• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Opinions
    • Top 30
    • Research
    • Supply Chain
    • Device Sectors
    • Directory
    • Events
    • Resources
    • Microsites
    • More
  • Magazine
  • News
  • Opinions
  • Top 30
  • Research
  • Supply Chain
  • Device Sectors
  • Directory
  • Events
  • Resources
  • Microsites
  • Current / Back Issues
    Features
    Editorial
    Digital Edition
    eNewsletter Archive
    Our Team
    Editorial Guidelines
    Reprints
    Subscribe Now
    Advertise Now
    Top Features
    Electrifying Healthcare: A Look at Electronics Manufacturing Services for Medtech

    Smooth Operator: Addressing Machining's Talent Gap

    Valued R&D: The Transformation of Medical Device Research and Development

    Additive Manufacturing: A Tool for Driving Innovation

    Layering Metal: Additive Manufacturing in Medtech
    OEM News
    Supplier News
    Service / Press Releases
    Online Exclusives
    Press Releases
    People in the News
    Product & Service Releases
    Supplier News
    Technical Features
    International News
    Videos
    Product & Service Releases
    Live From Shows
    Top News
    Novo Nordisk Digital Insulin Pen Now Compatible with Abbott's FreeStyle Libre CGM

    FDA Clears Intuitive Surgical's Lung Cancer Biopsy Robot

    NxStage Must Divest Bloodline Tubing Biz to B. Braun to Complete Fresenius Merger

    Edwards’ PASCAL Transcatheter System Receives CE Mark

    FDA OKs Philips' DigitalDiagnost C90 Digital Radiography System
    From the Editor
    Blogs
    Guest Opinions
    Top Opinions
    Electrifying Healthcare: A Look at Electronics Manufacturing Services for Medtech

    Smooth Operator: Addressing Machining's Talent Gap

    Valued R&D: The Transformation of Medical Device Research and Development

    Additive Manufacturing: A Tool for Driving Innovation

    Layering Metal: Additive Manufacturing in Medtech
    Top 30 Medical Device Companies
    Top Top 30
    Top 30 Global Medical Device Companies

    1. Medtronic plc

    2. Johnson & Johnson

    3. GE Healthcare

    4. Royal Philips
    Market Data
    Datawatch Column
    Salary Survey
    White Papers
    Top Research
    Discerning Medtech’s Path in 2019

    Disrupting the Outsourcing Model

    Election Impact and the Beginning of the 116th Congress

    Is Your Packaging Provider Prepared If Disaster Strikes?

    A Primer for Manufacturers Adjusting to Value-Based Healthcare
    3D/Additive Manufacturing
    Contract Manufacturing
    Electronics
    Machining & Laser Processing
    Materials
    Molding
    Packaging & Sterilization
    R&D & Design
    Software & IT
    Testing
    Tubing & Extrusion
    Cardiovascular
    Diagnostics
    Digital Health
    Neurological
    Patient Monitoring
    Surgical
    All Companies
    Categories
    Company Capabilities
    Add New Company
    Outsourcing Directory
    EG-GILERO

    Forefront Medical Technology

    K-Tube Technologies

    Propel

    Spectrum Plastics Group
    MPO Summit
    Industry Events
    Webinars
    Live From Show Event
    Industry Associations
    Videos
    Career Central
    eBook
    Slideshows
    Top Resources
    Is VR the Solution for Addressing Chronic Pain?

    Design Sophisticate

    Sintered or Expanded—Which PTFE Is Best Suited for Your Device?

    Best Practices Spotlight: How to Grow Your Products Globally

    Connected R&D
    Companies
    News Releases
    Product Releases
    Press Releases
    Product Spec Sheets
    Service Releases
    Case Studies
    White Papers
    Brochures
    Videos
    Outsourcing Directory
    PTI Engineered Plastics Inc.

    Creganna Medical, part of TE Connectivity

    Ulbrich Stainless Steels & Special Metals Inc.

