Medical Device Link.

GUIDE TO OUTSOURCING EDITOR'S PAGE

When most OEMs begin outsourcing projects, they consider what functions they would like to outsource. Typically, this involves first identifying what an OEM feels its core competencies are, or what processes it would like to keep in-house. Once a firm knows what it wants to outsource, it can begin the process of supplier selection.

However, equally important to a successful outsourcing project is how an OEM will manage the outsourcing project. Supplier selection is clearly significant, but companies that want to get the most value from an outsourcing project will have a methodology in place for managing the outsourcing relationship.

“This concept is not complicated, and it’s not a big secret,” says Michael Verstegen, senior vice president of global market development at Plexus Corp. (Neenah, WI). But it can be important, especially when OEMs choose to outsource complex functions.

For example, says Verstegen, some fairly simple outsourcing relationships, such as raw material procurement, can be boiled down to a document or a part number. In such cases, you can communicate with your supplier without a lot of documentation. “But for outsourcing complex processes, such as medical device manufacturing or engineering, you need an infrastructure and a methodology,” he notes.

“Complex functions require complex relationships,” he continues. “Good outsourcers will ask detailed questions.” Therefore, you need to ensure that your company is prepared to be a good partner in the relationship.

“OEMs should recognize that they are buying a service and that they need to have a solid relationship with their partner.” In a truly complex outsourcing relationship, he says, there is always a number of personnel at both the OEM facility and the supplier facility that need to be in touch about the project. “There may be several people on each side, from management to technology, engineering, etc., that need to be in contact.”

And, if OEMs understand the unique nature of buying services from a supplier, they can build an internal outsourcing methodology that enables them to choose the supplier that best fits their needs.

“It’s very important that OEMs do extensive searches to find suppliers that can meet their true needs,” explains Verstegen. The decision shouldn’t be made based only on each company’s current capabilities—rather, it should be made by comparing the two organizations side by side, he advises. Use this comparison to determine whether you and your supplier are a good fit strategically and culturally.

There are certain aspects of this comparison that seem obvious. For example, the supplier should have experience and expertise in the medical device industry, and it should be able to pass a rigorous quality audit. But it’s also important to look at the intangibles, says Verstegen. “Make sure that supplier wants to be in the device market for a long time. Make sure it speaks your language, meets your standards and volume requirements, and fits your geographic needs.” The value that comes from choosing the right partner is worth the extra effort.

Erin Bradford for The Editors