How Well Do Your Outsourcers Serve You? Hint: They Could Probably Do More.

It’s not enough these days for a contract manufacturer to simply provide a product or service. OEMs should be able to ask more from service providers, especially in the face of healthcare reform, a proposed device tax, and the ever-present pressure to reduce costs.

Heather Thompson

March 1, 2010

2 Min Read
How Well Do Your Outsourcers Serve You? Hint: They Could Probably Do More.

Contractors are already looking to expand their services in ways that make sense to medical device manufacturers. “The changing marketplace has impacted our clients,” says Chris Morton, COO of MedPlast (Tempe, AZ). “As companies continue to become leaner, they are asking for more services from suppliers.”
These ideas can take the form of leveraging technology, leveraging manufacturing locations, and even aiding in the regulatory process.

MedPlast, for example, has implemented what it calls a technology road mapping process that matches OEM needs with the most appropriate technology applications. The company maintains a collective library of technologies with existing and potential uses. It continually gathers, screens, and evaluates potential applications and pairs them with an OEM’s development process. “We believe that becoming part of our customer’s development process from the very beginning will ensure a leaner, more-effective product.

Express Manufacturing Inc. (EMI; Santa Ana, CA) also provides program management services for medical device manufacturers. John Koon, EMI’s director of corporate and public relations says it is often a struggle for OEMs because “companies are looking for the perfect solution—which does not exist. As my wise ex-boss said, ‘you can choose two out of three things in life—fast, cheap, or good.’”

Such compromise may be especially true, he says, with manufacturing processes increasingly moving to offshore locations. Koon says leaders need to ask just how much labor they want to put into their products. Questions should include whether a local or offshore company could do the job best. He also says that some may want to cherry pick their outsourced services, keeping some processes in-house. A good contractor, he says, helps an OEM make the best decision for its unique needs. “Finding the right match is the key,” says Koon. “Having a clear way of measuring total cost over a period of time is an important step toward profitability.”

Assistive programs such as the ones provided by EMI and MedPlast could be critical to an OEM’s success. And medical device manufacturers may feel particularly drawn to companies that really understand the idiosyncrasies of the medical device industry and create programs that respond accordingly. To that end, SABIC Innovative Plastics (Pittsfield, MA) has implemented a regulatory process for its implant materials. The full story about its program can be found here. In summary, the program guarantees that implantable plastics in SABIC’s portfolio have a change-management system in place that protects OEMs from sudden material replacements. SABIC’s industry manager of healthcare, Tom O’Brien, says that the comprehensive plastics healthcare policy was a natural progression to serve this industry. “Our customers need to feel comfortable that we are in this market and we understand their needs.”

With such programs available, it seems that OEMs should take a look current systems and see whether their outsourcers are doing everything they can to meet their needs. If not, it may be time to ask.

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