Medical Device Link.

OUTSOURCING GUIDE

The med-tech industry faces some unique challenges. A steadily ageing population is creating unprecedented demand for innovative healthcare products, and continuous technological breakthroughs are making more next-generation products possible. Tremendous growth opportunities exist for manufacturers. On the other hand, pricing pressures, reimbursement issues and spiralling manufacturing costs can stifle the innovation that consumers and healthcare providers have come to expect from the med-tech industry. Manufacturers must find more-effective ways to compete—full-service outsourcing is one means to that end.

Full-service outsourcing encompasses all phases of device development and manufacturing, from product design and regulatory compliance to manufacturing and even after-sale servicing. This business model has become standard practice in the automotive industry during the last decade, and medical device companies are following suit.

As the outsourcing model matures and the number of quality outsourcing partners increases, companies are beginning to realise the gains in innovation and productivity that a well-planned partnership can bring. The most effective partnerships, in my opinion, are those that involve a one-stop outsourcing solution. Here’s why.

Medical-technology projects are becoming more and more complex. Detailed knowledge is required in a vast number of disciplines. Electronics, software, mechatronics, sensors and materials science are but a small sample of the technologies that are routinely used in medical equipment. Maintaining a knowledge base of this magnitude in-house is not feasible. Now more than ever, medical device companies must work faster and smarter . . . and with fewer resources. Calling on a third party to fill knowledge gaps as they reveal themselves is a better alternative.

The importance of making sure that your partner has appropriate certification and a history of working with medical technology companies cannot be overstated. For instance, I would argue that it is essential that the partner be certified to ISO 13485:2003.

I am reminded of one company that hired various freelancers to develop medical software. The programmers were unfamiliar with the regulatory requirements and, long story short, the product failed to receive US FDA approval. The company restarted the project and, this time, outsourced the development to an experienced ISO 13485–certified company. It could have saved itself a lot of time, resources and aggravation if it had taken that approach initially.

Design-to-cost methodology is a valuable cost-control tool that puts expenses on an even keel with other design and development parameters. It is an established technique for finding the most cost-effective technical solutions during the development process. A full-service provider with in-depth knowledge of this technique can help its customer achieve a rapid return on investment.

Time to market can play a vital role in a product’s commercial success. Medical device manufacturers are accelerating new product development and diligently seeking ways to bring their products to market faster than their competitors. And yet, delays in product launches are common for companies that have overextended their outsourcing relationships. Poor coordination, miscommunication and missed deadlines can be avoided by partnering with a one-stop shop.

A well-planned full-service outsourcing partnership also pays dividends in the long run. Let’s say your product is a runaway success and demand exceeds your expectations. Rapidly ramping up production in-house might require a significant capital investment, and those resources may be better spent investing in new product development.

In sum, coordinating the activities of multiple firms can be cumbersome. Choosing a single-source supplier of contract services simplifies coordination and centralises the technological and financial risks. Meanwhile, you can focus on what really matters: innovation!

About the Author

Karsten Sassenscheid
A graduate of the University of Würzburg, where he received a PhD in physics with an emphasis in optical systems and sensors, Karsten Sassenscheid served as project manager and head of department at the Fraunhofer Institute and contributed to numerous R&D and outsourcing projects before joining seleon GmbH in 2007. He is responsible for outsourcing and partnering activities involving medical technology companies. Seleon (www.seleon.de) was founded in 1998 as a spin-off from the German University of Freiburg. Today, the company employs 120 people and operates three business units devoted to product development, software and manufacturing.