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Some of the traits that make a contract manufacturer attractive to corporate and private equity group buyers also make it a good outsource partner for OEMs.
July 5, 2012
1 Min Read
.svg?width=850&auto=webp&quality=95&format=jpg&disable=upscale "6 Signs of a Good Contract Manufacturing Partner for Medical Device OEMs")
In doing some reporting for MD+DI's upcoming Guide to Outsourcing supplement (look for it coming out in August), I came across Capital Partners' Q2 2012 report on medical device outsourcing, which contains a preliminary mergers and acquisitions assessment for medical device outsourcers.
Though the form is meant to be a self-assessment tool for contract manufacturers, it struck me that some of the traits that make a contract manufacturer attractive to corporate and private equity group buyers also make it a good outsource partner for OEMs. Some examples include:
"Trusted, highly integrated partner with comprehensive solutions."
"Manufacturing capabilities in U.S., Europe, and emerging markets."
"Company has achieved critical mass."
"Global presence."
"Extremely high retention rates coupled with long-term commitments/contracts."
"High-growth OEM customers with portfolio of innovative medical devices."
By the same token, traits that make outsourcers less attractive to potential buyers should also make OEMs think twice about giving them their business. Examples include:
"Single-location manufacturing facility."
"Compete primarily on price."
"High account turnover."
"OEM base under stress and facing pricing pressures."
What criteria do you use to evaluate potential contract manufacturing partners?
—Jamie Hartford is the associate editor of MD+DI. Follow her on Twitter @readMED.
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