    K-Tube Technologies

    EG-GILERO
    • Magazine
      • Current/Back Issues
      • Features
      • Editorial
      • Columns
      • Digital Editions
      • Subscribe Now
      • Advertise Now
    • News
    • Directory
      • All Companies
      • ALL CATEGORIES
      • Industry Associations
      • Company Capabilities
      • Add Your Company
    • Supply Chain
      • 3D/Additive Manufacturing
      • Contract Manufacturing
      • Electronics
      • Machining & Laser Processing
      • Materials
      • Molding
      • Packaging & Sterilization
      • R&D & Design
      • Software & IT
      • Testing
      • Tubing & Extrusion
    • Device Sectors
      • Cardiovascular
      • Diagnostics
      • Digital Health
      • Neurological
      • Patient Monitoring
      • Surgical
    • Top 30 Company Report
    • Expert Insights
    • Slideshows
    • Videos
    • Podcasts
    • Resources
    • eBook
    • Infographics
    • Whitepapers
    • Research
      • White Papers
      • Case Studies
      • Product Spec Sheets
      • Salary Survey
      • Market Data
      • Datawatch Column
    • MPO Summit
    • Events
      • Industry Events
      • Live From Show Events
      • Webinars
    • Microsite
      • Companies
      • Product Releases
      • Product Spec Sheets
      • Services
      • White Papers / Tech Papers
      • Press Releases
      • Videos
      • Literature / Brochures
      • Case Studies
    • About Us
      • About Us
      • Contact Us
      • Advertise with Us
      • eNewsletter Archive
      • Privacy Policy
      • Terms of Use
    Columns

    Secret Confessions of a Service Provider

    Related CONTENT
    • 15-Year Anniversary: A Reflection on Industry Changes Over MPO's Lifetime
    • The Human Cyborg, Circa 2033
    • The More Things Change…
    • The Future’s So Bright, You Gotta Wear Shades
    • Addressing Peak Issues in Medtech
    David C. Robson, Principal, Robson Advisors11.26.18
    Most medical device OEMs, large and small, develop new products only occasionally. Their teams often split time between new product initiatives and sustaining business. As a result, these teams aren’t necessarily well-versed in the product design and supply process or the common methods of facilitating the work. External design and development resources, which practice new product development all the time, can be very helpful in getting OEMs through the process faster and with less risk. However, managing external resources is different than managing internal team members, especially on large programs.

    Client companies may have wildly different experiences with the same service provider. This isn’t due to randomness, but rather how the client actively manages the relationship and tracks the work with the provider. A project’s nature and its fit to the provider’s skills and experience will have a significant impact, for better or for worse. Likewise, some projects are technology development, some are “turn the crank,” while others are all about design for manufacturing. Finding the right fit is perhaps the most important aspect of hiring a provider.

    During the recent MPO Summit in Broomfield, Colo., a group of four longtime service providers discussed the best and worst ways to handle the client-to-service-provider relationship. All have been responsible for establishing agreements with client companies and overseeing the progress of outsourced projects including both technical and business-related details. All had great and not-so-great project and client experiences to draw from. The goal was to provide helpful insights to client companies who may be considering outsourcing part or all of the product design-to-development-to-supply process. The discussion involved money matters, communication methods, and anecdotes from decades of providing services to client companies. The panelists included:
    • David Durfee, Ph.D., co-founder of Bay Computer Associates
    • Christian Haller, CEO of The Ravenoye Group
    • David Robson, principal of Robson Advisors
    • Jake Rost, principal of See Level Consulting

    Q: What common mistakes do clients make?
    Durfee:
    Once a client hires a contract design and development firm, it must continue to invest time and effort to ensure the right results. At a minimum, it should require a weekly status report from the provider and have periodic meetings to make sure things are going well.

    The client must tell the design and development firm exactly what it needs. Assumptions can kill a working relationship. For instance, if the client company needs a prototype to raise money before it can pay for the rest of development, that should be the initial quote. The work focus and techniques for an investment-grade prototype are often significantly different than pursuing a solution going directly into production.

