An outsourcers dream -- Costa Rica

A few days ago, at the big MD&M 2008 show in Anaheim, Calif., we attended a Roundtable Discussion in which lead medical-manufacturing experts discussed topics such as outsourcing, material innovations, and recent manufacturing trends. Participating experts included Dave Mabie, Atek Medical, Steve Bruner, Nusil, Jerry Hansen, Circle Medical, Tom Black, B. Braun, Jim Klapper, The Lee Co., Bill Welch, Phillips Plastics, and Jennifer Ponti, G&L. Here are some of the interesting comments they made:

When asked about emerging trends, Jerry Hansen first says from a contract manufacturer's perspective, the medical market is exploding. A big trend has devices that were the size of a toaster now the size of a quarter. He says more OEMs are outsourcing R&D work, which is now considered a variable cost. A big pressure is on to provide what's called “interim manufacturing,” a way for customers to get mid-range volumes before they move on elsewhere to high-volume production.

Steve Brunner says companies would be wise to keep an open mind about materials such as the new hybrids. Jennifer Ponti agreed and says a lot of newer jobs involve silicon hybrids. She says it will soon be feasible to target materials to specific patients. This is already being done in small groups, i.e., neonatal and women's health. But make sure materials are established as biocompatible through the FDA, or else your project will get stopped dead in its tracks.

Bill Welch says for quality and data management, ISO 13485 should be in the DNA of every design house. Also important is ISO 14971 for risk management, which comes out of ISO 13485. He adds that implementing ISO standards and complying with the FEA are tickets you need to even get in the door of medical manufacturing. Past that, it's a relationship-building exercise.

Jim Klapper says another big trend is towards integrated systems. He says companies want to buy a turnkey package, not bits and pieces. He adds the ISO stuff is actually great because now everyone knows what is expected.

Jerry Hansen says companies now want partners that look and act like they do. A new term covers this idea – “insourcing.” This could actually be outsourcing, he says, but the name makes people feel as if they are all in things together. Also, don't forget that different kinds of businesses might need to do things different ways. For example, there is a big difference between companies selling finite devices that might have thousands of customers compared to companies providing a service that might have eight customers.

It was also mentioned there is now a lot of outsourcing to Ireland because of the tax benefits and an educated labor pool. Another favored place is Costa Rica. It is computerized, has a “tax-favorable manufacturing environment,” and has a less than 5% employee-turnover rate.

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