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Transferring to an Outsourcing System

The demands for transferring a manufacturing process to an outsourcer are significant. Here are the critical issues to consider in any such undertaking.


Medical device firms are increasingly moving from diverse operations to focused core competencies. They do this by divesting underperforming units, sourcing areas that are outside of their central businesses, and merging with other players in the same market. Exploiting competitive advantages such as extending existing medical device patents into new product lines, leveraging market dominance to add value, and developing innovative therapies and technologies using a proven R&D team are among the steps companies can take to be more successful.

Partnering is hard for most organizations because of the sheer scope of the project. Of course, this difficulty is not unique to medical device firms. It is a general trend for manufacturing everywhere. However, there are some issues that make it more difficult for devices firms. FDA primarily holds the intellectual property owner (who often may be the marketer) legally and financially responsible for a product, no matter where it is manufactured. This means that a marketing-focused company must perform due diligence initially on a potential outsourcing partner, and it must monitor the process to ensure that the product continues to conform to requirements. To do this, a company must retain the necessary resources to oversee this task and have a process for managing the oversight (which for all practical purposes could be called audits).

The outsourcing company itself is an FDA-registered facility with its own policies, procedures, and preferences. The quality system regulation (QSR) is intentionally nonspecific about duties so as to enable companies to choose the compliance path that best suits their particular situation. Harmonizing these in an outsourcing relationship is not always straightforward. Without proper harmonization, efforts may be duplicated, which increases complexity and cost. There are numerous areas where some consideration and planning could prevent such problems. Project management, technology transfer, and quality transfer must all be considered as core aspects of transferring a manufacturing proj­ect to an outsourcer.

Project Management

Outsourcing projects are very difficult to coordinate. Operations that took years to assemble must now be moved in a matter of weeks.

Realistically, it is important to remember that not everyone who could participate will want to. Expect attrition to begin as soon as the announcement is made that the company is beginning to have an outsourcer manufacture products. And often the best people leave first, thereby jeopardizing all phases of implementation. This is particularly acute for the medical device industry because qualified technicians are in high demand.

For example, for the migration of the sterilization of a Class II device to an outsourcing company (a relatively straightforward effort), a team requires the support of at least four experts, as follows:

  • A sterilization validation expert to develop, review, and execute new protocols.
  • A medical device regulatory affairs manager to review labeling for any necessary changes.
  • A sterilization packaging engineer to ensure that the product packaging can tolerate the new sterilization process.
  • A medical device quality manager to approve all necessary documentation changes.

If the product is to be shipped internationally, then all personnel must become familiar with the specific distribution requirements for each country, in addition to their current duties. The need for technically trained staff becomes greater with the complexity of the project.

To keep current employees, it may be helpful to offer generous retention packages (such as increased vacation, bonuses, or pension guarantees). Such practices may keep people satisfied and keep the project moving. However, for those who leave, it is best to look for replacements among consultants, former employees, and local contractors, rather than using a local staffing agency. These temporary employees should also receive compensation for their time and knowledge. By helping critical people achieve a soft landing after the project is over, the probability for success rises dramatically.

It is also advisable to have two proj­ect managers for this undertaking, one located at each site. These people need to have the authority to deal with all requests, problems, and issues. There is absolutely nothing like having a person on the ground to go to when problems arise. The project managers need to be at each site at least 50% of the time. Therefore, if no second resource is available, a single person can do it by alternating weeks at each site.

Technology Transfer

Table I. (click to enlarge) Common technology transfer items.

Technology transfer involves a major movement of systems, technologies, and products that are unique to many medical device companies. This includes manufacturing technologies, bespoke or highly configurable software used to manage processes, and company processes and procedures. Table I lists a few areas in which technology transfer typically needs to occur.

For example, an injection-molded medical device component is transferred from one site to a medical device molder that has extensive experience making similar parts. There are several areas in which technology transfer could be needed.

In this case, the parent company must provide data on the molding process, including set points and environmental variables (chill-water temperature and ambient temperature), to the outsourcing partner. It then must be formally validated that these process parameters will work on the contractor's molding equipment.

