Manufacturing By Any Other Name

Once upon a time, medical device OEMs did the lion's share of product development and manufacturing. From catheters to robots, from defibrillators to infusion pumps, OEMs were responsible for the design and manufacture of their products, not to mention the sales and marketing.

Then inflation hit, and higher costs for goods and services were seen throughout the land. The manufacturers needed to find new ways to deliver the same high quality products, yet at lower cost. So the OEMs set out to find resources that would support their goals...and they found contract manufacturers. When it came to medical electronics, these contractors were referred to as electronics manufacturing services (EMS).

The OEMs and EMS providers worked hard to establish professional, mutually beneficial relationships with each other. As the EMS companies were celebrating their success, a mysterious figure came up to the OEMs and offered another alternative. It was called an original design manufacturer (ODM) and it had seen much success in the computer industry. The ODM offered the OEM original yet inexpensive product designs as well as manufacturing capabilities. And once the OEM bought the products, it could sell them using its own brand name.

Just a fairy tale? Not really. Some of the players in the medical electronics game believe ODMs are the logical next step. With consumer medical electronics, such as blood glucose meters and digital thermometers, the price point becomes a factor. The math is pretty simple: low cost for the manufacturer equals low cost for the consumer. OEMs can then spend their money on marketing and selling the product, rather than being concerned about design and manufacturing.

Others aren't quite so sure that ODMs lend themselves to medical manufacturing. One medical EMS firm prefers to "design for manufacturability," meaning that customer input is taken into full account when developing products. Designs may come from the OEM or a design house, and then the EMS company would be responsible for making the product. By definition, an ODM would bring to the table its designs from which an OEM could choose. ODMs could also offer those same designs to an OEM's competitors-or even sell the designs themselves. To many, that's a scary concept.

How does the story end? It's too soon to tell. But it's certain that the situation requires a lot of coordination and communication between OEMs, EMS firms, and ODMs so that the medical device industry can live happily ever after.

The Editors of MPMN

The editors of MPMN receive hundreds of press releases on medical device components each week. Read on for what we thought were the most eye-catching products and services that have recently come across our desk.

Ultraminiature Toggles and Pushbuttons

UV Material Dispenser

Microtooling CNC Machine

Surface-Mount EMI Filters

Self-Sealant

Sneak Peek: Electronics Outsourcing

In recent years, electronic assembly houses in the United States have lost business to Asian companies, especially with high-volume, low-margin electronics, such as consumer goods. Yet when it comes to the manufacture of medical electronics, jobs tend to remain stateside. Savvy EMS industry leaders have, quite understandably, begun marketing campaigns to get medical device OEMs as customers. Read more ...

Read more about electronics outsourcing in the April 2005 issue of MPMN.

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