    An experienced provider will ask for and try to understand the client’s underlying motivations and may be able to direct the client toward a better path to success given budget and schedule constraints and future funding points.

    Haller: A comprehensive RFQ is critical to ensure accurate and comparable quotes are given by prospective providers. The client team will need to invest time and effort to tease out all the project’s details. This also means spending significant time with prospective vendors to ensure understanding.

    Selecting the low bid is not the answer. Poor vendors will bid low on cost and schedule to get the project, then request adjustments as reality sets in. They may do this knowingly or unknowingly. Often these types of providers are learning as they go.

    The client must actively participate in provider activities and not wait for status meetings.

    Robson: Product development is inherently uncertain. This can be easy to forget when feasibility work has already proven clinical effectiveness or functional potential. The client must create a contingency budget to help minimize the impact of the unexpected.

    Being smart doesn’t mean a client company’s team leader knows how to run a project. There is a temptation for young startup companies to rely solely on their own ideas. The client company should lean on and benefit from the providers’ experience.

    Don’t assume the provider always has the client’s best interests at heart. The vast majority of providers are honest, ethical, and hardworking groups. But they occasionally have competing interests such as meeting billing goals or juggling overlapping projects—pay close attention.

    Make sure the hardest questions are answered before the pretty pictures are drawn. There are numerous stories of client companies who fall in love with an early rendering of their device only to discover it’s impossible to make in reality. Worse, the client company remains convinced the early rendering must remain the target and the technical team burns time and budget working to conform to an unreasonable goal, resulting in big excursions from the budget and schedule.

    Don’t assume the outsourced product developer knows how to retire risk properly.

    Rost: Clients shouldn’t start the RFQ process before supplier qualification is completed. The supplier qualification process is often exclusively quality system driven, but should also consider the supplier’s business health. A client should select a supplier suitable for the immediate future, not one it thinks it needs in three to five years. The attention given to the client may suffer otherwise.

    Q: What common mistakes do service providers make?
    Durfee:
    When there’s a “fork in the road,” the client might think they know the best path based on intuition, but could make a big mistake if the provider isn’t up front with the risks/costs related to program changes. This may not be caused by devious motives; they might not think they need to convey underlying details and information. It’s important to request the pros and cons as well as risk and cost differentials between different options.

    Service providers don’t like to give bad news and may delay notifying the client about problems like going over budget. However, when given the information in a timely fashion, the client may be able to adjust the project with design requirement changes the provider didn’t know would be acceptable.

    Haller: Most providers don’t allow for realistic contingency. Client companies should specifically ask what, if any, contingency budget is included in an estimate.

    Service providers often don’t call out all deliverables included in their estimates and pointedly identify items the client will likely need but aren’t included.

    Providers may attempt to grow the business into non-core areas via client projects—effectively learning on the job. The client must probe for specifics and, when warranted, meet the purported experts to get a sense of how well-suited the provider really is.

    Robson: Service providers have the tendency to overbook themselves to avoid having their resources go unused and un-billed. This may result in slower-than-desired progress from the client’s perspective.

    Providers must be watched and managed so they don’t stray off the main objectives. Regular communication and review of specific work details is a way to avoid this common problem.

    Rost: The large providers may talk themselves into taking a small project (below target) and the small providers may talk themselves into taking a large project (2x to 3x above their target). The client is the one responsible for making sure there is a match between the scale of the project and the capabilities and scale of the provider.

    Sometimes providers can accommodate too many supply chain relationships, reducing their abilities to monitor suppliers adequately and may also compromise their ability to demand competitive pricing.

    Q: As a service provider, what don’t you want a client to know?
    Durfee:
    A provider may charge a premium for client companies with little or no experience in design and development. This may be due to anticipated “hand holding” and extra decision-making cycles caused by the client’s lack of experience. An experienced member on the client’s team helps avoid this.