In addition, the parent company must transmit its product release system to the contractor so that product is shipped once the sourcing company's quality group approves it. This requires transmission of the device history record before approval, and formal notification of the approval.

Lastly, the parent company must share its document control system. Items include access and changes to design control files, and validation protocols and summary reports. Device master records, design history files, corrective action and preventive action records, and possibly customer complaints should also be included.

Technology transfer facilitates FDA or ISO inspections. By sharing data, companies maintain a continual process history for the design file and assist engineering and quality personnel in evaluating the effects of operational changes on a product's validation status. In nonregulated industries, such tasks would be delegated to the contractor. For medical devices, the parent company retains responsibility for ensuring product quality. Although the contractor is subject to FDA scrutiny, the responsibility for these tasks cannot be delegated.


Process knowledge is another area in which dedicated technology transfer should occur. There is a difference between the knowledge required to construct a machine and the skills that are necessary to operate it. Operation skills include understanding specific materials, operating conditions, and specifications. Undoubtedly, process changes are required to offset slightly different environmental, raw material, and personnel differences. All such information should be documented in standard operating procedures and validation documentation. The fact that the equipment was physically moved might cause some unforeseen damage. Even like-for-like changes can result in small differences in operating characteristics. Furthermore, ongoing needs for new product development require process knowledge to ensure that products have the same or better quality than earlier versions.

Process transfer is best accomplished by reviewing the change history file, validation documentation, and any off­line process quality metrics with both the new and old process engineers responsible for the process. Further, spreadsheets, design of experiments, and other technical resource files (usually informally kept) should be copied and shared with the new process engineers to form a foundation for process changes and developments.

Returning to the previous example of a manufacturer of injection-molded devices, the process knowledge and documentation that should be transferred includes the following:

  • Design of experiment studies for original and new molding process including optimum set points (hold time, injection time) and noise variables (temperature) by cavity.
  • Validation protocol, execution, and summary report of both the old and new molding processes.
  • Statistical process control data for critical dimensions and part weight as defined in the product specification for both the old and new locations.
  • Corrective and preventive action reports related to the process from the beginning of the equipment operation.

Quality Systems Transfer

There are numerous opportunities within quality systems to improve outsourcing efforts. Although most proj­ects are cost driven, quality assurance is critical to ensure that the transition occurs without QSR violations and that the company does not sell misbranded products. Quality systems cover the gamut of quality planning, document control, and validation.

Quality planning is essential to ensure that all regulatory, quality, and legal requirements are met, because there are unique quality issues that arise when transferring operations. Full labeling, submission, and facility registration reviews must be completed by the parent company. Primary packaging, secondary packaging, instructions for use, 510(k) submissions, investigational device exemptions (IDEs), premarket approvals (PMAs), and facility registration must all be verified as accurate and complete. Even nonrequired labeling should be verified so that nothing is incorrect or the products might be delayed at customs. Such diligence requires support from legal and regulatory personnel, which are usually not the same people.

Regarding who should complete the registration reviews, the burden lies on the contracting organization, although the contractor can be tapped to assist with some portions. If a product is being manufactured under an IDE or requires premarket approval, then it is imperative that the parent company's regulatory personnel complete the review as soon as possible. The facility might not be approved to manufacture without additions to the PMA submission.

Standard operating procedures (SOPs) must be developed and possibly translated. Specialized, perhaps bilingual resources may be required to do this work. All pertinent documents from the previous operation (legacy documents) must be provided to the contract partner. This includes process qualifications, device history records, device master records, corrective and preventive actions, internal audits, and change control files. Although this is often an after­thought, SOPs give the company the best chance for success because it can review all production and quality history without having to go through the outsourcing partner.

Because the majority of outsourcing firms manufacture products for several OEMs, they are extensively audited by FDA investigators, ISO 13485:2003 registrars, and individual client representatives. Having complete production records on-site not only facilitates these audits, but also gives the outsourcing partners opportunities to harmonize these procedures so that only one document is needed to satisfy the requirements of multiple customers.

Validation is a significant area with respect to outsourcing efforts, the details of which are beyond the scope of this article. The fundamental problem is that most operations were not designed with portability in mind. Although some validation efforts, such as test methods, are simple to execute, others such as equipment and software that were installed before validation was required (e.g., legacy equipment) are notoriously difficult.

