Feature Article

Harnessing the Power of a Full-Service Outsourcing Partner

Posted in Supply Chain by Anonymous on May 5, 2010

To remain competitive, medtech companies are seeking partners that offer a full range of outsourcing services including design, manufacturing and after-sales support


In the best of times, the highly competitive medical technology marketplace leaves little room for delay in the production of new and innovative medical devices.The recent economic turmoil has placed even greater challenges on medical device manufacturers seeking to develop new technologies, including more-restrictive funding for research and development, pressure to streamline development and manufacturing timelines and strained field maintenance organizations.
In response to these added pressures, medical device companies are turning to contract partners that offer full-service outsourcing, including design, manufacturing and after-sales support. This article will provide insights on how medical device companies can work with full-service contract partners to rapidly develop new products and provide customer satisfaction with high-quality field maintenance.
The rise in full-service outsourcing
For the past several decades, the medical industry has experienced rapid growth, particularly in western European countries, due in part to an increasing ageing population, according to a report from Frost & Sullivan. As life expectancy rises, the number of elderly patients in hospitals and assisted-living facilities continues to grow. This demographic trend is driving the need for innovative medical devices, especially in the areas of cardiology, gynaecology, wound care and orthopaedics. Such substantial demand in the current economic context means medical device manufacturers are tasked with bringing innovative products that meet these specific needs to market quickly in a cost-effective manner. Enter full-service contract partners.
Outsourcing in any industry helps companies reduce costs by minimising overhead expenses, and the medical device market is no exception. Full-service contract partners provide resources not readily available to many medical companies, including multidisciplinary engineering teams, existing manufacturing facilities, regulatory compliance and networks of field service personnel across geographic regions.
Working with a single outsourcing partner that provides design, manufacturing and field maintenance capabilities produces multiple benefits, including decreased time to market, cost savings and a smoother transition from design to manufacture. Using one vendor for product development and manufacture streamlines communication, helping companies bring quality products to market on time and within budget.
Additionally, the process of transitioning products from design to manufacture is challenging for many medical companies. Often, not enough forethought is given to the manufacturing process during development. An outsourcing partner with both design and manufacturing expertise can smooth this transition by anticipating challenges early in the process, minimising costly late-stage design changes and speeding time to market.
Finally, with the rise of outsourcing firms that offer after-sales service, medical device manufacturers and start-ups can realise cost and customer satisfaction benefits. Leveraging the intimate product knowledge gained during the early stages of development and manufacture, these full-service contract partners are well-equipped to service instruments and manage spare parts. With networks of service engineers across Europe, end-users reap the benefits of rapid response and minimised downtime.
Rapid product development
In addition to streamlining efficiencies, a single outsourcing partner allows for rapid product development by leveraging rigorous and proven processes and versatile engineering teams. Rapid product development provides a holistic approach to bringing products to market quickly and cost-effectively through three essential elements: people, processes and technology. Large teams of engineers are required to bring any medical product to market, and a proven process is necessary to keep the team on track.
Using rapid product development requires a contract partner with relevant medical expertise and rigorous processes. As the medical industry is heavily governed, your partner should have intimate knowledge of US and EU regulatory requirements.
KMC Systems, for example, uses a flexible stage gate process, which is essentially a road map for product development that enables companies to enter and exit the development phases at any time. This process includes regular cross-functional team meetings to ensure smooth system integration once the multiple component designs of the device or instrument are near completion. During the stage gate process, design reviews are conducted at the end of each stage to assess potential challenges moving forward.
Final essential elements of rapid product development are off-the-shelf technologies that contract manufacturers offer in their suite of services. KMC Systems created proprietary EC Diagnostics, or “ecDiag,” software to facilitate the reuse of software code that controls common demands. This technology allows software coding to be put into place in a fraction of the time it would take to build up from the ground level. Room for error is also significantly reduced, eliminating the timely process of repetitive testing.
The proven process in practice
A partnership between KMC Systems and SurgiQuest to manufacture a revolutionary new laparoscopic access technology is one recent example of the benefits of rapid product development. The SurgiQuest AirSeal Bladeless Optical Tip Trocar & Cannula System was delivered to market six months after the early prototyping stage. Providing unobstructed access and visibility, the patented device monitors intra-abdominal pressure during minimally invasive laparoscopic surgery through a single trocar incision. By contrast, three or four trocars are used in traditional laparoscopic surgery. The device allows for greater control and movement of surgical tools, while reducing the number of incisions and recovery time for patients.
Having previously worked with KMC Systems on a different device in the mid-1990s, Daniel Donovan, Senior Director, Operations, at SurgiQuest was familiar with the company’s expertise. When SurgiQuest approached KMC Systems, the AirSeal system was in the product breadboard stage. Within six months, through close communication between project managers at SurgiQuest and engineers at KMC Systems, the team was able to bring the product to manufacturability and meet US FDA requirements and specifications.
Because of the flexibility of KMC Systems’ stage gate process, SurgiQuest was able to engage with its contract design and manufacturing partner. The ultimate goal of the project was to complete development of the AirSeal system on the basis of the following four milestones:
1)   meet product requirements
2)   address design for manufacturability
3)   pass verification testing
4)   transition to full-scale production in approximately six months.
The rapid product development process from KMC Systems provided the necessary documentation, process, traceability and control. Ultimately, SurgiQuest met its goal of market introduction within six months. The system went into production about one year ago, and so far 50 devices are in use in North America and Europe, with an additional 25 on order.
Choosing an after-sales service model
For most medical manufacturing companies, the sales cycle does not end once devices and instruments have reached end users—ongoing maintenance is required to keep these complex products operating properly. However, medical device OEMs large and small are reluctant to invest in hiring new full-time field-service engineers while the economy remains uncertain. As a result, the trend toward outsourcing after-sales service is starting to take hold in Europe, especially in times of unexpected service peaks. An outsourcing partner for field maintenance allows companies to extend their own after-sales services with low overhead costs. There are two distinct approaches to outsourcing field maintenance—the line and triangle models—and choosing the right model depends on several factors.
The triangle model
Many major OEMs prefer to provide initial triage for all service inquiries and use a contract partner to provide resource flexibility to their existing service
Figure 1.
organisations. Referred to as the triangle model, this approach is most often used by companies that wish to keep their own service hotlines to assess whether issues are technical, application or customer based. (See Figure 1.) Once a service call is deemed technical, an outsourced field service engineer can provide on-demand service.

