The Shared Vision that is Contract Manufacturing
When Two Become One
Choosing a contract manufacturing partner is by no means a decision to be taken lightly by any OEM, big or small, in any part of the world.
The medical device industry is one of the most competitive and technically challenging industries, where constant innovation is critical to remain one step ahead of the competition. This is the reality for medical device manufactures big and small, established, and emerging.
We are increasingly seeing OEMs looking to partner with contract manufacturing organisations to assist in the delivery of the real and highly advantageous benefits that can be attained. In the past OEMs turned to contract manufactures for outsourcing labour and manufacturing, but in today’s environment the pressures of cost, constant innovation, growth, quality, and capability means that OEMs are now looking to develop long term partnerships from even the very early stages of product conceptualisation.
Picking the right contract manufacturing partner is no longer just about quality, finance or strategic fit but geography and strategic positioning in an ever-growing global market. We are seeing an increasing degree of integration with external partners because they can help OEMs become more agile, more flexible and more responsive to customer needs – all elements that improve the end to end supply chain. Contract manufacturing partners can bring OEMs much closer to their customers, regionally, national and globally. A healthy and efficient supply chain supports the acceleration of innovation within OMEs, increases capability and speeds up the product commercialisation process.
Choosing the right partner is critical
In many instances, the decision to work with a contract manufacturer is made at the product development phase. Given the initial OEM and partner investment required and associated set up costs, once it’s made, the relationship usually lasts for the entire life cycle of the product. For this reason, choosing the right partner is critical and a decision not to be taken lightly.
From an economic perspective, industry analysts and leaders say the rising cost of getting a product to market in this highly regulated industry, means more and more OEMs are outsourcing at the design and development stage. In the USA for example, regulatory costs can run in the tens of millions of dollars and most truly innovative or new to world concepts must go through a premarket approval phase, before any FDA approval has been sought. It can often end up taking years to launch a new device in the US market as a result and given this significant investment of time and money, choosing the right partner is vital. Having complete confidence and trust in a partner is indispensable to OEMs as the expertise provided helps reduce costs and decreases the timeline for product development, pilot testing and commercialisation.
The contract manufacturing selection process
There are many considerations OEMs must evaluate in their journey to select a preferred contract manufacturing partner and its important much diligence is put into the selection process.
The commonality throughout the entire process relies on two very significant terms – relationship and partnership. And this is a two-way stream, between the OEM and the contract manufacturer.
The contract manufacturing partnership
Building and maintaining a relationship takes time and effort from both parties. Clear commitment and investment from both organisations are the roots to success in 21st century contract manufacturing partnerships.
Closeness to customers is key
To serve a global customer base OEMs need to build outsourced partnership models that cover their entire geographic reach. This means selecting a partner that has multiple strategic manufacturing locations. Such an example might be a US based OEM looking for a partner to service Europe and the Americas. The strategic positioning of the potential partner is key. A hub in Europe will be critical to ensure continuity in this market and areas such as Ireland or Germany might be favourable for a host of reasons such as, closeness to key customers and highly skilled resources. The same OEM will reap great financial and operational rewards by selecting a partner that has a similar facility or capability in North America for example. While regulatory requirements within the markets may differ, they can all be managed under a single agreement, under a single contract and by one key partner.
There are many considerations faced by OEMs in selecting a partner and this is by no means a simplistic process. However, if the process is completed with a clear and defined set of criteria that is fully transparent, it can be the start of a very rewarding relationship for all parties involved.
There are several key pieces of advice that OEMs looking to enter into a new outsourcing partnership should consider and while some are givens, there are key differentiators that are a must for success.
It is this differentiated model that Advant has built its success upon over the past 25 years.
1. As the nature of medical device partnerships are predominately long term it’s important to find a partner that has a common focus with regard to company culture, and values. Choose a partner that fits with your ethos to ensure a long and fruitful relationship.
2. Quality in today’s highly regulated industry is a must, so much so its industry norm and goes without saying.
3. If you are to build a sustainable relationship that develops into a seamless process of interaction, reliability is key. Both parties need to have complete trust and confidence in each other’s capabilities, processes and structures.
4. Trust is the key to success in any relationship! Trust between the two parties will generate value that goes beyond cost reductions. Trust is driven by transparency and accountability and this is a two-way street.
5. Technical ability, similar to quality is paramount. Research products the preferred partner have commercialised. Request customer testimonials or permission to contact an existing customer. It is important to select a medical contract manufacturing partner with proven experience in the specific technologies that your project requires. This ensures that the engineering and development teams who are the builders, makers and testers of your product, have the technical expertise required. If your product is a new to world concept, look for similarities and a proven innovation centric approach.
6. A proven and robust quality system will provide benefits to all parties involved. OEMs should seek demonstrated records of compliance with processes for both traceability and documentation. Performing a quality system audit of the preferred provider will give an accurate picture of the management’s commitment to process driven manufacturing. Some areas OEMs might consider may include:
- Lean Six Sigma Product and Process Development
- Risk-Based Validation – ISO 14971
- Technical File and Design Dossier Submission Support
- Integrated Quality System and Change Control
- ISO 13485: 2012 Accredited Quality System
- Comprehensive Supply Chain Management
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7. Conduct an informal site visit and bring your quality reps along. There is no better way to get a true measure of a business than an old-fashioned walk through. Meet the quality and senior management teams. Chat with people in the production area if you can. Look at their equipment, the cleanliness of the facility, and stock in the warehouse.
8. Ensure the ability to scale up or down based on your requirements. A good contract manufacturing partner will have the ability to seamlessly scale up or down production based on your requirements.
9. A shared sense of urgency is one of the key signs of the most suitable contract manufacturing partner. OEMs want a partner that will take as much ownership of the product, production process and commercialisation as they do. Do they answer the phone whenever you need to reach them, even if you’re calling at night or over the weekend? A contract partner that cares as much about a customer’s product is unique, and should certainly not be looked over. If they care, they share your vision for success.
10. A manufacturer with strategic locations is a must. Where is your market compared to where the manufacturer is located? Choose a partner that can support your requirements in your home market but also provide access to global markets. For example, a USA based OEM should have a contract manufacturing partner strategically located in one of Europe’s Medical Device hubs. This is especially beneficial for emerging companies, when often it is more economically advantageous to initially launch a new product in Europe due to less stringent and costly regulations when compared to the USA.
There is no doubt contract manufacturing is becoming the preferred choice for many OEMs operating in today’s increasingly competitive medical device industry. It’s a long term, year on year strategic relationship. Evaluation will be rightly so a lengthy process and when numerous providers tick all of the ‘technical and operational’ boxes it all boils down to an instinctive gut feeling. You need to have a good feeling about the team and you must be able to trust them. When things go wrong, you need to know without a doubt that they will do the right thing. Your entire brand and the future of your company will depend on it.