Jack Harkins06.10.08
Opportunity Knocks for Contract Manufacturers Offering Design Services
Jack Harkins, Farm Design, Inc.
Design, perhaps more than any other, is an industry of trends. Changes in style and differences in form and function lead to the next generation of products in a given category. When all is working well, design transforms raw, unformed ideas into real products, with a constant ebb and flow of creativity that underlines the emergence of design trends themselves. Designers and engineers create new products and improve existing ones to accommodate the way consumers live and think today.
But what about the time and cost pressures these design trends exert on our business models? There’s a business trend becoming more evident as manufacturers seek to stay competitive and gain market share: the delivery of design and development services to OEMs from contract manufacturers.
This trend is making its way into the medical device manufacturing industry, which increasingly is being propelled by the same trends that drive the consumer industry. What is new practice in the
medical long has been the case in the automotive industry and,more recently, in aerospace. As the demand to reduce healthcare costs grows, medical device manufacturers are being pressured to be
more innovative, cost effective and faster to market. They have to consider various factors, including competitive pressures, time to market, production costs, user-intuitive designs and end-user research. To address these items, medical device OEMs are asking contract manufacturers not only to be in alignment with, but also to supply the development services.
Adapting to a Newer Model for This Industry
The medical device industry is somewhat unique in that it most often leads with new technologies and applications. In other areas, however, it follows—particularly regarding industrial design trends and outsourcing through a company’smanufacturing base.
Large medical OEMs increasingly are looking for one-stop shopping, a practices that enables them to get their design, engineering, regulatory, testing and manufacturing completed in one place.
Meanwhile, contract manufacturers are looking for ways to bringmore value to the table and grow and adapt quickly—from acting as one-service shops (ie, a niche provider) to being supply specialists
offering a wide range of services, such as product design and development, verification and sometimes validation. Some of the latter specialists are choosing to do so by growing in-house engineering teams organically, and others are following a shorter route by subcontracting or partnering with outside consulting firms.
Contract manufacturers need to understand the opportunities, risks and rewards of moving into the arena of supplying design and engineering work.
As the design responsibility shifts from OEMs to contract manufacturers, it is important to address issues critical to their long-term success—improving product functionality, differentiation from competitive offerings, diversification of product lines, device usability and adaptability to a wide range of constituencies in the healthcare environment. It’s logical to look at the development process—more or less moving from the end of the process and going upstream to the beginning—to see how much a manufacturer can or should provide. The scope of these newservices roughly can be taken on in four areas: preproduction prototypes and verification; engineering development with prototyping and testing; design and human factors; and voice of the customer work and to define user needs.
The first area presents the most obvious capability contract manufacturers must possess: the ability to provide preproduction prototypes and verification so that they meet the product’s original specifications. This comes from contract manufacturers securing the proper manufacturing and materials sourcing, followed by pilot production of preproduction prototypes. Verification testing should ensure the design meets the original product requirements and specifications provided to the OEM.
Focusing on this phase requires traditional early vendor involvement between the development team and the manufacturing engineers who will inherit the finished design.
The second, and typically the largest, service to take on is engineering development. This may be purely mechanical, with related analysis work on many devices, or be a comprehensive integration of systems engineering, mechanical, electrical, software, optics and fluidic engineering. Essentially, some work still will be in the early phases where risks are identified but have not yet been mitigated. Other work will be a predictable execution of identified solutions. Knowing the difference helps to keep teams out of trouble by appropriately managing budget and schedule commitments. The engineering work is driven from the project-planning phase, which includes product specifications through the development and engineering of CAD databases and prototypes as well as through documenting the process in a thorough design history file. A detailed engineering effort isn’t complete until there has been a thorough evaluation and testing of prototypes to ensure they meet the specifications. Contract
manufacturers should aim to procure and assemble prototypes in-house and conduct subsystem tests and integration tests, which include functionality and performance testing.
When it comes to medical devices, there is an increasing emphasis on design. In this area, the trend toward the new business model and design trends themselves overlap. While the business model pushes contract manufacturers into the more creative and perhaps uncomfortable space, design trends in medical product development tend to be less of a leading indicator than that of a follower. While consumer productsmay churn through design trends on a yearly or even seasonal basis to meet
retail needs, most medical devices are targeted for a several-year lifespan and need to be less “trendy.” Increasingly competitive device and industry segments drive the need for design to contribute to product success, and it’s important that contractmanufacturers keep this simple, yet imperative, notion in mind. Conceptual work centers on the contract manufacturer’s capacity to understand the roles of industrial design and conceptual engineering.To do this, they will need to participate in the (often messy) aspects of conceptual industrial design.
A good eye for human factors and the user experience is key to designing products that leave a lasting impact in the marketplace. At aminimum, human factors experts are expected to interact with the intended end users at three points along the process:
• They are critical participants in fieldwork to help define user needs. This can be accomplished through on-site ethnography, traditional focus groups, phone interviews and online surveys.
• They are expected to conduct preference testing of early concepts with customers to get the design team on the right path and provide feedback for subsequent rounds of design refinement.
• During the engineering phases, human factors specialists structure and conduct usability testing of prototypes to ensure compliance with user needs and functionality. This role reduces risk of user
error in end products and underpins a successful development project.
It would be less likely, but of high value to OEMs, if the contract manufacturers reached far enough upstream to provide user research intended to uncover unmet user needs and to define product requirements related not only to product safety, but to efficacy as well. Tackling this strategy phase is crucial to identifying new product and business opportunities for customers and adds to the certainty of a contract manufacturer setting itself apart from the competition.
For most contract manufacturers, the easiest strategies will be those that are technology driven and revolve around technology research, intellectual property development and manufacturing
processes. As part of setting up the rules of engagement before any strategy work, an understanding of who will own any intellectual property created from this work is essential. The contract manufacturers
that also take a user-driven or market-driven approach are going to be the ones that will be able to grasp a broader audience. When they incorporate methods such as observational research and human factors benchmarking, or explore product landscape and seek customer feedback, they become part of a small, highly specialized category of manufacturers. Employing an accurate and clearly outlined research plan for each project essentially will transition the contract manufacturer into this new trend without major bumps along the way.
How to Ensure Success
Clearly, this is a higher-stakes game than many device and instrument manufacturers have been involved with to date, but it’s one that can make them stand out as a unique provider of value to the medical OEM industry.
To those contract manufacturers that see the value of providing added services and diversifying themselves, an essential ingredient is having a strong program manager who either can build or source the best developers to work with both their group and, more important, to satisfy the needs of their customer—the OEM.
In any event, the relationship between OEMs, contract manufacturers and the medical product development companies they partner with needs to be built on three things: trust, contracts and communication. Trust is developed slowly over several projects and comes from the successful execution and understanding of the development process and its components. Contracts need to spell out responsibilities and ownership, especially when it comes to meeting regulatory requirements and assigning intellectual property rights. Good communication can be the most important component
but often is the most underestimated of the three.
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As contract manufacturers evolve into the new development partners in the medical industry, this is a timely opportunity to diversify. When interpreted correctly, this trend can drive significant growth for all
parties concerned. Contractmanufacturers can translate their new services into more clout and more producible solutions.
Give the OEMs more bang for their buck, and contract manufacturers could be pioneers within the inevitable changes in industry trends—instead of following them.