The line model
For smaller OEMs looking to completely outsource field service, the line model is more appropriate. (See Figure 2.) With this approach, a contract partner directly interfaces with customers to provide full hotline support, repair and maintenance services and spare part management.
Figure 2.
Typically, suppliers whose revenue is based on the sales of instruments and devices find the line model particularly appealing. By completely outsourcing the sale of service contracts, medical companies can realign their efforts from after-sales service to generating new business opportunities.When choosing a contract field service partner to implement the triangle or line model, it’s important to make sure you continue to have access to all service data, including service contracts and reports as well as statistical instrument quality tracking. PEAK-Service GmbH, for example, uses proprietary software called repV. This data management system provides technicians, OEMs and end users with real-time web-based access to repair status, service updates and statistics, increasing the quality and efficiency of service. RepV is also a flexible and customisable software platform with a modular set up to meet the needs of any OEM. With either model, end user satisfaction is increased through faster response time.
Choosing a partner with service engineers throughout Europe will ensure rapid and consistent service for a company’s entire customer base. For global needs, seeking out a partner with service capabilities in other regions can also provide added value to end users. PEAK-Service GmbH formed a joint venture with KMC Systems to form PEAK-Service USA. With qualified engineers located across multiple regions, medical device OEMs and start ups can leverage the contract service company’s established structure from the start.

Faced with more-restrictive funding and increased competition, more and more medical device manufacturers are coming to the realisation that a full-service contract provider that can bring a product from design to manufacture and effective after-sales support are key elements of a successful outcome.

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