Over the past several years, medical device original equipment manufacturers (OEMs) have shifted focus to their core competencies, becoming more dependent on contract manufacturers (CMs). Today’s CMs do more than make products, they provide a wide variety of services, including product design and development, specialized manufacturing, and supply chain management. This shift makes it important to find a CM that will be a true partner and give your project the attention it needs.
 

Questions to Ask Your Potential CM How will you deliver this project to us successfully? What resources will be assigned to the project? How will those resources be managed? Is senior leadership aware of my project and involved in resource allocation? Who will be on the project team? What experience do they have? How is the company structured? Are there any plans for your company to be acquired? What types of systems do you use to mitigate risk and keep the project running on time? What supply redundancies are in place? How will you meet project deadlines? How can I be sure the project will receive adequate attention?

Like many other industries, contract manufacturing has been experiencing market consolidation through acquisitions. This trend has led to medical device companies finding themselves working with CMs that are larger and more complex than the OEM itself. Although it may be tempting to judge a CM by its size, it’s important to look carefully at the CM’s organizational alignment around execution, senior leadership engagement, program management culture, commitment to projects large and small, and processes in place to manage risk.
 
Finding the Right Match
When selecting a CM, look for a company structured around and focused on delivering your project in the best possible way. Due to the current market consolidation, you also want to consider whether your CM is preoccupied with having just been acquired or is looking to be acquired.
 
It’s important to partner with a CM that has the capabilities your project requires and is willing to call on its network of suppliers to find the best solution for the project. For example, a CM may have the capability for in-house design, but it should also be willing to outsource design when there are specialized needs. No single design group is the best and lowest-risk option for every application. This applies equally to assembly systems and mold building. Focus should remain on bringing the best possible solutions together, which minimizes overall project risk.
 
Ensuring Successful Execution
Many OEMs simply request a quote for certain volumes of product that are needed monthly or quarterly, but it is important for the OEM to understand how a CM will execute the project. In looking for a company that is truly dedicated to your project and will offer high-touch and high-technology service, you must know how resources will be allocated, who will work on the project, and whether the senior leadership team is aware of the project and involved in allocating resources.
 
Having a personal relationship with members of the CM’s senior leadership team can help make your project successful. If the senior leadership team and the CEO are aware of your project and its status, they can make sure necessary resources are available from the start and can quickly reallocate resources in response to changing needs. Senior leadership can expedite hiring or equipment purchases because they are aware of needs as they arise and may not have to go through a lengthy budgeting process to secure what is needed. At a minimum, there should be a clearly defined escalation process early in the program, ensuring the OEM has access to senior leadership.
 
You should meet with and have confidence in the program manager who will be assigned to your project. Some CMs employ 1,000 people at one site, but most of these people work on a few large projects. It’s critical to know how many people will work on your project and who will make up the team. Will your project team be mostly new employees or interns, or will it be experts with years of experience? Your project should be resourced with the people it needs.
 
The Flexibility to Handle Risk
Every project comes with risks. To ensure these risks don’t derail a project, the CM should create a sound plan that details items that might affect the project’s execution for delivery. The CM should speak in detail about what resources will be needed at what times. For example, are quality engineers available at key qualification times during launch? Proactive CMs will make critical decisions beyond those required to meet specifications and will look ahead to mitigate risks.
 
In addition, there should be a system in place for regularly reviewing each project to head off any problems. Ideally, this involves the program managers meeting with senior leadership to go over the status of each project and what could be done better. For example, could something be improved to ensure the product is ready on time or even early? When a project is running behind, it can be challenging to get it back on track. A formal project portfolio management process helps avoid firefighting. Look for a CM with the flexibility and willingness to reallocate resources to get projects completed on time.
 
The supply chain is another important aspect of mitigating risk. A CM that stays connected with its material suppliers will have the information necessary to plan for any problems or delays tied to the supply base, thereby reducing risk. Redundancy is also important so alternative suppliers can be used when needed without affecting the overall project. Check with the supply chain partners and see how they like working with the CM. If they are not satisfied with the CM, chances are you won’t be either.
 
Conclusion
With the recent consolidation of CMs, it is more important than ever to find one that is the right match and as committed to your project as you are. Look for a CM that is organized in a way that encourages agility and proactively looks for the best ways to meet your project’s needs. To ensure successful execution, it is important to know what resources will be dedicated to your project and who will make up your project team. CMs with the flexibility to manage risks will keep projects on track, reallocating resources as needed. They should have a plan to proactively mitigate risk and a senior leadership team that stays abreast of each project’s status. Finding a CM that works with you as an equal partner and is truly focused on your project’s success will help make sure quality devices are delivered on time.

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Mike Fritschy joined SMC Ltd. in May 2017 with over 25 years in the medical device market working for medical device OEMs and medical manufacturers as executive vice president of operations and vice president of engineering, respectively. Fritschy holds numerous patents for surgical devices. He has a Bachelor of Science in Plastics Engineering from the University of Massachusetts Lowell, a Master of Science in Innovation and Technology from Boston University, and a Program Management Professional certification (PMP) from the Project Management Institute.