The relationship between Medical Device Original Equipment Manufacturers and CDMO’s has evolved over years. Earlier in many cases the association between the two was very weak & volatile. The trust issues, the cost considerations, and various legal aspects of the process were the key factors for reluctance towards CDMOs.
Post-COVID 19 Contract Manufacturing has become a promising option for global Medtech firms. Data reveals that global medical device contract manufacturing will grow at CAGR of 11.5% to reach USD 113.3 billion in 2026 from existing USD 65.9 billion. The low cost of manpower, high quality innovation led manufacturing and ASEAN countries adopting flexible policies of investment are the key reasons that support the predicted growth rate of CDMOs globally.
Let’s explore how Contract Manufacturing has evolved over years:
Before 2010: Outsourcing of components
Initially, Medical Device OEMs were not a big fan of outsourcing the services. The low value-added portions including components, material sourcing was handed over to specialized suppliers of injection molding, extrusion, and metal processing.
From 2010 – 2020: Leaner operations; Greater Outsourcing
Between 2010- 2020 OEMs began to outsource a broader portion of their services. The Contract Manufacturers who were initially involved in smaller operations and component procurement processes now began to integrate design, manufacturing, and assembly of finished devices. The IP-Protected competencies were still kept In-house.
2020 Onwards: Fueling Innovation for an invasive approach
In the current scenario, bigger brands are shifting their focus on marketing, branding & making products viable. They have thrust major portions to certified CDMOs. CDMOs are now critical enablers of the industry’s true strategic mission: Medical Device Innovation. Medical Device OEM’s now leverage CDMOs beyond the supply chain, procurement, and assembly. There are few things to consider before outsourcing your medical devices manufacturing.
Potential CDMOs across the geographies are gearing up to address bigger concerns of the manufacturing process. They are adding capabilities and making processes more robust. Strict Quality control measures, lean sigma manufacturing protocols, CAPA, and willingness to give more than specified at every step of product development cycle makes CDMOs emerge stronger.
By filling the competency gaps in technology, customization and innovation, CDMO’s are leveling up their game. Now, they are offering mastery sophisticated processing techniques, cost-optimized materials, and a vast range of advanced customization options. Sometimes, when you have a hazy idea, experienced CDMOs have potential to realize your idea into a manufacturable product.
Current Medical Device CDMO Trends
As demand for outsourcing development has leaped the regulations associated with the process have become more stringent. The cut-throat competitive pricing, Technological competencies, standards of quality, scalability, and innovation have driven CDMOs to upscale their skill to match industry demands.
The majority of the CDMOs are focusing on shifting territory towards a common goal of being capability rich. Especially, the Asia- Pacific region has a major inclination towards adopting automation and technologically advanced capabilities to scale production.
Vendors with a specialized focus strive to develop full-cycle capabilities to capture a two-fold opportunity. Both downstream & upstream integration has become a major concern for CMs. CMs are taking uphill measures to benefit their customers by consolidating multiple supply chain benefits. Major tweaks in innovation, design, and capabilities have made CMs important in the manufacturing arena.
CDMOs are developing capabilities, technology and adopting a modern outlook towards different aspects of manufacturing. CMs are focusing on industry-led technologies that promise long-term business engagement.
Benefits of Hiring a Contract Manufacturer
Getting a grip over intricacies of manufacturing requires years of experience. Choosing the right contract manufacturer improves profit four folds. On the other hand, the wrong one can increase the product cycle and cost involved.
Here we highlight the benefits of contract manufacturing in medical devices. These are also the key indicators while choosing the right contract manufacturer.
1. Cost Optimization
Choosing a Contract Manufacturer in a developing economy brings cost optimization. The capital costs involved in setting up the manufacturing facility can be moderated by hiring a quality contract manufacturer.
Experienced contract manufacturer holds a grip over design, development, and manufacturing in compliance with US FDA regulations.
3. Reduced cost on skilled workforce
Manufacturing requires skilled workforce on the floor. It requires hiring “n” number of employees to process the manufacturing. On the other hand, when hiring a contract manufacturer, you don’t have to hire anyone or get into managing manufacturing.
4. Enhanced Brand Focus
Production is a very risky, responsible, and core endeavor. It requires a lot of time and effort. When you let a manufacturer take the responsibility for producing the device, you get ample time to focus on marketing & brand awareness.
5. A big room for innovation/improvement
Contract Manufacturing is done by experienced people who handle many similar projects. In such cases, you get many trained minds to deliver the best for your project. For an instance, if you are a startup struggling with funds to realize your product design then you might consider signing up with efficient CDMO.
The experts can optimize the cost by various methods. They may give you a suitable vendor or they may change the raw material to fit quality and cost. Or, they might also give a better solution in terms of technology. Some of the experienced contract manufacturers might also guide you through regulations for faster approval. The contacts and quality of contract manufacturer can leverage an easier market penetration.
At Johari Digital Healthcare, we create solutions which are industry-oriented and withstand industry standards of quality & efficiency.
Thanks for the exceptional article. I also believe that hiring a manufacturer is the right decision that increases your income. For example, I work as an engineer at Engre.co, where it is also possible for both businesses clients in the medical field and for other clients to place orders, where you can hire a manufacturer for your product. I believe that your advice will allow customers to find the best option for their needs.