As a result of the growing global markets, it is inevitable that the medical devices industry has to outsource. Heavily regulated by UK and international governing bodies, the industry therefore needs to concentrate on utilising the services of outsourced partners to ensure that supply chains operate productively.
Outsourcing has proved to be a valuable tool across many industry sectors, often improving financial and operational performance. It enables organisations to have the opportunity to utilise the technology and expertise of others, meeting a specific brief that an organisation may be unable to perform for any reason.
With the constant pressures surrounding the industry, including increased costs, maintaining product quality and decreasing time-to-market, it is vital to the medical device operation that outsourced manufacturers and suppliers are treated as partners. These partnerships need to be cultivated from the start, maintained and monitored throughout.
For the health of the industry these relationships need to be made up of capable partners that can deliver products as and when needed, and to the specified standard, particularly as most medical devices incorporate some elements of standard compliance.
Things to consider
When establishing relationships and buying in components from suppliers, any organisation is introducing an element of risk into its own performance. Therefore, comprehensive and effective risk assessment is vital. The preferred option will generally be to work with partners with whom you have an established relationship and a well-documented history of quality service. However, this may not always be possible. For example, a preferred supplier may not be able to meet your deadline, and an alternative source will need to be found.
Cost is of course a factor within the relationship evaluation process. The costs that need to be carefully considered are not only that of the quoted price of the product, but also the cost of taking on any particular supplier, the possible variation in quality, and the potential effect this could have on your bottom line. This calculation will form an important part of a risk assessment process.
A guiding principle within the quality discipline is that low cost does not necessarily mean value for money. But at the same time the reverse can also be true, in the sense that low cost does not necessarily imply low quality. A supplier may be able to offer lower priced goods at a high standard, as a result of implementing quality processes that eliminate waste. The key is to find a supplier that will deliver the goods to the required standard and be the most cost effective.
Communication and understanding
Medical devices are often contracted out for manufacture by what can be referred to as virtual companies. A ‘virtual company’ is the model in which an organisation has outsourced the majority of its business practices to contractors such as contract manufacturing organisations (CMOs).
The single most important issue when dealing with this complex model is ensuring clear communications. This begins at the outset where robust technical agreements are essential. If these are not in place it can be unclear who does what within the process. Problems often arise in the field, and no one knows who is responsible for putting them right. James Love, director of Innovations International says, “Purchasers depend on the supplier, as much as the supplier depends on the purchaser. And manufacturers need effective suppliers.
“Effective and close communication with suppliers is essential, yet many organisations do not involve suppliers soon enough during the development/manufacturing stages. You want suppliers on hand at the concept stage. Organisations can get ahead of themselves if a critical requirement is not clearly specified at the very start. After all, the device needs to be used by patients and practitioners, so it is essential that it works in the way it is required to work. Many past projects have failed simply because manufacturers had not understood the requirements and expectations of the patient or the practitioner.
“There is an important need to understand the behaviour of materials, so those used can continue to deliver the functional need even if the device is at the end of its shelf life. Contract manufacturers and material suppliers will understand this. Therefore, if you need additional insight into the engineering properties their knowledge can be of help.”
The virtual company and its multiple suppliers arrange for contract manufacturers, who in turn contract the mouldings out to someone else. Therefore when an issue with the material occurs the problem is already three stages down the supply chain. There is subsequently a danger of Chinese whispers occurring, where the problem is passed on numerous times from the moulding contractor, to the material supplier and so on, enabling the message to alter each time.
Neil Armstrong, CEO of MeddiQuest Limited explains, “The issue with any medical device or regulated product is the impact on health and safety – ensuring a beneficial effect on a patient’s health, with minimum possible risk. It is not purely about the original product design; it is also about handling any succeeding problems. It is inevitable that things are going to go awry, so processes and procedures need to be outlined from the very beginning.
