Staying competitive calls for medical equipment OEMs to constantly keep pace with the speed of innovation. Better medical treatment and care can be achieved with fast, accurate results from advanced imaging applications such as CT scanning and MRI that process and analyze large amounts of data, requiring developers to build devices that deliver ever-increasing computing performance. Supporting this demand, high-performance embedded computing platforms that use the latest faster and more efficient processors are essential in helping OEMs keep up with these enhanced performance requirements.
However, getting a new medical device to market and meeting computing technology requirements is more complex than just replacing a processor or computer board. As medical equipment companies have realized, the list of challenges can be quite long.
The design cycle is a multilayered process that can lead to higher overall development costs and less profitability if not managed properly. Does the company have sufficient internal engineering resources to deliver a successful design and do they possess embedded computing knowledge? In addition, designs must meet an increasing number of global medical regulations, certifications, and technology standards. Direction is also necessary for risk management that efficiently synchronizes technologies and suppliers worldwide.
Market and competitive pressures are always concerns, so reduced time to market, time to volume, time to profit, and maintaining the highest quality in all capacities are constant medical OEM goals. Working against these objectives are shorter product life cycles and shrinking market windows combined with consumer expectations for higher levels of technology sophistication. Also, managing development, manufacturing, and support costs in this market is not an easy task, making ongoing efficiency improvements in these areas a crucial need. That is why most successful medical OEMs practice lean processes that allow them to remain focused on their core competencies.
With all that is required to launch a successful product today, and the changing market dynamics of the healthcare industry, outsourcing in the medical device industry is becoming a growing trend. This article examines the factors that are driving the growth in the medical device industry, and how these market dynamics have led to an increased demand for outsourcing of noncore OEM competencies and processes to reliable partners. It also presents ways that outsourcing can help OEMs minimize technology investments and integration efforts to accelerate time-to-market and increase ROI. The attributes required in an ideal outsourcing partner are also discussed.
The Good Reasons to Outsource
The ongoing trend in the medical equipment market is that designs are becoming more complex. In turn, these complex designs are requiring more advanced technologies such as those necessary to process the massive amount of data the healthcare industry produces while also giving medical professionals secure and detailed information at the right point in time to cure diseases and improve patients’ lives.
Along with these complexities are a diverse set of regulatory requirements in multiple markets. There is a need as well for increased access to quality healthcare worldwide combined with the requirement to keep costs low and efficiencies high. Medical device companies also see revenue benefits to expanding globally. The challenges the medical industry is facing today are enormous.
Providing expertise that OEMs may lack, proven outsourcing companies are a welcome resource offering needed technology, management, manufacturing, and regional knowledge essential to medical device development and market success. Freeing OEMs to focus on what they do best, enabling them to create innovative and differentiated healthcare solutions, outsourcing services from a trusted advisor and partner help solve a host of go-to-market problems such as those encountered in a company’s R&D, quality management, regulatory affairs, testing, and production processes.
Outsourcing is valuable for small and start-up device companies that have limited development budgets, personnel resources, and infrastructure. But outsourcing design and manufacturing services are also helpful for large organizations. Larger companies can use outsourcing to help them be more agile and help reduce costs in areas such as vertical integration, device certification, or even as a resource for various development functions from software to application testing. Where outsourcing companies can show their worth is in helping medical OEMs shorten design, development, and time-to-volume production, enabling them to capture first-to-market advantages in the form of market share leadership that justifies premium pricing.
Reflecting this trend, medical device outsourcing is projected to reach $44.7 billion by 2017, according to Global Industry Analysts. In addition, analyst firm Transparency Market Research offers a similar estimation, predicting that the global medical devices outsourcing market will grow at a compound annual growth rate (CAGR) of 11.6 percent between 2012 and 2018, and is likely to reach $40.8 billion by 2018.
What to Look for in an Outsourcing Partner
Longevity for Innovative and Sustainable Healthcare Solutions. Computing technology can make or break a new device design. Consequently, access to the latest processor architectures and standards-based computer solutions that offer long-term availability is a valuable asset for medical OEMs. Along with technology architecture longevity, outsourcing companies need to assure their medical customers of their ability to manage extended product life cycles.
In addition, they must be able to supply scalable, modular platforms that permit simultaneous use of components, enabling OEMs to create innovative and sustainable healthcare solutions with minimum investment and integration effort. A supplier of scalable hardware solutions makes it easier for medical device developers to address different market needs and performance levels from a single basic design. To support advanced technologies, the best outsourcing companies also demonstrate their global engineering expertise and continuous medical innovation capabilities.
For devices to be successful, market windows need to be met that enable OEMs to achieve their profitability goals. Therefore, it is a necessity that outsourcing partners show established experience in helping medical OEMs reduce time to market and manage budget constraints. Subsequently, effective development partners must possess a thorough understanding of all the aspects of getting a product to market including its regulations and certification requirements.
Regulatory Expertise. The intricacy of medical device design and manufacturing demand an outsourcing partner that can help navigate through the often-complicated regulatory environment. Partners must be familiar with the requirements and life cycle management for regulatory systems for FDA, CE, CFDA, PMDA, and ANVISA as well as various import constraints that require a diverse range of activities and certifications to verify compliance. Furthermore, regulations and certifications of medical devices are rapidly evolving and expanding worldwide subjects that can add complexity in getting a product to market (see Figure 1). Outsourcing suppliers that support medical OEMs with this level of expertise are instrumental in helping them achieve faster time to market and the leadership benefits that come with it.
