Increased competition, regulatory and cost pressures, and the ever-increasing speed of innovation are the business drivers for today's device manufacturers, says Phil Couling, product manager for Consilium, Inc. (Mountain View, CA), a producer of manufacturing software systems. "Adding to these global challenges are some of the biggest changes in the health-care products industry since the beginning of FDA regulation." According to Couling, key changes affecting the device industry include the following:
- Over the past 20 years, manufacturing costs have doubled.
- Buying decisions are driven primarily by the ability of the manufacturer to deliver on time, even when custom specifications and custom packaging are involved.
- Lawsuits and heightened regulatory scrutiny have increased the need to reduce human error and the risk of liability resulting from insufficient controls, as well as the need to expand the margin of safety.
How a medical device company responds to these challenges will determine its long-term success or failure. To achieve success, these manufacturers are increasingly relying on computer-based systems to help them streamline their manufacturing processes. Leading device companies are employing new advances in computerization to achieve best-practice manufacturing benchmarks (see box, page 68).
A WAY OF LIFE
The use of computerization to aid in medical device manufacturing is, of course, hardly new. "I don't know how a company can run a manufacturing facility without computers," says Kathy Reading, MIS administrator for Utah Medical Products, Inc. (Midvale, UT). Roy Peters, an engineering consultant with the California Manufacturing Technology Center (Anaheim, CA), agrees: "There are hardly any manufacturers today that don't rely on at least manufacturing resource planning [MRP]. It's a way of life. Companies have to track materials and control their inventories in order to control costs and become and remain competitive."
But it's these competitive pressures and, especially, FDA regulations that are driving computerization forwardboth for manufacturers of medical devices and for the vendors that supply computer manufacturing systems. As an example of the latter, John Bridges, marketing communications manager for Industrial & Financial Systems (formerly Avalon Software; Tucson, AZ), says, "It's good business practice to track the manufacturing of a product and to know how the customers use it and whether they are happy with it. But in the device industry there's no other choiceit's the law. Previously, computerization has come in bits and pieces. Because the medical device market has not been big enough to support it, there has never been a complete, integrated, cradle-to-grave system for device manufacturing. But now, it's clear that product liability concerns will sooner or later force all other industries to have such a complete system. So it's worth our effort to have this kind of strength. The medical device market is pushing the development of our software systems."
To see how these systems are developing, it may be helpful to take a quick look at the current batch of acronyms. As with most computer acronyms thought up to convey the image of something new, the definitions are a bit elastic and can vary somewhat with the speaker. Reading, for instance, says, "ERP [enterprise resource planning] is just a new term to describe MRP." All the same, there are some basic differences between the key buzz words now in use to describe computerized manufacturing systems.
Manufacturing resource planning is the most established, of course. MRP has to do with the automation of information directly related to manufacturing, including inventories, bills of materials, and orders from purchasing. MRP II takes this process a step further into capacity requirement planning (CRP), in which the general information of MRP is put to more specific uses, such as scheduling how many devices can be built within a certain period.
ERP, as its name implies, purports to integrate manufacturing information with all data throughout the companyincluding those related to sales, marketing, accounting, shipping, and so onto enhance a company's ability to plan, provide better control of operations, and enable products to get to market more quickly. Directly opposite ERP is process control or computerized numerical control (CNC), which has to do with the loading of data into the machines that actually make parts on the shop floor.
In between ERP and CNC is the manufacturing execution system (MES). Where ERP is basically a transactional, purely informational system, MES operates in real time, pulling together all of the information directly related to the manufacture of a productincluding raw materials, equipment, personnel, work instructions, and stipulation of the correct processes. After downloading this information from the ERP system for the actual making of a product, the MES uploads new information, such as the amount of material used and the number of units made, back to the ERP.
These definitions are somewhat schematic, and any particular manufacturing software package may actually perform more or fewer of the various activities described. But before exploring some of the more sophisticated or all-encompassing claims of some software vendors, it's helpful to realize that for many device manufacturers a simple MRP system may be all that is needed.
"We've come to realize that there are a lot of small medical device manufacturers doing less than $20 million in sales each year," says William Urschel, president of Alliance Manufacturing Software (Santa Barbara, CA). "Many are involved in making one of the many niche products in the marketplace, such as breast implants, pain management implants, or various neurological devices. When some of these manufacturers hear the term enterprise resource planning, they may think they need iteven though they're not yet even using MRP II. If a company is doing $50 million in sales, then it might want to start adding some bells and whistles to its manufacturing systems. But if it's still on its first computerized accounting system, it makes no sense to jump way ahead." Urschel, whose company specializes in computerized systems for small manufacturers, points out that only 9% of all the manufacturers in the United States earn more than $100 million in annual sales. "This means that 91% of all manufacturers are in our market," he adds. "It's incredible, but a survey of our customers suggests that the vast majority need just basic computerization to fulfill their manufacturing needs."
