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There’s been a tremendous leap in general awareness over the past couple of years. About health, lifestyle, medical treatments and technological advances. This underlying characteristic has driven the growth of minimally invasive devices market worldwide. One category of these medical devices is the Endoscope. Endoscopy has become a field of its own, with use in diagnosis and treatment of various disease conditions. In fact, of the $471 Billion Global medical devices market, endoscopes accounts for $10.8 Billion, in 2020. The global endoscopes market is growing at a rate of 8% CAGR while the global medical devices market is growing only at 5% CAGR.
This simply means that innovation and manufacture of endoscopes is becoming increasingly demanding. Original Equipment Manufacturers (OEMs) are being pressurized to come up with endoscopes that are more efficient, easier to use by physicians, causes the least discomfort to patients, and costs as low as possible while the quality remains to be as high as possible. Certainly a tall order for OEMs! So what can a contract manufacturer do to engineer greater value into the system?
Here’s one ‘big’ way for contract manufacturers to deliver ‘value’ to their partner OEMs, in more ways than one!
The Oxford dictionary defines vertical integration as “the combination in one company of two or more stages of production normally operated by separate companies.”
Before the pandemic hit, med-tech companies sourced their supplies from various locations across the country and abroad. The pull of low cost supply sourcing from countries such as China, Philippines, India, etc. was considerable. However, the disruption brought about by lockdowns and cross-border restrictions hit industries quite severely. Medical devices including personal protective equipment, respirators, and many other medical devices could not be manufactured or delivered in time. The shortages in equipment were seen across the world.
Vertically integrated businesses have the privilege of controlling their supply chain. Thus, were able to stay afloat during the pandemic. In addition, vertical integration has the potential to drive up your plant’s productivity, improve visibility and improves risk management. All this naturally means that prices remain under control for the CM as well as the OEM.
Today’s market is a volatile one, predictability is low and changes in product requirements or irregular supplies, product regulations and other external factors have placed medical device manufacturers in a tight spot. However, when Vertical Integration is achieved, both lean and agile systems can be adopted for increased resilience and productivity.
Lean manufacturing means that a lower level of inventory is maintained, and the process of manufacture is shorter – eliminating steps that require additional effort and that produce more wastes. In essence, lean practices will help a manufacturer incur lower costs, lower wastes and reduce delivery time.
Agile manufacturing means that the manufacturer is able to adjust to the changing demands of the market, make upgrades or shift to producing customized products for customers without much downtime. Production lines do not need major re-arrangements, neither will there be any need for investment in new manufacturing or finishing equipment. IT solutions help vertically integrated manufacturers stay in sync to respond without communication gaps. This means that the manufacturer’s arrangements and process flow allows immense flexibility.
Typically a Contract Manufacturer (CM) will have a series of stages to manufacture an endoscope. CMs may procure one or more of these parts from other vendors or even outsource key activities such as packaging and sterilization, while the main production design and assembly process is done in-house.
Parts of an Endoscope includes:
Traditionally the cutting of the tubes to fit the required length or making incisions to add additional channels was done using two methods:
Here are three areas where integration can help make the endoscope manufacturing process lean and also agile.
Cutting additional channels into the tube is challenging with the mechanical and electro-cutting methods. In response to this need, laser cutting, welding and engraving processes have been adopted. Lasers are much more precise and are capable of being used on miniature device parts without heat damage or irregular edges. The laser can cut and also weld precisely, activities such as bonding can also be performed.
It’s apparent that the advantages of adopting Laser technologies will eliminate the need for additional steps, reducing wastes in materials used (Lean manufacturing, example: the polishing of rough cut surfaces will lead to waste of fiber optic cables). Laser machines have different setting for different functions – that can be controlled by a computer interface. Thus allowing flexibility and giving the process a degree of agility.
While the laser machines can engrave label details or graduation marks on endoscope parts, it requires that physical changes be made on the body of the endoscope, which can be undesirable in many cases. The thickness of the walls are an important factor in the proper functioning of the instrument. Since lasers emit heat, laser marking cannot be used on polyurethane, PET or PE surfaces which do not tolerate heat. Computer aided Inkjet printing is another process that overcomes these hurdles. They can be used for printing unique identification marks or serial numbers on each part, which is required for traceability. However, this inkjet printing cannot be done on complex or irregular surfaces. Transfer pad printing overcomes these hurdles since it uses a unique method of delivering medical grade ink onto any surface – regardless of material and surface texture.
Choosing to incorporate a transfer pad printing process or a computer inkjet printing will enable the manufacturer to complete the production process end-to-end without having to outsource to another vendor. That’s reducing an additional step – lean manufacturing in action!
Sterilization is part of the finishing process that is critical for endoscopes or any minimally invasive device. This is because endoscopes have intricate features and each of these parts need to be sterile in order to enter the human body. If not, an infection can break out causing undue complications for patients and reducing the quality of care rendered by the healthcare facility. It’s to be noted that sterilization is necessary despite adopting cGMP manufacturing standards and clean room facilities.
Among the many sterilization methods, gas sterilization with a gas like ethylene oxide (EO) is preferred for its effectiveness. Chemical and heat sterilization is also available however not all parts are heat stable and some parts can hold residues that are undesirable. This process is another that medical device manufacturers frequently outsource. However, amidst the pandemic the demand for facilities offering EO sterilization services has been under high demand. It’s likely that this demand continues, causing delays and spikes in pricing. This is why investing in a sterilization space in the contract manufacturer’s plant, is a great idea. Under these circumstances, in-house sterilization will give the CM greater control and visibility and will enable him to ensure that the sterilization is done under the required FDA regulations without any compromises.
Mckinsey reports that vertical integration in an industry can bring up profitability by 50%. Similar numbers are possible with the medical devices industry, especially with the current demands and market volatility. The initial shift towards becoming vertically integrated can require a big investment, however the immediate and long term profits are hard to miss. With this in mind, OEMs who are looking for CMs ought to consider those that are vertically integrated, such CMs will be able to provide consistently high quality devices, on-time and at reasonable prices.
If you’re looking for a great CM to partner with, talk to our experts today!
