What to Do When Your Outsourcing Partner Evolves
If outsourcing is all about partnerships, what happens when your partner changes? I don’t mean having to switch because the partnership is being dissolved or is not working; I’m talking about how to cope when leadership changes hands or an outsourcing firm is acquired. Because many outsourcing partners are so carefully screened, they are often partners for life. So what can an OEM do when that a partner is different?
March 8, 2011
If outsourcing is all about partnerships, what happens when your partner changes? I don’t mean having to switch because the partnership is being dissolved or is not working; I’m talking about coping when leadership changes hands or an outsourcing firm is acquired. Because many outsourcing partners are so carefully screened, they are often partners for life. So what can an OEM do when a partner is evolves in some way?
At best, a shift in leadership or an acquisition brings in new ideas, and increased opportunities for the OEM. At worst, it can mean changing staff, new policies, and vendor or service adjustments.
One person uniquely qualified to offer advice on how to handle a change in contract manufacturing is Dan Croteau, recently named CEO of Vention Medical. Vention is a new entity that is the umbrella company representing The MedTech Group, TDC Medical, and Advanced Polymers. Eventually, most of the services will be housed under the Vention brand.
Croteau replaces George W. Blank, The MedTech Group’s founding CEO who will now serve as the chairman of the board of directors. Croteau recently served as president of FlexMedical, another global medical products contract design and manufacturing division of Flextronics. He has also served as executive vice president and general manager at Accellent.
“Whether it’s changing a name, consolidating a company, or hiring a new CEO, contractors are always looking to create more value for OEMs,” says Croteau, who has been travelling a lot recently to visit customers. The new CEO was nice enough to give me a few minutes of his time, despite an understandably busy schedule.
There are challenges for OEMs, says Croteau, but there are also strong opportunities for medical device manufacturers in working with a contractor as it transitions. “Ideally, this simplifies processes for OEMs. We have the opportunity to create value for our customers through offering more-innovative products, increased design capabilities, and cost-effective manufacturing.”
The potential benefits to the OEM depend significantly on the contractor executing its plan well. There are legal and regulatory challenges that must be addressed when a contractor changes its name, Croteau explains. He says that Vention is collaborating with each company to make the changes they need to align with FDA regulations and quality systems, as well as to explore new opportunities.
“Our challenge is to get a lot of feedback and encourage communication from OEMs,” Croteau says. “We want to keep the services that work well. But we also want to fix problems and provide options to make the work more streamlined, especially in terms of cost competition and helping customers reach the market quickly.”
Fixing problems is not always explored to the full benefit of the customer, he says. “This is an opportunity to reinforce what’s important [to the OEM] as well as a moment to express future needs.”
Croteau is most concerned with maintaining trust. “There is nothing more important than trust in our relationships to clients, which is as it should be for any company.”
The questions OEMs have when their contractor is acquired or otherwise changed are tough to answer and often unique to the individual firms. Ultimately, medical device makers will have to decide how to proceed with their new(ish) partners.
About the Author
You May Also Like