GIA says that growth in outsourcing is driven by rising demand from the device end market, as well as OEMs’ increased interest in improving productivity and simplifying the supply chain. It is also driven by the emergence of one-stop shops and the ability of contract manufacturing to control costs, an added impetus for adoption during a tough economic climate.

Medical device manufacturers at all stages face mounting pressures to reduce costs and increase margins while still delivering product advancements, superior quality, and excellent customer service. As companies modernize their business practices, they are driven by the need to remain competitive and retain flexibility in the marketplace.

Key players in this marketplace include Accellent Inc., Advanced Scientifics Inc., ATEK Medical, FlexMedical, Creganna Tactx Medical, Greatbatch Inc., HCL’s Life Science, Heraeus Medical Components, Lake Region Medical, Memry Corp., Minnetronix Inc., Sandvik Materials Technology GmbH, Symmetry Medical, The MedTech Group Inc., The Tech Group Inc., and TriVirix International Inc.

Medical device outsourcing allows OEMs to direct efforts on specialized areas including technology, R&D, marketing and sales. The current global economic slowdown is expected to encourage OEMs from Europe and North America to tap labor from low-cost destinations such as India and China, which offer highly skilled labor at relatively low cost.

As contract manufacturing gains acceptance and recognition, OEMs are seeking ways to better manage their outsourcing partners, and preferably have fewer partners to manage. Such a trend has led to the emergence of one-stop shops, which can help synchronize multiple services.