Small business owners in the medical device field are always on the lookout for top outsourcing companies when it comes to manufacturing different components, parts and systems that help them complete their own products and systems.
For example, there are medical outsourcing companies that specialize only in product design and development, regulatory consulting, testing and certification, implementation, and even supply chain management. And within those categories, there are top outsourcing companies that only handle specific functions such as prototyping, 3D printing, certification, sterilization, or even drop shipping and warehousing.
In fact, the practice is so popular and so widespread that medical device outsourcing is expected to grow to $88.2 billion by the year 2025.
There are hundreds, if not thousands, of top outsourcing companies to choose from, depending on your field and the number of units you need in a single day, week, month or year.
Outsource for specialized skills
I did a fair amount of outsourcing while I was at Robroy and other places. Our philosophy at each company was that everyone should “stick to their knitting.” In other words, be good at what you do.
We often outsourced parts that we needed smaller quantities of, as well as parts that required a different process than the one we were using in the main operation. For example, filament winding is very different from injection molding. We were very good at filament winding, so we kept those processes and we outsourced anything that required injection molding. That way, we did what we were best at and hired the people that were the best at their work.
This happens in the automotive industry all the time. The Big Three automakers don’t make all the components in their cars. There are metal casting companies that make their driveshaft, and others that make their axles, and others that make their pistons. But they all come together at precisely the right moment to keep each factory running smoothly.
Manage outsourcing challenges
The biggest risk of outsourcing is in not qualifying the operation you’re partnering with. Another major risk is not having a rigorous incoming inspection process before the products go into your inventory. Because if you’re going to outsource that part of your operation, you have to have the ability to measure the quality and consistency that comes out of the outsourced operation.
For example, we manufactured liners that were placed inside water injectors on an oil rig in the middle of the Gulf of Mexico. Inside the connection is a corrosion barrier ring, which we outsourced to another manufacturer. We were great at making liners; they were great at making corrosion barrier rings.
Or so we thought. Once, when we received the ring for a particular installation, the inspection on the part was somehow missed when it was delivered from the vendor. So we shipped it out to the rig in the middle of the Gulf of Mexico, and the part didn’t fit. And that $130 part brought a $1 million-per-day operation to a halt. Needless to say, we caught an earful and we had the right part delivered to the rig immediately, and we never made that mistake again.
Another challenge with outsourcing is knowing when you should outsource and when you might actually be able to handle it internally with only a little retooling and minor changes to your operations. A situation like this calls for a long talk with your finance people so you can have them run all the numbers to see if it’s more advantageous to outsource versus manufacture in house.
And depending on your production capabilities, who knows? Maybe you could become an outsourcing company for that item yourself.
Ensure quality control
The lesson to be learned from our little oil rig screw-up is to make sure you have a good team of people who qualify the vendor in the first place, and then another team to inspect the parts immediately upon arrival.
One of the qualifications should be whether your vendor is ISO certified. ISO is a standards certification that manufacturers can earn, and it’s focused solely on processes. They don’t care if you make concrete life jackets; they only care whether you make them the same way every time.
Even so, you should still audit them twice a year — especially if you’re dealing with medical devices as they regularly end up in a lawsuit, and you’ll be asked to prove that the devices were made correctly and to proper standards every time. You need a well-documented income and assessment process before items go on your shelf and out your door to ensure proper standards.
Find top outsourcing companies
To find your outsourcing manufacturers, you’ll likely have to sort through mountains of options. There are literally thousands of outsourcing companies in this country alone. Just Google them and your laptop will runneth over.
Once you narrow down your choices, you can meet with them to discuss their capabilities and and ask for recommendations. If possible, and if they’re not working under a non-compete, try to find the top outsourcing companies your best competitors are using. After all, if your competitors are finding success with these outsourced manufacturers, then you should be able to as well.
Ask them about their turnaround time, their average production rate, and whether they’re able to handle rush jobs and peak capabilities.
You’ll also want to know their shipping costs and delivery timeframes. This can be a real challenge if your outsourced manufacturer is 3,000 miles away. Your ground shipping costs will be very high, and you could be looking at a five- or six-day shipping time, depending on their freight carriers.
Finally, be careful with offshoring your outsourced manufacturing. For one thing, there’s a chance the manufacturer you choose will end up copying your product and stealing your intellectual property, and you’ll be creating your own competitor. For another, the logistics of overseas shipping can be a royal pain because you often have to order enough quantities to be able to fill a 40-foot shipping container, which can take a month to fill and another month to ship. This might not be a problem if your need is great, but often the parts you want to outsource are not necessarily the highest volume items you have, so shipping is going to be very expensive and extremely slow.
To find the top outsourcing companies for your particular parts and devices, start with a basic internet search, and check some of the business guides for your industry. And don’t be afraid to talk to exhibitors at professional conferences, and do some good old-fashioned legwork. With enough diligence and research, you can find the top outsourcing companies to help your own company become one of the top in its own field.