Why Outsource Medical Device Manufacturing?

It's time for medical device and life science instrument OEMs to take another look at outsourcing the entire manufacturing process from New Product Introduction through final system test. For years, other industries have embraced outsourcing as the manufacturing strategy of choice. While the cost benefits of outsourcing are well documented, the solutions offered by most outsourcing companies fall short of what medical device and life science instrument OEMs require. Paramit offers fully integrated engineering, manufacturing, and post-manufacturing services, allowing us to take complete ownership of the finished product and to reach a higher standard of manufacturing excellence than is typically found in an outsourced manufacturer.

The Cost Advantages of Outsourced Manufacturing

The key advantage of the outsourced manufacturing model is that it optimizes the use of resources. Simply put, an outsourced manufacturer serving multiple OEMs can amortize equipment, talent, and information systems over a large number of OEMs and their products. Because of this broad base, an outsourced manufacturer has the flexibility to rapidly absorb changing volumes of individual products. In contrast, OEMs can find it difficult to quickly hire and train labor when volumes increase rapidly and painful to lay off trained and experienced employees when volumes decrease -especially when it is unclear whether the decrease is temporary. Through long term relationships with suppliers and high volume purchases, the outsourced manufacturer also has greater buying power than most OEMs.

So, if outsourcing is so cost effective and offers a higher level of flexibility when demand fluctuates, why do so many medical device and instrument OEMs choose to build in-house?

Why Don't Medical Device OEMs Outsource?

Because most outsourced manufacturers do not have the technical resources or infrastructure to earn the confidence of the OEMs.

Typically, manufacturers do not focus on the medical device and instrument industry and therefore do not make the investment necessary to build complex, FDA-compliant products. Medical device OEMs need expertise and experience in FDA compliance, mechatronics, fluidics, optics, PC assembly, system assembly, and test development. They also need an outsourced manufacturer that can oversee the manufacturing process throughout the entire product lifecycle. While electronic manufacturing services (EMS) companies specialize in PCA assembly and contract manufacturers (CM) specialize in mechanical assembly, neither can offer a complete solution under one roof.

The Paramit Outsourcing Solution