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Cover Story

Medical Device Manufacturing: Supplier Opportunities

Medical Device Companies Looking For Contract Manufacturing And Outsourcing Partners

Today many medical product companies are outsourcing more of their operations to subcontractors. Opportunities for the Contract Manufacturer in the Medical Devices Sector highlights opportunities created by increased technological complexity in product development, opportunities for foreign contract manufacturers, and opportunities created in an expanding market-including new uses and the convergence between the medical devices and pharmaceutical industry. Globally, the medical-device contract manufacturing market is growing about 12-15 percent a year, much faster than the 8-9 percent growth in overall medical manufacturing.

The decision by an OEM to use a contract manufacturer is based on many criteria that need to be balanced – cost (labor and overhead), access to technology, and focus on core competencies .

A clearly articulated strategy defining where to focus outsourcing and where / how to leverage outsourced capabilities.

Carefully – structured and proven processes for identifying, evaluating, selecting, and managing partners.

CSOs (Contract Service Organizations) are defined as entities organised to serve the medical device industry and encompassing the following contracted functions:

  1. Research

  2. Design

  3. Development

  4. Engineering, specialising in biomedical (with sub specialities in process, product, quality, facilities, equipment, tooling…)

  5. Software providers; programmers (product or process)

  6. Quality systems

  7. Statistical analysis/systems

  1. Regulatory (including product submissions and / or responses to regulatory agencies)

  2. Testing (labs, bench, standards, verification, validation…)

  3. Clinical trials

  4. Calibration

  5. Packaging

  6. Sterilization

  7. Industry – specific consulting

The key success factors is contract manufacturing relationship include trust, good communications, a “Partnership Mentality,” and flexibility (on both sides).

Opportunities For Suppliers :

The medical product manufacturing industry offers market opportunities for many supply industries. The industry is innovation driven and is looking to develop new products for existing and new markets.

Sometimes it means production shifting to low-cost locations.

The US medical device firms have moving beyond labour costs in Mexico and Puerto Rico and are considering China for lower material costs or India for lower development costs.

But other times it means opportunity, as medical-device manufacturers increasingly look to shift manufacturing to their subcontractors, including injection molders and other processors. Many of them, in turn, are upscaling and updating their capabilities.

In one of the surveys covering European Medical Device Industry, the following areas were identified wherein the industry is looking for new suppliers :

  • Manufacturing

  • Injection moulding and extrusion

  • Testing

  • Clinical trials

  • Design

  • R&D

  • Coating/surface treatment

  • Logistics / distribution

  • Calibration

  • Analytical services

  • Packaging of products

  • New materials / equipment

  • Components / production of components

The Indian Industry has also showing growing trends in some of the areas like : Manufacturing, Injection moulding and extrusion, Testing, Calibration, Analytical services, Packaging of products, Components / production of components etc.

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