Although it may be wise to start small, California Manufacturing Technology Center's Peters suggests that "it's very important for the small manufacturer to get an MRP system that is expandable. Unfortunately, a lot of small manufacturers don't investigate this, so they end up stuck with a rigid, obsolete system that can't adapt."
Utah Medical Products is one company that was stuck with an older system, which, as Reading explains, "was too much of a proprietary-based system. It was not easy to customize and did not allow us to interface with other databases." The company turned to a new ERP system from DataWorks, Inc. (San Diego).
"It was a big project to change systems," Reading says. "We changed to our new program about one-and-a-half years ago. We spent a year investigating different vendors and about six months actually making the transition. It represented a huge investment in both time and money." About 45 network users access Utah Medical's new software off the company's mainframe computer, while another 100-plus users are able to access other software packages such as CAD systems and various spreadsheets. "It will take us a long time to bring up all the bells and whistles on the new system, but we are quite pleased with it."
Reading says that Utah Medical, which focuses on the manufacture of gynecology devices, was looking for a vendor "that we felt had positioned itself to look toward the future and to adapt to changing technology. The worst thing one can do is to put a lot of time and money into a system that cannot change, and then be stuck with it."
While moving into more sophisticated systems may be beneficial, or even necessary, it's not necessarily easy. "Our products have had the most success with those customers who fully understand the scope of their endeavor up front," says Consilium's Couling. "There are real benefits to be gained from implementing a manufacturing process within an electronic system, but one should never underestimate the complexity of the implementation."
Not only can the implementation of such systems be complex, but medical device manufacturers must also undergo a complex process to validate the use of the software for FDA. Robert George, director of industry analysis for Advanced Manufacturing Research (Boston), explains that "up to now, each user's validation of its software system has been an extremely tedious process. Each customer has been required to validate separately to FDA that its software supplier used the proper methodology in developing the software. For most companies, this is extremely onerous, and it has created a big bottleneck."
However, some relief may be in sight. "We've seen the rise of a number of third parties that are making a practice of validating software, and are auto- mating the process," says George. "And we're also seeing some ERP vendors take a fairly aggressive stance in validating their own software for FDA requirements."
Chris Jensen, corporate communications director for DataWorks, says that her company is one such vendor offering software that is functionally compliant with FDA regulations. Features of the software make traceability very easy. "We've found a lot of users that have one set of software for financial management and another for manufacturing, but there is a disconnect between the two," says Jensen. "Our ERP package brings them together."
One device manufacturer that uses the DataWorks software is Kaye Instruments, Inc. (Bedford, MA). Kaye is a pharmaceutical company that validates the sterilization process used in the manufacturing of intravenous drugs. "Our instrumentation and data collection systems require ultrahigh accuracy," says Tim Donaghey, the company's operations manager. "We run all aspects of our business on DataWorks, from accounting and engineering through sales and manufacturing."
Donaghey says his company's prior system was "a mixed batch of assorted third-party packages that required extensive maintenance and information-systems support, and were not integrated. By contrast, the DataWorks system works in fully integrated, real-time fashion. It has a lot of built-in administrative tools that allow us to tailor the software to effectively running our business."
Industrial & Financial Systems' Bridges reports that his company "is using the latest technologies for dealing with databases and document management, and integrating them with our strengths in manufacturing management software to create one large, all- encompassing enterprise system. We call it cradle-to-grave or complete product life-cycle management. The manufacturer can track and trace the entire process from product initiation to completion. And, when there is a failure in the field, the company can use the software to audit the production of the failed device. The system is even designed to handle the problem through closed-loop corrective action."
Ann Papenfuss, regional sales manager for ASI (St. Paul, MN), reports that her company's MES packages are capable of delivering a variety of functions, such as computer-integrated manufacturing (CIM), real-time statistics, loading and downloading of manufacturing data, G-code editing, preventive maintenance, tooling and gage management, document management, and several types of connectivity.
One aspect of ASI's package, Papenfuss explains, enables employees on the shop floor to view any kind of setup, testing, assembly, machining, or related procedures. "For medical device manufacturing, it's important to protect the integrity of all documentation," Papenfuss says. "With a lot of electronic viewing packages, someone can go in and edit a document, either purposely or inadvertently. Our package includes a view-only program that prevents that from happening."
ASI's package also comes with a redlining feature. If an employee sees a problem on the production floor, he or she can place a red line on a similar, but completely different document, along with corrections and additional information for anyone who wants to view it. "This way, people don't keep rediscovering a mistake," says Papenfuss. "The employee can E-mail the information back to the engineering or design department to make the appropriate correction." The documents can then be put on engineering hold, while production is either given or denied viewing access.
Consilium's Couling maintains that his company's MES system "provides excellent visibility for the manufacturing history of a medical device, including traceability from raw materials through to the finished product." Couling says that the company's product is designed to reduce time to market, decrease new product development costs, cut down manufacturing cycle time, optimize manufacturing performance, improve regulatory compliance, and automate product data management and change processing. "We've had several sites report that they've gone to completely paperless operations," he says.
