13 Feb Keys to Achieving Lowest Total Cost When Outsourcing
Medical device manufacturers are facing continuing cost pressure. At the same time, regulatory complexity continues to increase. Reducing cost in that environment requires strong focus on working smarter in all phases of the product’s lifecycle. When product development and production is outsourced, this translates to more heavily leveraging your supplier’s ability to add value to every step of the process. In short, the supplier’s processes and expertise should take both measurable and hidden cost out of the overall product commercialization process.
Forefront Medical Technology, a specialty contract manufacturer with a focus in disposable diagnostic, drug delivery and medical device systems, understands this challenge and has optimized its processes to achieve the goal of adding value throughout the process. This white paper looks at the five areas the team at Forefront Medical thinks are critical to lowering total cost:
- Eliminate inefficiency in product development time
- Closely link product development and manufacturing teams
- Cut lead-time and achieve lower cost resource availability through strategic use of vertical integration
- Proactively manage quality and validation
- Apply continuous improvement disciplines to create a roadmap for cost reduction and/or product improvement opportunities long-term.
Eliminate Inefficiency in Product Development Time
Forefront Medical’s team embraces the principles of Lean Manufacturing and the benefits achieved through minimizing non-value added activity. For example, the number of design spins and tooling iterations are key performance indicators (KPIs) for the design team. The goal isn’t just to design a product quickly; it is to develop a product that meets cost targets and can be efficiently commercialized. Not surprisingly, Forefront Medical’s average product development cycle is 8-9 months, roughly half the time of standard product development cycles.
The product development process has been carefully planned to ensure that customer requirements are clearly understood and put in writing in a Design Development Plan at project start. The goal is to eliminate the additional design spins and/or the time loss that can occur when requirements and proposed solutions are less clearly communicated at process start. This strong focus on project definition and clear milestones ultimately supports a gated design process that enables tooling development to begin as soon as that the design for each part to be tooled is approved.
In addition to having a well-designed process to clearly define customer goals and expectations in the initial stages and customer approval at critical parts in the process, Forefront Medical has also taken steps to optimize the “human factor”. Product development projects typically involve multi-cultural teams working long distance across multiple time zones. To ensure efficiency and minimize the potential for errors driven by variation in tools, strong focus has been placed on standardizing design tools and processes so that internal teams collaborating globally have the same frame of reference. Additionally, Forefront Medical has set up a U.S. Technical Center to provide more localized support with time zone compatibility in one of the dominant regions for medical product development. Product development cost is also lowered when materials that have completed validation testing are specified. New materials typically go through a rigorous validation testing process plus regulatory testing whether they are used in the body or outside of it. Products used in the body must also go through clinical trials. Specifying approved materials which have passed biocompatibility and other critical tests eliminates development lead-time and validation testing. Some validation tests take six months to one year and the process re-starts if the material fails testing. Forefront Medical’s team typically eliminates eight months to one year of development time, when it utilizes materials from its database of materials that have been previously approved. Additionally, that process eliminates the risk of validation testing failure when untested materials are specified. The reduction of time and testing cuts significant cost from the process.
Closely Link Design and Manufacturing Teams
One of the advantages of using a supplier with both product development and manufacturing capabilities is the product development team has a better understanding of manufacturing team’s goals. The tooling design process includes a design for manufacturability (DFM) phase, followed by development of the mold specification. Mold-flow analysis is used to ensure efficient molding with minimal scrap and minimization of secondary finishing processes. In addition to reducing overall cost, the reduction in variability contributes improves product quality. Following a design review, mold fabrication begins. This is followed by a testing and debugging phase which includes a dry run and analysis of product first off the tool. The design validation process looks closely at design assumptions on target labor utilization and run rate, and changes are made if that analysis indicates the initial assumptions need to be modified. Production processes undergo a similar development and validation phase with performance qualification to customer specifications.
Strategically Utilize Vertical Integration
Strategically implemented vertical integration cuts cost, reduces lead-time and adds flexibility to the range of services available. Forefront Medical’s vertical integration strategy supports both rapid prototyping and tooling development. Design Engineering, prototyping and tooling fabrication capabilities for Liquid Silicone Rubber molds are located at the Company’s headquarters in Singapore. The prototyping capability includes Selective Laser Sintering (SLS) and Multi-Jet Modeling (MJM) systems for rapid prototyping. Additional engineering and tooling fabrication capability is also located in Forefront Medical’s Jiangsu, PRC manufacturing facility. The vertically integrated tool fabrication capability typically shortens product development cycles by 2-3 months. Additionally, in-house resources view the prototyping phase in the context of the larger project rather than a standalone event which contributes to shorter lead-times at lower cost than is typically found when using a separate supplier for these activities. In keeping with its efficient path to commercialization strategy, Forefront Medical’s flexible research and development (R&D) structure was designed to leverage the core Singapore-based engineering infrastructure while localizing additional tooling fabrication and maintenance functions within the manufacturing facility. Forefront Jiangsu has a full-scale commercial tool room with integrated support from the Singapore team. This provides the resources necessary to maintain tooling on-site, while tapping the expertise of Forefront Singapore’s engineering staff for new tool design.