    The provider’s internal program review system may not work very well. Just because a vendor describes an internal review process doesn’t mean it’s effective. The client should ask to see examples.

    Haller: The success of a client’s outsourced project is dependent on the provider’s project manager. If the provider won’t identify the project manager, move on.

    The provider’s financial situation matters. Pending lawsuits, being up for sale, expansion plans, shaky financials, change in ownership, SEC matters, and/or board issues may cause issues for the client’s project.

    Providers may share a case study, hoping the client assumes they did the whole project rather than a portion. The client should ask for the specifics of what the provider did and, just as importantly, if the employees that worked on the example project remain.

    Robson: Even if the provider is run by honest people, their budget and schedule projections can be wildly off. The more complex the program, the wider the margin of error. Seeing how a provider generates their budget won’t necessarily guarantee an accurate estimate, but it will help the client understand their reasoning and probe for weaknesses.

    Rost: Not everyone on a provider’s team is an “A player.” You should review the names and experience for everyone assigned to your project. For the right sized project, you can pick your team but you will need to ask for this.

    Not all provider capabilities are equal. If the provider began as a design firm that adds manufacturing, design is likely their strength. If the provider began as a manufacturer that adds design, manufacturing is still likely their core strength and their design capabilities may be weaker or perhaps outsourced to a third party.

    If a provider is acquired, it will definitely have an impact on the client’s business or project, regardless of what the provider or acquirer says.

    Q: What advice or recommendations can you share concerning working with service providers?
    Durfee:
    Ask if the provider will have permanent employees working on the project. Assign somebody to be responsible for the project and to provide timely answers to the provider’s questions.
    Treat the relationship between client and provider like a marriage. A mutual trust can be a great experience. If you are adversarial, it can be a big problem. Choose people that have a good reputation and you feel comfortable with.

    Haller: Don’t believe any proposal without a lot of vetting and time with the project team. Provide project approval in phases. Each phase should fully wrap up before the next phase begins.

    If a deliverable isn’t explicitly stated in the contract or proposal, don’t expect it. For instance, don’t expect them to provide “everything” needed for your 510(k). Get specifics in writing.

    The provider must be plugged into an experienced regulatory team—either the client’s or another third-party group. Both sides also need an executive member to discuss the project regularly.

    Robson: The client needs experienced program management to integrate the activities of providers and the client’s in-house team. If this is not a core competency, consider retaining an external program overseer to fill the gap.

    Check the billed hours and expenses every month. Mistakes can be made. The provider may not be diligent about finding excessive billing hours or expenses. Regular double checks and probing questions can help stay on top of these potential issues.

    Insist on knowing the hourly rates used to estimate and the hourly rates and credentials for all resources billing to a project, and a weekly or biweekly check-in that includes notes and minutes written by the provider.

    Rost: The proposal the client has the most confidence in should be the winning proposal, regardless of price or schedule. Encourage and enforce candid communication from day one. A provider that doesn’t provide a transparent view of the project is a recipe for disaster. 


    David C. Robson, a principal at Robson Advisors, has spent 30 years concentrating on medical device development. Seventeen of those were spent working for a full-service product development firm where he interacted with both large and small medical device companies and reviewed statements of work and requests for quotation, wrote proposals, and negotiated hundreds of work agreements. Robson and his partners now offer product development guidance and advocacy to early-stage medical device clients.
    Related Searches
    • mpo
    • medical
    • ceo
    • company
    Related Knowledge Center
    • R&D & Design
    Suggested For You
    Foregoing the Rainbow for the Pot of Gold Foregoing the Rainbow for the Pot of Gold
    The Regulatory Outlook for 2019 The Regulatory Outlook for 2019
    Images from Medica/Compamed 2018, Day 3 Images from Medica/Compamed 2018, Day 3
    Images from Medica/Compamed 2018, Day 2 Images from Medica/Compamed 2018, Day 2
    Compensation Complacency? The Medtech Industry Annual Salary Survey Compensation Complacency? The Medtech Industry Annual Salary Survey
    Extrapolating Extrusion Extrapolating Extrusion
    DNA of a Successful and Innovative Product Development Program DNA of a Successful and Innovative Product Development Program
    Robson Advisors Robson Advisors
    Finding Balance by Design Finding Balance by Design
    Second-Generation Products—Pressing the “Re-Do” Button Second-Generation Products—Pressing the “Re-Do” Button
    Addressing Peak Issues in Medtech Addressing Peak Issues in Medtech
    The Future’s So Bright, You Gotta Wear Shades The Future’s So Bright, You Gotta Wear Shades
    The More Things Change… The More Things Change…
    The Human Cyborg, Circa 2033 The Human Cyborg, Circa 2033
    15-Year Anniversary: A Reflection on Industry Changes Over MPO 15-Year Anniversary: A Reflection on Industry Changes Over MPO's Lifetime

