Thoratec Case Study

From Crisis to Confidence

Thoratec is a world leader in therapies to address advanced-stage heart failure. For more than 30 years, the company has been committed to developing advanced medical technologies that improve patient survival and quality of life. Thoratec provides the broadest mechanical circulatory support portfolio to treat the full range of clinical needs, and more than 14,000 of its devices are implanted in patients suffering from heart failure. From acute to chronic heart failure, Thoratec provides a new beginning for patients and their families.

Challenges and Risks

In early 2009, Thoratec received startling news: its primary contract manufacturer (CM) announced that it would be ceasing operations. Thoratec Director of Materials Chris McCall faced a real crisis. Without the CM's scheduled deliveries of components in a few weeks, Thoratec's production line would shut down and orders would not be filled. While the company had contingency plans in place, they had not anticipated such a dramatic scenario.

The situation was even more tenuous due to Thoratec's product requirements. As a Class III medical device manufacturer, Thoratec needed to meet a higher standard of PCA acceptance criteria: IPC Class III. McCall had to find a replacement manufacturing partner that was capable of delivering electronic components suitable for the care of human life.

The Solution

McCall assessed the situation and realized that his secondary suppliers would not be adequate to cover the full extent of production's needs. The only truly viable solution was a manufacturer that could deliver a half-dozen completed boards in a very accelerated timeframe. Thoratec had an existing relationship with Paramit for New Product Introduction (NPI) services, so McCall contacted Paramit CEO Billoo Rataul to discuss the emergency.

The first phase of Paramit's manufacturing the Paramit and Thoratec teams raced to qualify Thoratec's boards. Work that would normally occur over a period of months was compressed into weeks. To manage the intense supply chain and production effort, Paramit led daily conference calls to review product status, and Thoratec brought its engineering team to Paramit to work side-by-side with our engineers.

The Results

As a result of their collaboration with Paramit, Thoratec received its boards in time to meet their customers' most pressing orders. Paramit increased production more than 400% in the first eight weeks. This collaborative effort averted a prolonged crisis and allowed Thoratec to refocus on growth. During the subsequent months, Paramit took on an increasingly larger portion of Thoratec's PCAs, to the point where we now produce the majority of them for high-growth product lines. McCall noted that Paramit didn't simply want to know his minimum order requirements, but rather his highest expectations. Our experience working with Thoratec to produce IPC Class 3-qualified devices led us to implement the higher PCA reliability standard for all of our customers.

Paramit Sets the Standard

Thoratec has benefited in other ways from its transition to Paramit. Deliveries are consistently on time, potential problems are anticipated and preempted, and McCall estimates that he spends 25% less time managing PCAs. He credits these results to Paramit's organizational structure and customer-centric philosophy. Recognizing that Paramit's approach is unique, McCall invited Mano Aryapour, Paramit's Director of Customer Relationships, to educate Thoratec's management team on the standards they should expect from all of their suppliers.

Partners for the Long Term

McCall anticipates that Paramit will continue to play a valuable role in Thoratec's growth. Paramit's strong in-house engineering team collaborates with Thoratec on research and development and product management. McCall sees a bright future with Paramit. "I can find a million suppliers to build a product. But Paramit knows what's truly important to high mix/low volume customers, and looks for opportunities for improvement without being asked. They're at the top of my list for reliability and trust."