Outsourcing Medical Device Manufacturing in 2022
It is projected that by 2050 there will be 1.5 billion people aged 65 years or over, worldwide. This is one of many factors accounting for the projected 14.6% annual growth of global outsourced medical device manufacturing over the coming years.
Recently, there has been an increase in acceptance of contract manufacturing services in the medical device industry to improve manufacturing capabilities and device development, optimize supply chains, reduce direct expenditures and balance rising operating expenditures.
This article outlines the top concerns and considerations for OEMs when outsourcing medical device production in 2022.
Common Reasons to Outsource
Many companies have likely discussed the option to outsource medical device production and, if the decision to outsource a project has been made, it has likely stemmed from one, or all, of the following reasons:
- Reduce Labor Costs
With labor costs increasing, outsourcing overseas offers significantly reduced costs and better margins - Reduce Risk
Best risk mitigation practices suggest that manufacturers must use multiple plants in different locations to allow for uninterrupted production and continuance in times of crisis. - Time to Market
Contract Manufacturers can typically move faster than large OEMs, in return, speeding up the manufacturing time for products. - Outsource Tech or Expertise
You may not have the required technology or expertise available in-house for highly specialized projects. - Access to Complex Micro Semi Automated Assembaly
Facilities hosting micro-assembly lines must be supported with specialized machinery and the required infrastructure. Micro-device order sizes can vary tremendously, the facility needs to be geared for volume variations. - Focused Resources
Increased ability to focus resources on the OEM’s core competencies, which may include therapy development, clinical applications & regulatory capture that your business may not have
Finding The Right Medical Device Manufacturing Partner
You’ve made the decision to outsource. Now What? What, exactly, will determine the team’s overall success? Success begins with finding the right partner, and there are additional factors to look at when looking for the perfect match.
Contract Manufacturer Candidate Qualifications
When sourcing your next partner, ask yourself these questions:
- Quality Performance History
- What is the specific strength you are looking for in your potential outsourcing partner?
- Do they align with your values and will they deliver value-added solutions throughout the partnership?
- Required Certifications and Government Registrations
- Has the potential partner acquired all of the necessary certifications and do they pass all necessary government regulations?
- Do they have a strong sub-supplier system in place to ensure they’re meeting all quality requirements?
- Supply Chain
- Evaluate their supply chain model – How do they cope with demand fluctuation? Do they have an adequate risk mitigation strategy in place for major disruptions?
- Do they have access to the necessary raw materials that your project requires?
- Procedures for Success
- Does the potential medical device manufacturing partner understand your requirements of involvement in the project as an OEM? And do they have procedures in place to accommodate those requirements?
- Do they have the ability time to produce the required documentation?
- Operational Capability
- Does the potential partner cover all areas of expertise that you’re looking for in a partner, or that your company lacks?
- Do they have a good track record when it comes to delivering quality services on time?
Ensuring your potential partner has a well-established reputation and experience is a good start, but it doesn’t necessarily ensure a project’s success.
Pre-Market vs Post-Market Manufacturing Outsourcing
There are benefits to outsourcing both pre- and post-market, what is the ideal time to outsource for you can depend on many factors.
Benefits to Pre-Market Outsourcing
When you outsource pre-market, you gain the flexibility to alter the design, which allows for better manufacturability without the limitations that may be set forth from current deal structures.
Benefits to Post-Market Outsourcing
When outsourcing post-market, you have the ability to improve based on user feedback, while using funds from a revenue stream that is already in place.
How to Ensure a Productive Ongoing CDMO Partnership?
Developing a working relationship with a partner throughout a project is not an easy feat – it’s a complex and multifaceted undertaking that can be challenging for all involved.
When outsourcing, it’s important to ensure that you’re fostering a working relationship that is both cooperative and mutually beneficial, with a clearly defined communication plan that encourages accountability and honesty. This is the key to ensuring a harmonious relationship and maximum productivity for all.
Issues are bound to occur in almost every project with every OEM/CDMO relationship. The important thing is that both parties are able to respond efficiently to these issues and overcome these inevitable challenges. Setting a clear structure for communication at the very beginning is essential to maintaining a productive and healthy work relationship.
Selecting an Outsourcing Partner Based on Market
Although finding a CM based on the market isn’t necessarily a traditional consideration when it comes to outsourcing, finding a CM that thoroughly understands the device market can come with certain advantages.
An example of this would be when China’s MAH policy allows an OEM to market a product as “Made in China, For China” without the OEM actually needing a physical presence in China to do so. Read more about how to access the Chinese medical device market.
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