    Related Columns

    • R&D & Design | Software & IT
      Disrupting the Outsourcing Model

      Disrupting the Outsourcing Model

      The rise and relative success of companies dealing in cloud-based systems has revolutionized how we handle data. This is prompting a shift away from traditional software, hardware, and legacy systems, and enabling companies in new and unexpected ways…
      Steve Maylish and Shannon White, Fusion Biotec 01.31.19

    • Contract Manufacturing | R&D & Design
      The Future of Medical Device Design Companies

      The Future of Medical Device Design Companies

      Device design and regulatory services companies are of growing significance in the medical device supply chain. As recently as 10 years ago, device design was the near-exclusive realm of medtech OEMs. Once considered core to product success, design w…
      Tony Freeman, President, A.S. Freeman Advisors, LLC 11.26.18

    • R&D & Design
      DNA of a Successful and Innovative Product Development Program

      DNA of a Successful and Innovative Product Development Program

      There are many ways to successfully develop new and innovative product solutions. Projects can be oriented to meet a clinical need via a new technical approach or better satisfy a business opportunity. They can make previously unavailable treatments…
      David C. Robson, Principal, Robson Advisors 10.16.18


    • R&D & Design
      Building a Strategic Patent Portfolio that Doesn’t Break the Bank

      Building a Strategic Patent Portfolio that Doesn’t Break the Bank

      A strategic patent portfolio is crucial to a medical technology company’s growth and survival, and also provides numerous business advantages. Patent portfolios are often the driving force in mergers and acquisitions (M&A), public offerings…
      David J. Dykeman, Co-chair, Global Life Sciences & Medical Technology Group, Greenberg Traurig LLP 09.07.18

    • R&D & Design
      The Impact of Changing Healthcare Economics on Device Design

      The Impact of Changing Healthcare Economics on Device Design

      As the world’s largest and most profitable medical device market, the United States is economically essential for the launch of new products. OEMs must be successful in America to fund global marketing and R&D. Yet the U.S. is topping out i…
      Tony Freeman, President, A.S. Freeman Advisors, LLC 09.07.18

    • R&D & Design
      Finding Balance by Design

      Finding Balance by Design

      Every team developing a new product sets out determined to design the best product possible, but the word “best” isn’t precise enough. Products are subject to business realities and constraints, often comprised of many attributes th…
      David C. Robson, Principal, Robson Advisors 09.07.18


    • R&D & Design
      Second-Generation Products—Pressing the “Re-Do” Button

      Second-Generation Products—Pressing the “Re-Do” Button

      Introducing a product involves myriad best guesses and estimations. There is often no way to adequately know everything in advance of release. A design team can conduct research and user evaluations and follow best practices to anticipate user needs,…
      David C. Robson, Principal, Robson Advisors 07.26.18

    • R&D & Design
      The Future’s So Bright, You Gotta Wear Shades

      The Future’s So Bright, You Gotta Wear Shades

      Thirty years ago, CAD was not broadly available. Components, assemblies, and mold drawings were drawn on vellum—with a pencil—and printed on paper. The internet as we know it did not exist. Engineers and buyers had to peruse the Thomas Re…
      David C. Robson, Principal, Robson Advisors 06.04.18