“The final manufacturer is effectively taking full responsibility for the safety and performance of the product. Often using subcontractors who do not necessarily have the specialist expertise in the medical devices field, third-party consultants should be involved to assess the contractor to approve what they are doing and ensure that they are adhering to the correct rules and regulations. Medical device manufacturers understand their own in-house processes and the general quality and regulatory controls necessary for medical devices.
“Similarly, a contract steriliser may have an understanding of sterilisation processes within a specific industry such as food spices, and imagine that similar routines can be applied to medical devices, where they would be totally inadequate.
“General-purpose manufacturers cannot have a full understanding of the processes and procedures that need to be adhered to regarding medical devices. Therefore, as critical life-supporting and life-sustaining products, it is essential that all sub-contractors fully comprehend the importance of the device, and their processes meet the necessary quality and regulatory controls. Regulatory affairs consultants can advise manufacturers on these relationships and help them to select suitable medical devices contractors with specific expertise.”
Continuous quality improvement
Embracing quality principles can reduce time-to-market and manufacture costs, increase product and process quality, and reduce waste. By implementing quality management processes organisations can improve the flow of the entire outsourcing process and therefore increase overall business stability.
The Deming Cycle effectively demonstrates this. By planning, doing, analysing/checking, and acting on the results of these checks, it enables you to get things right the first time. The objective of the quality professional in any industry is to eliminate risk and cut costs through the use of effective quality management techniques, focusing on this circle of continuous improvement.
The key aims are to reduce risks and costs, increase productivity and deliver quality goods, on time. It is essential that you build a culture that accepts problems may occur. By taking an analytical approach to the outsourcing process you are able to assess what could go wrong, list potential problems and therefore minimise them.
It is not enough to simply become aware of a problem, realise the cause and correct it. You must analyse the root cause of problems and decide how to correct and, more importantly, prevent them. Failing to consider problems at the start of any initiative and putting preventative action in place will only lead to further problems. These kinds of situations are not only disruptive to the outsourcing/manufacturing process, but can also be extremely expensive. It is much better to consider these problems in advance than to simply react to them after they transpire.
Treating individual outsourcing departments as separate concerns, when they should be viewed as mutual partners within the system, in addition to target-driven incentives and industry pressure to produce a quick turnaround are evident situations where the outsourcing system is subject to process breakdown. Process improvement, problem solving and cross-functional team working/project management are key techniques to combat this task.
It is a challenging economic climate for all industries; however, many other industries such as manufacturing, automotive and food have begun to embrace such quality principles with regards to the outsourcing process, and adopt these teachings to their advantage. Medical device developers should be striving for operational excellence, and heavily investing in long-term quality initiatives. The aim is not for perfection, which is not realistic and cannot be achieved, but for continuous improvement.
Management and advancement, when dealing with a supply chain should start at the very beginning. Having a certainty of suppliers who can meet the minimum specification should be established early on. It is not enough to focus on just the accreditation side of things.
A dynamic relationship needs to be formed. The success of this relationship is dependent on open communication streams, including the sharing of ideas. This process needs to be considered as a two-way investment initiative between medical device developers/manufacturers and CMOs, indicative of the mutual responsibility between the groups, and embedded within the structure. Developers need to ensure that suppliers are not only compliant to standards, but also look at the overall business, including issues of auditing and review.
The basics of managing commercial, technological and regulatory needs should also be a focus. Contractor compliance is essential; so too are price, delivery times, stock holding and the technical capability to supply to specification. Another key concern should be risk management, particularly as medical devices technology has a heavy emphasis on this. Risk management needs to be under day-to-day control, minimising risks, especially as getting it wrong costs money.
The Chartered Quality Institute’s Medical Technologies Quality Group (MTQG) represents the medical devices community in relation to the application of quality and regulatory principles. The MTQG provides a medium for the medical devices industry to share knowledge and encourage learning, understanding that all sectors of industry need to come together to embrace quality-related issues.