Another vendor who maintains that his company's software has created a completely paperless environment is Bill Atwell, president of RealVision, Inc. (Pomona, CA). "In the environment of our software, drawings, work instructions, tool lists, processing instructions, and inspection sheets can all be made available instantly through network PCs," he says. "What this means is that a company can vastly improve its productivity by eliminating the need to pass folders and papers around the shop floor. This can be critical if a change occurs on the shop floor and the manufacturer needs to prevent future units from being made with a bad or nonfunctioning part.
"Also, for complying with FDA regulations, the manufacturer has complete control over its documentation. Documents that are processed electronically always include up-to-date revisions, and the system also provides for document approval by means of electronic signatures."
Atwell helps us visualize what an advanced computer system can do for documentation, by contrasting computerized operations with the way manufacturing has been done in the past. "In the recent past, a manufacturer would use an MRP or accounting system to build a router, or work orderan itemized list of the steps required to make a component for an assembly. Together, these stepseven simple ones such as cutting stock, turning it, polishing it, inspecting it, and shipping itconstitute the manufacturing process.
"To document the manufacturing process, the company has to have a description of each of these steps, as well as any paper documentation needed to supplement the descriptions, such as blueprints. Next, the manufacturer has to prepare a process sheet that shows an operator how to machine the material, or a computerized word address program for making the part on a CNC machine. In addition, the manufacturer may have an inspection report, statistical process control documentation, and shipping instructions.
"In other words," Atwell continues, "traditional manufacturing required a lot of paperwork to be retrieved from notebooks or file cabinetsand then someone had to bring it all to the people on the shop floor.
"Now, we've allowed computer technology to replace paper completely. Instead, documents that are created electronically are tied into the existing MRP or accounting system, making an electronic router. All of the documents are then immediately accessible to everyone who needs them, enabling the manufacturer to manage the manufacturing process out on the shop floor. The entire process of gathering documentsviewing, revising, releasing, dispersing, and controlling themis handled by software."
In the past, says Atwell, MRP and accounting systems took into account such factors as time and labor, but never captured the work instructions necessary to run a job. Meanwhile, the engineering department would have an entirely different process for drawing up blueprints and manufacturing instructions, and manufacturing would require yet another set of more detailed, nuts-and-bolts information. "What all this has meant is that people have walked from department to department to convey information," says Atwell. "But when it's done electronically, everyone can work concurrently."
One user of the RealVision system is Nellcor Puritan Bennett (Carlsbad, CA). The company's senior production technician, Ray Bronoske, says the system is very helpful, "especially compared to what we had before. Now we can manage just about all our documentation. We use the system to keep track of inspection records, and also to load programs into the machinery. If someone does some editing on a machine's programming in order to adjust the process, this information can be uploaded to the software system for later reuse. There's no need to risk making a mistake when retyping changes, because they're already in the system. The software is also useful for managing the presetting of tooling prior to use, and for handling quick-change tooling. It cuts setup time approximately in half."
There's no reason to think that any of the competitive or regulatory pressures that have been driving advances in computerized manufacturing will go away any time soon. So device manufacturers will probably be faced with the need to streamline their processes even further in the years to come. Companies will continue to feel pressure to integrate their manufacturing systems with other business systems, and to make even greater use of the planning capabilities of such systems.
There will be payoffs for the use of such systemsif only in the fact that the company is able to remain in business and stay competitive. In the regulatory arena, manufacturers may find that computerized manufacturing systems are a key element in maintaining the documentation required by FDA's new design control regulations. Similarly, computerized systems can make it possible for a company to participate in FDA's new program for electronic product submissions.
In the meantime, the marketplace includes a wide range of computer systems designed to streamline manufacturing, and many include features intended especially for use in a regulated environment. Device companies may be challenged by the marketplace, but if they look hard enough they should have no trouble finding a manufacturing software package that will meet their needs.
Time to market: Indirect/direct labor ratio = 1:1
Manufacturing cycle time = 1.5 theoretical
Waste: Quality = 6 sigma
Customer service: >99%
Regulatory compliance = 100%
Safety compliance = 100%
Resource utilization: >70%
Capacity Requirement Planning (CRP). A subsystem of MRP II (see below) that enables manufacturers to plan and schedule equipment use and production.
Computerized Numerical Control (CNC). A system that permits manufacturers to control manufacturing equipment by means of data loaded into their computerized memories.
Enterprise Resource Planning (ERP). A computerized system for integrating data from throughout a company in order to improve planning activities, provide better control of operations, and enable products to get to market more quickly.
Manufacturing Execution System (MES). A real-time system for coordinating all data relating to the manufacture of products and applying them directly to shop floor activities.
Manufacturing Resource Planning (MRP). An automated system for handling information directly related to manufacturing, including inventories, bills of materials, and orders from purchasing.
Manufacturing Resource Planning II. An expanded version of MRP that includes enhanced capacity for planning and scheduling the use of manufacturing resources.