    • R&D & Design
      To Clinical or Not to Clinical, That Is the Question

      To Clinical or Not to Clinical, That Is the Question

      For simple or well-characterized medical products, it is risk-appropriate and most cost effective to immediately design and engineer the commercial configuration of the device. In these cases, the design would presumably be sufficiently “locked…
      David C. Robson, Principal, Robson Advisors 05.03.18


    • R&D & Design
      Shop Smart: How to Make the Most of the Prototype Phase

      Shop Smart: How to Make the Most of the Prototype Phase

      There are two basic types of people: Those who make sweeping generalizations, and those who don’t. (Actually, there’s a third type—one who opens columns with corny jokes and strains to hear the laugh track over the lonely cricket in…
      Dawn A. Lissy, President & Founder, Empirical 01.30.18

    • R&D & Design
      Five Steps to Successfully Fail Early, Fast, and Often

      Five Steps to Successfully Fail Early, Fast, and Often

      The most successful innovators throughout history used a process called ideation in order to create products that make our lives better and more enjoyable. Thoughtful ideation shortens the development cycle, improves performance, and reduces cost. It…
      Steve Maylish and Mike White, Fusion Biotec 11.07.17

    • Diagnostics | R&D & Design
      Designing Diagnostic Consumables: Custom or Off-the-Shelf?

      Designing Diagnostic Consumables: Custom or Off-the-Shelf?

      Designing point-of-care diagnostic cartridges has always been a custom affair. Specialized designers and engineers use know-how in assay development, microfluidics, and systems engineering to develop a product from top to bottom. The result is a cust…
      Steve Maylish, Fusion Biotec, and Richard Spero, Redbud Labs 10.05.17

    • R&D & Design
      Charting a Course in Medical Innovation

      Charting a Course in Medical Innovation

      Something obviously was lost in translation. For more than 60 years, the West has found inspiration in the Chinese symbol for crisis. Conventional wisdom avows that the word’s Mandarin translation consists of two characters—one symboli…
      Michael Barbella, Managing Editor 09.01.17

    • R&D & Design
      Medtech Price Strategies: Who Is Going to Pay for It?

      Medtech Price Strategies: Who Is Going to Pay for It?

      Medical device product innovation and pricing strategy must be closely linked. In medtech product development, the three most important questions are: Is there an unmet need that can be answered with a medical device and what is it? I…
      Maria Shepherd, Medi-Vantage 09.01.17

    • R&D & Design
      The Value Creation Roadmap for Medical Technology Innovation

      The Value Creation Roadmap for Medical Technology Innovation

      Translating clinical research and medical technology innovation into a sustainable company is a complex and far-reaching process. First-time entrepreneurs, clinicians, and engineers often don’t appreciate the importance of the many factors invo…
      Steve Maylish, Fusion Biotec, and Scott Hutchinson, StoneCreek Capital 09.01.17


    Breaking News
    • Novo Nordisk Digital Insulin Pen Now Compatible with Abbott's FreeStyle Libre CGM
    • FDA Clears Intuitive Surgical's Lung Cancer Biopsy Robot
    • NxStage Must Divest Bloodline Tubing Biz to B. Braun to Complete Fresenius Merger
    • Edwards’ PASCAL Transcatheter System Receives CE Mark
    • FDA OKs Philips' DigitalDiagnost C90 Digital Radiography System
    View Breaking News >
    CURRENT ISSUE

    January/February 2019

    • Electrifying Healthcare: A Look at Electronics Manufacturing Services for Medtech
    • Smooth Operator: Addressing Machining's Talent Gap
    • Valued R&D: The Transformation of Medical Device Research and Development
    • Additive Manufacturing: A Tool for Driving Innovation
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • privacy policy
    • term and condition
    • about us
    • contact us

    follow us

    Subscribe

    magazines

    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image

    Copyright © 2019 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login