Value-Added Benefits Meeting Profitability Goals. With the many outsourcing models and options available, it is important that medical device OEMs find the right partner that will best suit their go-to-market needs. High on the list of outsourcing services for OEMs is a partner that can help them meet the constant pressure to deliver higher levels of technology sophistication while also meeting shrinking market windows and improving time to market and time to profit.
An outsourcing partner with decades of experience in bringing medical designs quickly to market can ensure that complex application requirements are met. Medical OEMs benefit from the company’s full design capabilities that encompass commercial-off-the-shelf (COTS) and modified standards to full custom capabilities that inherently provide the system compatibility, development flexibility, and product longevity required in the healthcare industry.
Customization with Modified Standard Building Blocks. An outsourcing partner’s proven standard product portfolio provides a strong foundation for the development of customized embedded medical computing solutions. These translate to measurable cost advantages for OEM customers. Advantages are gained by the cost-effective reuse of existing technology as well as from custom designs that use mature, established products, helping them avoid additional costs for each design iteration or specification change. Reuse of these demonstrated technologies also enables shorter development times that result in valuable time-to-market advantages. Furthermore, with increasingly complex OS support, board support packages, and middleware, which many OEMs consider the most important cost and competitive factors of a design, the basic functionalities are already financed through the use of standard products with the added confidence that they have been validated repeatedly in countless applications.
R&D. Research and development is a critical part of creating next-generation medical devices that can improve healthcare solutions for patients. Embedded computing technology is a basic, yet important, part of any new design. However, the development of embedded computers is often not among the core competencies of medical device manufacturers. Today’s rapid design cycles many times call for engineering expertise with faster, more efficient processors and higher performing computing solutions. Selecting an outsourcing partner with a wealth of design experience allows OEMs to minimize their hardware and software investments, enabling them to maximize ROI. For example, by leveraging an outsourcing partner’s embedded computing market leadership position with specialized medical industry expertise, OEMs can keep pace with the speed of technology.
Quality is an essential asset of a medical device. It is necessary to maintain the healthcare industry’s life-critical commitment. To allay concerns about regulatory and quality issues, partnering provides efficiencies gained from a strong and controlled supply chain. Kontron, for example, has demonstrated proficiency in controlling a multitude of components and materials, each with specific requirements, associated standards, and applicable regulations. Its facilities follow the required process standards for medical devices or are ISO 13485 certified. In addition, its products are certified to UL specifications (CSA, CQC, VDE, and TÜV Geprüfte Sicherhit).
An outsourcing partner must exhibit consistent performance, effective program monitoring, structured testing, and stringent process execution per regulatory and customer mandates. Through its continuous improvement projects, the partner must actively implement ongoing enhancements to processes, products, and services with both customers and suppliers. For example, Kontron’s comprehensive proactive corrective and preventive action (CAPA) process is applied for any complaint or noncompliance following the 8D methodology for problem solving, supported by the CAPA tool so that it can take quick action to identify, correct, and eliminate recurring issues. In regular quality reviews with customers and suppliers, root causes are discussed and corrective actions are jointly defined and executed to improve the key asset of a medical product — quality (see Figure 2).
Shorter time to market is attained, supported by responsive engineering teams and knowledgeable life cycle management. At the same time, medical devices have to be available long term (sometimes well over a decade) and span several generations of a technology platform. An outsourcing partner’s medical experts should understand the importance of component selection that must cover the product’s complete life cycle since this is critical for success. Using the life cycle management skills at Kontron, for example, OEMs are assured of continuous support and maintenance to assist them in controlling these necessary functions that may not be one of their core competencies. An outsourcing partner should be a knowledgeable asset that can recommend cost-effective manufacturing processes and resources (see Figure 3).
Global Influence, Local Support
It is essential that an outsourcing partner provide added value through global technology hubs in Europe, Asia, and North America. A worldwide presence enables same time-zone technical support and more personalized service, which facilitates cost reductions and more efficient processes. For example, Kontron has forged partnership alliances with other leading technology companies, giving customers access to the latest technologies and products. Advance knowledge from these alliances (e.g., Intel® Internet of Things Solutions Alliance) means medical device developers are informed of upcoming processor architecture, software, operating system, and component innovations so they can be prepared and make intelligent decisions about future application needs and when upgrades make the most sense.
Getting to Market Faster
An outsourcing partner should have an established, deep understanding of the medical market in order to be a trusted partner that can help ensure medical device design success. For example, using a partner for outsourcing noncore, yet necessary services allows medical OEMs to maximize performance and focus specifically on their differentiated business and product strengths. By utilizing the extended list of proficiencies and capabilities that a partner provides outside their primary area of expertise, OEMs gain lean business and cost-cutting advantages from services in essential areas of quality, certifications, R&D, life cycle and supply chain management, testing, and manufacturing.
An outsourcing partner also helps OEMs achieve additional design flexibility and product scalability by providing a range of COTS, modified standards, and full customization products and capabilities. OEMs benefit, too, from highly experienced technical teams worldwide, with regional service to solve problems in real time. Peace of mind and the ability to reduce design issues are gained from quality certifications and industry-leading support that comes from proven performance and successful customer programs.
Partnering assists medical OEMs to streamline integration of the latest technologies that add device functionality and ease of use, creating a new generation of connected healthcare systems that match growing Internet of Things (IoT) requirements (see Figure 4). Utilizing an outsourcing partner’s comprehensive range of outsourcing services, sophisticated medical OEMs get the knowledgeable resources they need to create these innovative healthcare solutions, reduce resource costs, and attain the agility necessary to compete more successfully.
This article was written by Jack London, Business Development, Medical, for Kontron America (San Diego, CA). He can be reached at 888-294-4558. For more information, visit here .