Page 26 - MetalForming April 2011

Medical Device Manufacturing
2) How does sourcing to this sup- plier impact my total cost? As OEMs or CMOs evaluate adding suppliers, they logically see these entities as work— something else they have to manage that may negatively affect their ability to quickly commercialize products. Suppliers must demonstrate an abili- ty to increase product commercial speed by bringing value—by partici-
pating in advanced quality planning, mitigating risk, improving product- launch performance and increasing speed to market.
3) Is the supplier financially stable? Because CMOs have such a fragment- ed supply base, during the recession it wasn’t uncommon for suppliers to go out of business; many simply didn’t have the financial wherewithal to deal
with the changes in production vol- umes. Although supplier financial sta- bility hasn’t historically been of par- ticular importance, OEMs and CMOs are evaluating it based on these nega- tive experiences.
4) Can the supplier fund further development? Since top-line growth is a major objective for OEMs and CMOs, it’s important that they have the abili- ty to increase capacity and funding, and grow with them. Another signifi- cant trend is increased involvement in low-cost areas, particularly the rela- tively immature markets of Asia, South America and Africa. Suppliers should plan accordingly.
5) Can the supplier provide future cost reductions? Do you have systems in place to improve efficiency and effectiveness and continue to reduce costs, which can be passed along to OEMs and CMOs?
6) What’s the depth of talent of the supplier’s management team? Because of the fragmented supply chain, OEMs and CMOs are used to working with mom-and-pop suppliers, where the talent resides in only one or two people. If that talent leaves, quality and value often leaves with it. OEMs and CMOs have learned this lesson and take this into account.
Getting Started
For companies contemplating entering the medical-device indus- try, the first order of business is research. Visit shows, such as the Med- ical Design & Manufacturing Confer- ence. Visit www.fda.gov, where you can view examples of FDA warning letters and recalls and learn more about industry happenings. Subscribe to industry publications, learn the lingo, and then begin to identify potential end products that fit your manufacturing capabilities.
There will continue to be opportu- nities within the medical-device arena for years to come. Leveraging them won’t be easy, but those organizations willing to expend the effort will reap the rewards. MF
GLOBAL FURNACE SYSTEMS GROUP
24 MetalForming/April 2011
www.metalformingmagazine.com