Medical device companies continually seek ways to reduce costs and increase efficiency in the manufacture of their products. Offshore Medical Device Manufacturing has gained momentum among many companies as a strategy that contributes to the bottom line. Although there are many advantages to manufacturing offshore, there are several factors to be considered before making the decision to manufacture offshore.
Reduction in operating costs is always a primary objective for medical device manufacturers. A big advantage to offshore manufacturing is the lower wage rates in places like Asia and Latin America. However, lower wage rates do not always transfer to higher output per employee hour. Additional considerations that need to be factored into the mix are:
- The travel costs associated with remote locations
- Increased freight costs
- Quality Control and GMP compliance. Regulatory miscues can become costly.
Offshore manufacturing facilities need to provide evidence of their compliance with quality systems regulations or QSR. These regulations help to guarantee the proper production, maintenance and process controls that ensure an FDA-approved quality system. This is a vital factor to consider when dealing with companies located in other countries.
The offshore manufacturer must possess areas of expertise that include:
- Knowledge of current operating healthcare production procedure
- The facility must comply with Good Manufacturing Practices (GMP)
- There must be clean and consistent record keeping for production runs to enhance ease of traceability.
A good project manager is absolutely necessary to any potential manufacturing partnership. This person will provide critical communication between manufacturing partners. Ideally, the product manager will be a trained expert in communication skills, leadership and problem resolution. It is important that there be a project manager on both ends of the operation to ensure good communication regarding budget, timelines and deadlines. The project manager will be vital to the success of the offshore medical device manufacturer.
FACILITY AND INFRASTRUCTURE:
The contract manufacturer must possess the proper equipment and facilities to support the manufacturing of healthcare products and devices. There must be adequate water, power and back-up systems in place in case of outages. The establishment must keep accurate maintenance logs; utilize calibrated devices, as well as conducting periodic cleanroom certification. A well equipped facility would have a comprehensive contingency plan to provide backup solutions to potential problems.
CUSTOMS AND REGULATORY COMPLIANCE:
Regulatory compliance is crucial to manufacturers that import and export products in and out of countries where they manufacture or market their product. There are many customs practices and import/export regulations, that need to be adhered to or they may negatively impact cost effectiveness.
While the future of offshore medical device manufacturing is promising, and the benefits are many, it is crucial that companies looking to reap the rewards be well-prepared to overcome the challenges and obstacles involved in such a venture.
There are companies, such as Life Science Outsourcing (LSO), is an example of Offshore Medical Device Manufacturing, that does it the right way. Advantages that a company such LSO can provide include:
- Close proximity to the United States
- Lower labor and transportation costs
- Strict adherence to U.S. regulations
Additional qualities that can ensure the success of your organizations charter to run efficiently with operations being conducted out of the United States.