Before any actual move, legacy equipment qualification standards need to be defined. Normal validation practices may need to be amended depending on the situation at hand. Missing drawings, blueprints, and service manuals are common problems. What is critical? Can missing documentation be reproduced? If not, can the equipment be easily replaced?

For example, an old conductivity meter is used to verify wiring integrity in an electronic medical device. It has no manuals or qualification records, just a calibration schedule and an SOP used by the technician. Because there are no standards, it is difficult to validate this item without some prevalidation work to determine the instrument's accuracy and precision. In this case, replacement is warranted. If the instrument was extremely expensive or bespoke, then substantial work should be done to determine the validation parameters, and only after that could validation protocols be developed.

Most equipment is not designed to be installed twice. Therefore, special testing, verification, and validation may be needed to ensure that a transfer does not damage the equipment. Similarly, special cleaning procedures should be developed and implemented prior to installation to verify that equipment is in as good condition prior to installation qualification as it can be. Special storage, shipping, or other fulfillment activities that reduce damage should also be defined early as part of the quality planning process.

For example, a company is moving custom-built robotics used to manufacture a medical device. If the company wanted to qualify the move, not only would standard installation qualification testing be done (electrical verification, materials of construction, etc.), but additional validation efforts would also be appropriate, including:

  • A cleaning and disinfecting procedure and inspection to ensure that all packaging materials and other debris were thoroughly removed.
  • A 100% inspection of all electrical fittings and connections by a qualified electrician to ensure that none came loose during transport.
  • A 100% inspection of all screw fittings by a qualified maintenance technician to ensure no mechanical separation had occurred.

Inspection method transfer with its own ancillary equipment, procedures, and qualification should be actively managed to keep delays from endangering the project. This area tends to be glossed over as just a quality issue even though it has the same logistical requirements as the primary process, including equipment transfer, documentation, training, and validation. The quality transfer should be completed as soon as possible because it is used to qualify the primary processes.

Qualifying backup labs is also critical to prevent customer service problems. The labs also perform interlaboratory qualifications as needed. The difficulty or simplicity of this task depends on the contractor's level of sophistication. Most new measurement systems have greater accuracy and resolution than older systems, which can lead to difficulties in establishing acceptance criteria. For example, if a resin is tested using two spectrophotometers and a Fourier transform infrared spectrometer, chances are that each instrument will have different resolutions but sufficient accuracy. In this case, only a qualified chemist can establish whether the spectra are identical because the pictures will look different and unequal to an untrained eye.

Performance qualification of the new processes is one of the final operational aspects of an outsourcing effort. Detailed process trials can verify operating parameters including current quality levels, inspection points, and qualified inspection methods. To accurately qualify a process, these trials must be supplied. They ensure that the product made by the new operation still meets the requirements established by the old operation. While there is little argument of its importance, companies may be tempted to take time from the qualifying process to offset project delays. Doing so can lead to improperly executed validation protocols, which can lead to deviation or variance. Inadequate validation can also result in compliance problems, and worse, a poorly performing process that increases testing failures, product rejections, and waste.

Clear roles and responsibilities must be defined for the quality support after the project is completed. It is a mistake to use one set of engineers and managers for the transfer and then dump the subsequent system on another group (e.g., quality assurance contract manufacturing). This results in a confusing situation for the supplier, which, at best, leads to misunderstandings and delays. At worst, the different units may make competing quality decisions because they have different mandates (short-term get-this-project-done versus long-term management). A single quality and regulatory group should support the proj­ect from the beginning and carry it through to completion.


As companies focus on their core competencies through outsourcing, their processes must be smoothly transferred to maintain and improve the company's bottom line. Project managers need to consider outsourcers' special resource needs and constraints to planning so that projects are launched successfully and on budget.

An efficient technology transfer program and quality system deployment takes into account the increased compliance burden, as well as the learning needs of the contractor. A good system smooths execution while limiting quality nonconformities.

Jeffrey Stephens is president of Ixian Consulting Inc. (Jefferson, GA). He can be contacted at [email protected].

Copyright ©2007 Medical Device & Diagnostic Industry
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