Tim Bowe, executive VP of Americas and Asia for the Altran Group, has returned to address the questions posed for part three of this four-part Q&A series that looks at a variety of topics relevant to medical device manufacturers considering outsourcing options for various tasks. In this part, Bowe explains the role sustaining engineering plays for mature medical device product lines and the value an outsourcing partner could offer in removing this responsibility from the OEM’s plate.

Sean Fenske: What is sustaining engineering?
Tim Bowe: Sustaining engineering is the technical support of products as they move into the latter or mature stages of their lifecycle. Later-stage products are not in need of disruptive, transformational innovation, but rather incremental innovation and standard product maintenance. Activities like obsolescence management, limited software release support, and regulatory updates are common sustaining activities.
 
Fenske: Can you expand on that? What other reasons make sustaining engineering relevant to medical device manufacturers?
Bowe: Medical devices have long lifecycles, typically in the range of five to 20 years. Manufacturers often have to balance investment across a broad portfolio of products, ranging from innovative new product introductions (NPI) to very mature products in the field that, although no longer actively marketed and sold, must still be supported. In order to meet this challenge, manufacturers often manage and organize NPI and sustaining engineering functions separately because the type of the work required is very different.
 
Fenske: How does sustaining engineering have an impact on regulatory compliance?
Bowe: As regulations change in the marketplace, sustaining engineering departments are required to keep up with those changes relative to older products, despite the fact that the revenues for older product lines may be on the decline. Sometimes the price of compliance can represent too great an investment (or too great a share of the overall R&D budget) and manufacturers are forced to discontinue a product line.
 
Fenske: If we’re talking about mature products that aren’t under development, why would they significantly impact the R&D budget?
Bowe: This question goes to the balance issue mentioned earlier. Because R&D budgets need to cover both NPI and sustaining activities, it can be a real challenge to find the right balance—especially as successful companies deal with many maturing product lines. For example, it can be a very difficult choice for R&D management to forego NPI investment in an innovative new product in favor of dedicating budget to a mature product that needs funding for a major sustaining activity like compliance. R&D executives deal with this tradeoff every year as they set budget priorities.
 
Fenske: Are there recommendations you make for companies in order to better control costs for sustaining engineering?
Bowe: An approach we favor with clients is to better balance the overall R&D budget by driving down the cost for sustaining engineering. Doing so requires taking a close look at the breakdown of the R&D budget to understand exactly where the engineering staff and therefore, cost, is focused. Most sustaining work/projects do not require a company’s most highly skilled engineers. In fact, assigning those engineers to tasks they may deem unchallenging can often affect their job satisfaction and team morale with the ripple effect continuing beyond the R&D organization. Putting the best and brightest engineering talent on sustaining activities is often what drives up the cost of sustaining engineering for most manufacturers.
 
Fenske: Do you have a helpful tip for MPO readers that could help them with this effort?
Bowe: Manufacturers can address this problem, or avoid it all together, by looking outside their organization for a partner with the required engineering expertise for sustaining projects at a lower labor cost—while maintaining the same level of quality achieved with their in-house engineering talent. In addition to lower cost labor, the right partner can also introduce other ways to decrease the cost of goods. This results in better margins while maintaining customer commitment schedules.
 
Fenske: Are there methods that can be employed in the initial product development to better prepare for sustaining engineering later in the product’s lifetime?
Bowe: Effective design for manufacturability (DFM) helps drive efficiencies throughout the product lifecycle, and can help reduce re-spins when managing obsolescence, value engineering, and other product maintenance activities.
 
Fenske: What other tools/methods can medical device manufacturers use to improve this process?
Bowe: Medical device manufacturers must truly understand their real costs for sustaining engineering—not only the direct costs, but the drag on new product innovation, and the cost of inefficient processes.
 
Fenske: What are the best recommendations you can make for a medtech company struggling with sustaining engineering?
Bowe: One key activity manufacturers can undertake is an objective review of core competencies and what aspects of their product portfolio they wish to keep in-house versus seeking partners who can meet essential, but non-core needs. Medical devices are no longer “box and consumable” products and have to embrace higher levels of connectivity, data management, value-added services, and technologies that may be well outside their core competencies—cloud, mobile, analytics, and so on. The results of this review can help identify the right process and the right partner for managing sustaining engineering.
 
Check out the previous parts of this four-part Q&A series.
Part 1: Under Review: Today’s OEM/CMO Relationship
Part 2: A Discussion of Investment and Innovation in Medtech