Medical Device Link.

Originally Published EMDM March/April 2005

Industry News

Driving through Shenzhen in southeastern China, one can’t help but notice a massive Wal-Mart store roughly the size of Belgium. It’s a fitting landmark.

Like the giant US retailer, Shenzhen has profited from the combined forces of globalization and outsourcing. Deng Xiaoping established Shenzhen as China’s first special economic zone in 1978 to compete with Hong Kong, which was still under British rule at the time. An influx of foreign investment and the global boom in outsourcing radically transformed the area. The once-sleepy fishing village has ballooned into a sprawling urban centre with a population of more than 4 million people.

Mass production of commodity products—the sort of items that Wal-Mart peddles so successfully—has been the region’s industrial bedrock. Subcontracting for the med-tech industry has been a marginal activity, at best. But something is in the air. A handful of local companies have thrived by supplying products and services to global medical device OEMs. A medical manufacturing trade show, modelled after the successful MEDTEC event in Stuttgart, Germany, will debut in September. And med-tech outsourcing firm Avail announced in January that it was breaking ground to build a production facility in Shenzhen.

Nevertheless, many med-tech firms openly wonder about the ability of Chinese vendors to comply with global quality system requirements. Those concerns are either rooted in reality or vastly overstated, depending on who you ask.

“China does not presently enjoy a reputation for high quality,” says James Stout, a quality systems consultant based in Hong Kong. “ISO certification is generally discounted in China, and, indeed, in many parts of Asia.” Because of this, most Chinese medical device contract manufacturers are limited to the manufacture of Class I or fairly simple Class II devices, notes Stout. Things are changing, however. As foreign-based OEMs increasingly adopt ISO 13485:2000, Stout believes that some local suppliers will also make the leap as a matter of survival. Those who don’t will disappear from the radar of med-tech OEMs. “There will be a shakeout,” explains Stout.

Quality Biomedical Manufacturing produces tooling and components for orthopaedic, surgical, and other medical applications.

If there is a knowledge gap, it’s not a Chinese problem, counters Sean Lundy, president of Quality Biomedical Manufacturing (QBM), a supplier of moulding services and associated tooling with production facilities in Shenzhen. “The gap exists in the minds of Western medical device OEMs. Many of them are ill-informed when it comes to the level of compliance in China, he says. “It’s rare to have a customer visit our factories for a quality audit and leave with any lingering quality concerns,” says Lundy. If they do, Lundy has a suggestion. “Try out QBM with a project where quality issues are minimized but where the economic value is maximized.” He cites the design and construction of a moulding tool as a good confidence builder. The mould can be built for a fraction of what it would cost in the United States or Europe, and delivered in half the time, he claims.

QBM currently manufactures tooling and components for orthopaedics, dentistry, surgery, gynecology, urology, imaging, and plastic surgery. Disposables account for most of the output, but the firm also manufactures capital equipment and assemblies for med-tech OEMs. The firm offers cleanroom assembly and packaging, and it recently finished installing a 1500-sq-ft cleanroom that will be used exclusively for medical device assembly. A separate Class 100,000 cleanroom dedicated to moulding medical silicone products is on the drawing boards.

If the Ford Motor Co. hadn’t made “quality is job one” its catchphrase, it would perfectly describe the prevailing ethos at Automatic Manufacturing Ltd. (AML). Headquartered in Hong Kong with five manufacturing facilities in Dongguan, north of Shenzhen, AML is zealous in its commitment to quality systems.

Focusing on design and manufacturing subcontracting for medical electronic and healthcare products, AML is certified to ISO 9001, QS 9000, and ISO 13485, and it is registered with US FDA and China’s State Food and Drug Administration. The company has also adopted six-sigma practices.

To instill its values in the workforce, the firm has initiated a corporate university in association with local universities. “Last year, more than 2000 people took courses,” notes president and CEO John Mok with pride. One of the recent core sessions dealt with intellectual property protection. “This is a topic that we want our staff to fully comprehend,” says Mok. To date, the university has offered more than 200 training programmes.

An integrated one-stop shop for medical electronic products, AML offers services that range from product design and mould making to part moulding and cleanroom assembly. If desired, the firm’s design assurance department works with in-house R&D staff to improve product designs and build in safety features. The firm received the 2004 Hong Kong Grand Award for Quality from a group representing members of industry and public officials.

OEMs sourcing subcontractors in Southern China soon will have another option when Avail (Fort Worth, TX, USA) finishes construction of a manufacturing facility in Shenzhen. The plant is scheduled for completion in the third quarter of this year.

Describing itself as a one-stop shop for medical electronics, Automatic Manufacturing Ltd. provides everything from product design and development and mould making to contract moulding services and cleanroom assembly.

A wholly owned subsidiary, Avail China will focus on the production of finished single-use medical devices for OEMs worldwide. Its quality systems will mirror those at the company’s other facilities around the world. “Finished goods outsourcing is expected to grow at twice the rate of the medical sector through the end of this decade,” notes Avail president and CEO J. Randall Keene. “This kind of growth requires the medical device outsourcer to provide customers with alternatives in terms of capabilities, locations, continuous process improvement programmes, and low-cost opportunities.”

Listening to customers also led Canon Communications llc, which publishes EMDM and organizes the MD&M shows and conferences, to launch MEDTEC China in Shenzhen. Debuting 13–15 September, MEDTEC China is sponsored by China Medical Device Manufacturer (CMDM) magazine and has the active support of the China Association for Medical Devices Industry. To learn more about MEDTEC China, go to www.medtecchina.com. The current issue of CMDM and information about the publication can be accessed on-line at www.cmdm.com.

Copyright ©2005 European Medical Device Manufacturer