The Essentials of Medical Device Outsourcing
1. Lower Initial Investment
For medical device companies, a key benefit of outsourcing is that they don’t have to make a significant investment in facilities, equipment, and people before their product has even launched. This may go without saying, but the risk of all that investment before the market has accepted can be substantial. As a result, if the initial start-up costs are too high, a new medical device may not even see the light of day.
2. Speed to Market
Speed to market is also a key consideration when choosing to outsource to a contract manufacturer. For an Original Equipment Manufacturer (OEM) to build everything from scratch and make sure everything is validated can take months to years. Contract Manufacturers on the other hand, already have cleanrooms set up and production lines established, greatly increasing their service delivery and giving them a marked competitive edge.
Furthermore, they have expertise in efficiently assembling a variety of medical devices. This know-how, combined with technology and production equipment, can be applied to the production of new devices without a steep and time-consuming learning curve. For a medical device OEM, reduction in the time to market can make all the difference as they can quickly burn through start-up capital
3. Only Pay for What You Use
When an OEM outsources production to a contract manufacturer, they only have to pay for the time and resources being used when their product is in production. In essence, they are renting space and time when their device is being assembled. Idle production lines and wasted overhead are not an issue.
We frequently hear from clients that they appreciate not having to worry and feel pressure about unused capacity, as well as not going through the challenges of having to justify the investment in equipment and facilities that aren’t running 24/7. We remove that burden from them.
4. Production Expertise
Another benefit is that contract manufacturers who specialize in medical device packaging and assembly have the unique knowledge and technical expertise to produce these items most efficiently. Through years of practice, they have a broader reservoir of experience to draw from because they work with many kinds of devices, and the production insights from each one can inform the other. For an OEM who doesn’t have a wide breadth of products, it is very difficult to learn the nuances required to optimize production efficiency and keep costs down.
5. Regulatory Understanding
Medical device packaging and assembly require strict adherence to specific FDA and ISO regulations to ensure quality standards and safety protocols. An experienced contract manufacturer should be well-versed on all the current packaging, labeling and sterilization regulations.
However, if an OEM decides to manage the entire production in-house, they should be aware of things like:
● Packaging validation testing
● Primary and secondary label requirements
● Sterilization requirements
● ISO standards
Many times, this is too intensive for companies who want to focus on their primary strength, which is designing and engineering medical devices. Packaging, assembly, and sterilization are typically not their areas of expertise, and they likely wouldn’t benefit from pulling resources away from their core strengths.
What are the benefits of Outsourcing to a Contract Manufacturer?
Outsourcing services to a contract manufacturer who specializes in the production of medical devices has several benefits:
- Experience – Because they work with a lot of different companies, they have experience working with many different products and can offer solutions that you have likely not considered.
Production Efficiency – A good medical device contract manufacturer has deep experience identifying production efficiencies, which can lead to cheaper assembly costs.
Regulatory Expertise – Medical device industry regulatory compliance guidelines are complex and require a great deal of experience and understanding. Pro-Tech Design & Manufacturing, Inc. has been working within the industry for over 40 years and has a deep understanding of the regulatory environment and knows how to avoid the pitfalls.
Pay for What you Use – You only pay for the time you use the production lines and the assembly time. Conversely, if you set up your own production line, you must absorb the downtime costs of idle machinery, not to mention the initial investment costs, which can be substantial.
What services are typically included when you outsource to a Medical Device Contract Manufacturer?
- Assembly – most medical devices are composed of more than one component and require assembly. Also, the assembly often needs to be completed in a cleanroom environment. Most quality contract manufacturers have their own equipment and cleanrooms set up and adhere to certain ISO qualification standards to maintain a controlled environment that limits potential contaminants.
- Packaging – medical device contract manufacturers typically provide packaging services to protect the fully-assembled medical device. The packaging must be durable enough to protect the device through sterilization, storage, and shipping. Good companies know when to use pre-validated packaging that has already been tested and proven to meet regulatory requirements, and when to develop custom packaging for a project. Materials expertise comes into play as well and it is vital to understand strength and durability along with cost and sterilization factors.
- Labeling – Label design and tracking is another factor that works in conjunction with package design. Companies need to easily track the whereabouts of their product and be able to scan labels throughout the production, warehousing, and shipping process. Experienced contract manufacturers have the technology and knowledge to develop the appropriate label design, adhesive and label material, and traceability functionality.
- Sterilization Coordination – most contract manufacturers in the industry don’t conduct their own sterilization. That is most often performed by another party who is an expert on different sterilization methods such as Ethylene Oxide (Eto) and Gamma and has specific regulatory permits to manage dangerous gas and radiation. However, the contract manufacturer plays a critical role in designing packaging that works best with a particular sterilization method, which helps ensure the safety of the device.
They can also manage the coordination of the sterilization process with the outside party to manage timing and reduce costs. By bundling different products into one sterilization load, they are often able to achieve cost breaks that are passed along to the OEM. Otherwise, the OEM would have to pay for the whole load themselves, even if they didn’t have a full pallet of product.
Supply Chain Management – once a contract manufacturer is engaged, it usually doesn’t make sense to send a final assembled, packaged, and sterilized product back to the OEM. As a result, the contract manufacturing company often handles the last stage of the process to store, ship, and track the final product to its end destination.