Actual tooling fabrication may be done in Singapore, Jiangsu or at qualified third-party suppliers depending on complexity of the tool and project requirements. Jiangsu’s engineering team utilizes the same design and mold flow analysis software found in Singapore for robust collaboration during the design and development phase. The Jiangsu team handles product prototyping, the scale up of molds and tools, pilot runs, validations and product lifecycle management activities, accessing Singapore team resources as needed.
Proactively Manage Quality and Product Validation
Medical device manufacturers face a complex regulatory environment. Governing bodies and requirements vary by geography. Having a supplier who is current with the regulations, quality certifications and validation processes required by the product’s end markets, saves time and cost. Forefront Medical has a dedicated Regulatory Affairs team whose responsibilities include product registration and CE marking; maintenance of the Device History Record (DHR) and technical file; biocompatibility testing; validation and support sterilization; updates on regulations and communication of new/revised regulations; and intellectual property protection.
All Forefront Medical facilities are registered to ISO 9001:2008 and ISO: 13485:2016. All facilities are also compliant to MDD 93/42/EC which is the Medical Devices Directive for European Community, MHLW Japan’s Pharmaceutical Affairs Law (PAL) and Ministerial Ordinance #169, ISO 15378 which is focused on primary packaging materials for medicinal products. All facilities are FDA and Japan registered as foreign contract manufacturers. Its Jiangsu, China facility currently holds a FDA Establishment Registration and Class 2 Product Registered (510k), as well as China FDA (CFDA).
Using Continuous Improvement Disciplines to Cut Cost Longer Term
Due to the customized tooling and processes associated with its products, Forefront Medical is typically sole-sourced on the products it manufactures for the life of the product. Given the competitive nature of the medical device market, it is important to find ways to deliver additional cost reduction over time. As a result, Forefront Medical has developed a continuous improvement value-added process to identify opportunities for cost reduction and/or improvement in the overall competitiveness of the products it produces by evaluating internal processes and surveying end users. Internally, the focus is on identifying production bottlenecks and long lead-time issues, and includes feedback from operators and technicians. Externally, the focus is on ease-of-use. The team develops a list of potential improvements and then selects the top priorities. A timeline is developed and progress is tracked. The project is closed once 80-90% of the improvements have been achieved. This process varies from a traditional Value Analysis Value Engineering (VAVE) process in that VAVE projects tend to be completely cost driven. In this process, the goal is to eliminate non-value added cost and increase market share.
A World Class Approach to Manufacturing
The foundation of Forefront Medical Technology’s World Class Manufacturing philosophy is to eliminate hidden costs before they occur. Rapid product development cycles, clear alignment between design and commercialization goals, strategic use of vertical integration, a robust quality assurance infrastructure and a focus on continuous improvement over the life of the product help ensure that goal is consistently achieved.
About Forefront Medical Technology
Forefront Medical Technology is a global medical device contract manufacturer with five locations. Singapore is Forefront’s headquarters, as well as home to our Design Engineering Center and specialty manufacturing. JiangSu and Xiamen, China, are additional manufacturing locations and are also China FDA Registered. Shanghai, China, Farmington, CT USA are regional Business Development offices which assure our technical sales teams are close to our customers for local, responsive assistance.
We have developed extensive capabilities with laryngeal mask airways, diagnostic devices, drug delivery systems, enteral feeding catheters, infusion sets, wire reinforced tubes, optically clear components, patient monitoring devices and other specialty products. Each of our locations has state of the art manufacturing capabilities that include class 100K clean rooms for extrusion and injection molding, complimented by class 10K clean rooms for assembly and packaging. Forefront Medical’s integrated technical approach provides customers the total manufacturing solution and global supply chain. Our facilities are TUV ISO 13485:2016, ISO 9001 and FDA Registered. Forefront is a wholly owned subsidiary of VicPlas International Ltd, who is listed on the SGX Main Board, Singapore stock exchange.