each with specific requirements, associated standards, and applicable regulations. In particular, the environmental movement has added requirements for reduction of hazardous materials and specific guidelines for disassembly, recycling, and disposal. Many OEMs have neither the supply network nor the expertise to find and manage all these disparate elements.

Although device manufacturers have traditionally retained control of their supply chains due to liability issues, they are recognizing the value of transferring some of this responsibility to CMs, who are using sophisticated tools like Electronic Data Interchange (EDI) to reduce costs and accelerate the process. With their high purchase volumes, economies of scale, and global scope, CM partners can often drive down costs and optimize supply chain management more effectively than OEMs.


Conclusion
Several current trends are making outsourcing of medical device projects to CMs more attractive than ever. Since the beginning of 2010, new medical device activity has surged thanks to greater availability of venture capital and other funding, and strong demand from China, India, and other nations.

At the same time, the U.S. Food and Drug Administration (FDA) are subjecting new product applications to greater scrutiny and are conducting more audits. Patient safety, including the reduction of risk, is a major focus of regulators and healthcare providers.

Engaging with a CM as a strategic resource during medical device development offers device OEMs a host of advantages, including speed; specialized expertise; diverse experience; flexibility; a global reach that can prove instrumental in optimizing an OEM’s efficiency; and delivering the fastest and largest ROI in a new project.


Jabil Healthcare & Life Sciences
St. Petersburg, FL
jabil.com