Medtech Companies are Outsourcing More Than Ever and Here’s Why

OEMs are facing a continuous headwind of expectations to innovate faster, reduce their manufacturing footprint, grapple with ever increasing regulatory hurdles and reduce costs. Also, functional expertise is no longer internal for certain manufacturing processes. CMOs are investing in innovation to provide better solutions. CMOs help speed up projects by leveraging infrastructure and know-how. Finally, CMOs must fully understand comprehend the ever-changing quality and regulatory environment.

What are the benefits of outsourcing your medical device manufacturing? Here are some of the key elements:

1. Speed-to-market. Outsourcing can improve service delivery, and the reduced-labor costs listed above can also bring the advantage of speed-to-market. CMOs enable R & D teams to create multiple workstreams.
2. Cost reduction. As we have discussed, CMOs can reduce costs in medtech manufacturing. For example, the CMO might have captive facilities where leveraging existing equipment and engineering resources help lessen the investment and manufacturing cost. CMOs often have resources and depth of experience to optimize design for manufacturing where OEMs might be limited. – All of this creates a better product, often faster and usually at a lower cost.

Lowering Risk. In the device manufacturing space, change is constant, and patient safety/regulatory compliance risks are ever-present. Given the realities, both FDA & ISO Quality System requirements mandate risk analysis and risk mitigation throughout the development process. A robust contract review performed by the CMO is most effective way of meeting customer standards and requirements. If the CMO does not clearly understand the expectations, quality is compromised at the very start of the project. Executing an effective NPI (New Product Introduction) process in compliance with global device requirements will also resolve the vast majority of quality concerns and minimize risk during process development. Following a clear, methodical, and robust design control process up-front will prevent lots of tears and anguish when the production machines are turned on.

3. Specialization. With reduced cost, innovation and a labor force dedicated to creating just for the OEM, the CMO becomes another arm within their organization. This allows the OEM to focus on other go-to-market factors while the CMO handles the production and to develop a solution for manufacturing.
4. End to end value. CMOs do more of the work for the OEM by eliminating the waste of shipping parts from one site to another while also managing activities such as: assembly, packaging, and labeling/UDI. OEMs are also asking CMOs to manage the sub-0supplier supply chain (as opposed to receiving approved materials per the OEM Approved Supplier List).

If due diligence is done and those factors considered properly when determining a CMO, then the CMO can become a direct extension of the OEM’s operation. When both sides have done their homework and invested the required effort in building a partnership, the OEM has the unique ability to make a significantly lower-risk make-buy decision.

Here are a few of the key attributes an OEM should consider:

• Track record. What has the CMO done before and have they been successful? This attribute is usually the best indicator for future success.
• CMO integrity and transparency. When considering a CMO, ask the following questions:
  • Can the CMO effectively work in an open, honest, and frank relationship?
  • Can the CMO demonstrate how they have learned from previous mistakes?
  • Is continuous improvement merely a slogan, or is it built into the company’s DNA?
  • Has the CMO received good or even better excellent quality score cards from their current customers?

Flexan has been offering a wide variety of molding and extrusion capabilities utilizing rubber, silicone and thermoplastic materials for OEMs for years. Recently, we worked with an OEM that is a top-30 medical device manufacturer and they were looking to transfer more than 140 implantable Class-III custom silicone implantable components to a tightly controlled production environment while ensuring continuity of supply and quality standards. The entire “lift-and-shift” project would involve an aggressive timeline to get the job done quickly. The ultimate goal was to create a mirror image of manufacturing floor as well as process (both operations and quality) of the OEM at the Flexan facility.

Flexan was responsible for installing and validating a complex, state-of-the-art proprietary manufacturing system developed by the OEM. Our experts used our technical expertise in equipment and software validation to assemble a team to conduct a risk assessment, develop software requirements, and propose a validation solution. Flexan successfully transferred and validated the customer-owned equipment and supporting software without a timeline slowdown or supply chain disruption.

Our comprehensive contract review and manufacturing transfer processes ensured all project and product requirements were documented, corrected, and transferred properly. We structured efficient parallel documentation, review and approval processes to streamline the validation process in keeping with the very strict timeline needs. This shortened the validation time from five weeks to two and the documentation reporting review process from seven days to just one.

Throughout the course of the project, Flexan:

• Transferred and validated more than 20 unique pieces of equipment and over 200 molds.
• Duplicated all fixtures and inspection equipment.
• Successfully transferred all components to our production team, which allowed them to supply two OEM plants simultaneously.
• Transferred assembly operations with no interruptions.

Projects this large always have unexpected problems which could upset and delay the entire project and bring financial and operational issues. However, at Flexan, we use a detailed project management system to spot potential issues early, allowing the team to create rapid responses. This allows us to take action fast and minimize the disruption to the timeline.

By the end of the project, Flexan had validated:

• 31 subassemblies
• 26 extrusion part numbers
• 65 molded part numbers
• 15 special process part numbers
• 70+ backup molds and fixtures

Over the years, Flexan has demonstrated the ability and gained the experience to use our entire organization to create the most cost-effective processes possible for projects large and small. Key capabilities Flexan brings to any project include:

• Integrated Quality Assurance throughout the phase-gate project plan, with metrics and gates to identify issues early on, to minimize additional cost and delay.
• Commitment to work with multiple customer sites and functional/leadership structures to ensure that we meet project goals.
• Dedicated personnel and processes to effectively resource a project and to achieve tasks per the commitments of the project timeline.
• Experience in proactively designing a clear, methodical, and robust design control process to prevent last-minute challenges prior to production.
• History of effectively managing the logistics for raw material, supplies, and equipment to manage to the timeline.

If you have a project and need experts with the skills Flexan brings to the table, we’re ready to listen. Contact the experts at Flexan today.