Outsourcing is booming in the medical manufacturing sector. The global medical device outsourcing market was valued at $33.2 billion in 2016 and is expected to grow 11.5% CAGR through 2025, according to a market report from Grand View Research. Contract manufacturing, which includes plastics processing services such as injection molding and extrusion, is tagged as the fastest growing service within the medical device industry. So it’s no surprise that medical device OEMs are avidly seeking expert guidance on the effective sourcing of suppliers both domestically and globally. They will find that and more during a panel discussion devoted to global manufacturing and the supply chain at the co-located PLASTEC East and MD&M East event in New York in June. Jason Lau, a manager in the Medtech Insights division at Decision Resources Group (Toronto), will moderate the conversation; he took time to share some advice with PlasticsToday readers in advance of the event.
Outsourcing operations can help OEMs to accelerate product introductions and reduce costs, but those benefits can be onerous if all aspects of the potential partnership are not carefully considered. Scrutinizing a supplier’s financial stability, reach and capabilities is an imperative, said Lau, but is not sufficient.
“OEMs need to very carefully vet suppliers by making sure they share the same mission and values, which ideally is a strong commitment to quality and to the end users (their customers),” explained Lau. “By not conducting this part of due diligence, suppliers can become the root cause of problems that OEMs end up taking the blame for later. OEMs are also customers in the supply chain. Finding a supplier that quotes a fair price, that you can work well with and that you can trust will be better, in the long run, than working with an unreliable supplier at a lower cost.” One outcome of strategic sourcing should be a reduction in cost, recognized Lau, but this should be a byproduct of obtaining good value rather than the result of a single-minded pursuit.
The importance of quality can’t be overstated when the end product is a potentially life-saving device. For that reason, Lau recommends sourcing suppliers that have specialized knowledge of medical device manufacturing. That builds confidence in the supplier’s understanding of the quality and regulatory standards at play in the industry. The supplier also should possess the operational scale and versatility that will enable it to tackle the unique challenges that come with advanced technology. One bottom-line requirement, he added, should be certification to ISO 13485.
OEMs also need to be demanding when it comes to meeting specifications. “The more resolute you are with your specifications, the easier it is to set clear expectations,” said Lau.
Lau will moderate a panel discussion—Global Manufacturing and Supply Chain Challenges: Sourcing in Asia versus the Pacific—at 2 PM on June 15 at the co-located PLASTEC East and MD&M East event in New York City. The panelists include Ames Gross, President, Pacific Bridge Medical; Rosemary Coates, Executive Director, Reshoring Institute; and Benazir Premji, Market Research Analyst, Decision Resources Group. For more information and to register to attend, go to the event website.