Medical Device Link.

Originally Published EMDM September 2003

SPECIAL REPORT: ELECTRONICS OUTSOURCING

Outsourcing electronics design and development can provide device OEMs with a competitive advantage by accelerating time to market.

More than ever, companies are defined by the novel products they create. New product introductions and next-generation devices represent a firm’s value to the market. Electronic subassemblies are critical to that value, and that is one good reason for OEMs to consider outsourcing their development and fabrication. 

“Electronics design know-how once was something that differentiated a medical device OEM from the competition,” says Jonas Weiland, medical strategic marketing manager for AMI Semiconductor (AMIS; Oudenaarde, Belgium). Today the differentiator is often an OEM’s sensing technology and the therapy it administers, according to Weiland. “The value OEMs have to the market is really in what they’re trying to do, rather than the electronics they’re trying to develop.”
Chris Newman, vice president of sales and marketing for Advanced Input Devices Europe (Eastleigh, Hants, UK), adds, “There’s emphasis on the part of the OEM who manufactures the host device to devote more resources to expanding that capability within its own organization.” 
Outsourcing can help support OEMs in such efforts. In this Special Report, a number of full-service electronics suppliers share insights on what device OEMs are asking of them and why. 

More Involvement (and Earlier, Please)

Ever-increasing device sophistication, in large part, is driving some OEMs to expect more options from their electronics outsourcing partners. In some cases, these options extend beyond manufacturing to contract design and engineering. 

“Contract manufacturing has been outsourced for many years now,” says Paul O’Hagan, operations manager for EDS Ireland Ltd. (Newry, Co. Down, UK), a consultancy for advanced electronic products. “Contract design,” O’Hagan adds, “is a very attractive proposition, especially for start-ups. It allows companies to concentrate on marketing and sales of their product without the worry of development time scales, costs, or engineering overhead.”

Recent contract design projects at EDS Ireland have included medical applications in the areas of ECG and EEG, according to O’Hagan. Contract services for these particular projects involved “the complete hardware design for one application” and software design—a DSP embedded system—as the primary remit in the other, he says. 

O’Hagan also points out that when such projects are completed, device OEMs still have access to engineering support, but without paying for a full-time engineering staff. 

Outsourcing may also provide firms with a competitive advantage in the marketplace. “By accessing an auxiliary engineering team that has considerable experience, [device companies] can accelerate time to market,” says Newman of Advanced Input Devices. “As most companies are aware, being out there amongst the first with the best products is really important to the overall success of the organization,” Newman adds. His company provides OEMs with control panels and user interfaces for medical applications including medical imaging and patient-monitoring equipment. 

Some subcontractors are broadening their services to shore up their clients’ overall product development strategies. Trivirix International (Belfast, UK), for example, has expanded its capabilities beyond manufacturing. Tom Larrichio, Trivirix vice president of business development in Durham, NC, USA, says, “Over the last couple of years, the market has told us we need to provide more engineering service capability even earlier in the process.” 

While subcontract manufacturing of medical electronics remains Trivirix’s core business—“We’re manufacturers first; that’s what we’re experts at,” says Larrichio—the company sees significant value in being able to do more. “It’s not mandatory, [but] we think it’s important,” he says, pointing out that most of Trivirix’s customers are equipped to do their own engineering and product development. Still, he says, they like knowing that their partner can give them early-stage assistance should they need it. 

What about Wireless?

Wireless connectivity is foremost in the minds of many OEMs, but some questions remain. Safety and efficacy issues, in particular, are often evoked. However, the technology’s potential to optimize patient monitoring and other applications where accuracy and mobility are key seems to be winning many converts.

“We’ve seen a gradual increase both in inquiries [about] wireless projects for medical applications and their realization,” says EDS Ireland’s O’Hagan. “A significant amount of our consultancy, contract design, and IP licensing is specifically geared toward the development of wireless technologies for medical device [firms] and other OEMs,” he says. 

AMIS is also working to satisfy medical manufacturers’ demands for wireless solutions. The developer and manufacturer of application-specific integrated circuits (ASICs) offers its ASTRIC (application-specific transmit and receive IC) system-on-chip (SOC) transceivers for implantables, hearing aids, and portable monitoring applications. According to AMIS’s Weiland, “The series of ASSPs (application-specific standard parts) is specifically targeted for easy SOC integration” and features “low-power voltage.” 

Very-low-power components, Weiland says, are ideal for implantables. “We have a low-power RF Sniff Mode, meaning we can start up the circuitry and monitor the channel,” he explains. “Let’s say you need to listen to the channel 10 times a second. Our device can wake up, monitor the channel, and then close down in considerably less than 100 milliseconds. You can do it at 10 times a second so your device will be on a total of a millisecond every second, meaning that your average power consumption now will be just one-thousandth of your continued power consumption if you have it on all the time. That’s one of the things that makes our device very useful.”

Moreover, Weiland says, having an ASSP means the OEM can actually debug its system by using AMIS’s discrete devices. “And then we can build this core into the system on a chip ASIC,” he says. 

Roughly half of AMIS’s approximately 180 mixed-signal design engineers are in Europe, providing significant opportunities for European medical device manufacturers. “We’re very strong in Europe,” says Weiland. “[With regard] to what we can offer the European device manufacturer, we have, for example, a combination of a small-geometry process down to about 0.35 µm combined with high-voltage capabilities. We can combine, for example, 0.35-µm digital logic and up to 80-V capability on drivers, and that opens up a lot of possibilities.” 

Possibilities for the medical industry are what wireless is all about, according to Larrichio. Trivirix recently worked on a breast-cancer detection device that uses an RF-type approach to transmit the signal from the patient to the machine to the computer. “There’s a lot of talk about a wireless operating room,” he says. “What we see in the future, and a lot of large companies are working on this, is to have all equipment in an operating room set up and operating from a wireless [basis].”

Toward Quality Management

Harvey Rudolph, global program manager of medical devices for Underwriters Laboratories Inc. (UL; Northbrook, IL, USA), reminds OEMs that their out-of-house manufacturing “partners are really suppliers to them under the [quality system] regulations.” Thus, OEMs must ascertain how best to demonstrate control over a subcontract manufacturer’s activities. 
Rudolph’s colleague Steve Buxton says that “the trend is toward quality management systems that demonstrate a level of confidence in a subcontractor’s ability to consistently produce safe components for the final device.” The conformity assessment manager for Guildford, Surrey–based UL International (UK) Ltd. adds, “testing is never going to go away; it’s always going to be an integral part of showing that products are safe and perform as intended. But the global compliance market is shifting. About 60% of all activity is now quality management system based, leaving testing at about 40% for medical devices.” 

SMTEK Europe Ltd. (Craigavon, Co. Armagh, UK), a provider of integrated manufacturing services, operates a quality management system according to ISO 9001:2000. The new standard is an improvement over its more-theoretical predecessor, ISO 9002, according to Paul Kavanagh, SMTEK’s sales and marketing manager. “The new standard is more practical and more focused not only on what you’re achieving, but also on whether you have continuous improvement processes in place in your facility.” It fits well, he says, with SMTEK’s continuous-improvement ethos. 

Device companies today, defined less by complex electronics than by the novel devices that house that circuitry, are finding more than enough reasons to outsource. By securing electronics manufacturing, sometimes even design assistance, externally, OEMs are reaping valuable expertise in an ever-changing, always challenging environment. Perhaps most importantly, they are freeing up in-house resources that enable them to focus on the new and next-generation products that are their true value to the market. 

Copyright ©2003 European Medical Device Manufacturer