Competing on price alone is suicidal for companies in the developed world. “It is impossible to compete with lowwage countries” is heard everywhere. The typical response has been to eliminate highpriced engineers and simply offer fully automated machine time. Human capital is forgotten. O
nce again, we forget it is innovation and technology that keep businesses at the forefront of their markets. The design and production of components and machines is the cutting edge, not the actual machine. But manufacturers are failing to invest in design tools and engineers that bring life saving and profitable concepts to market.
As manufacturers, we can revolutionize the way medical devices are designed and produced if engineers at medical-device companies and manufacturers work closer together at the initial design phase. This might seem a bit obvious, but then why isn’t this happening with sufficient vigor?
Many large medical-device companies outsourced manufacturing overseas for years and in recent times have either dra- Edited by Victoria Reitz matically reduced or outsourced entire engineering departments. This is a serious threat if, as a vendor, you sell machine time. But for many, it is a great opportunity.
Companies that have invested in engineers have the engineering knowledge, prototype design, and production to launch new medical devices. They provide expertise in material selection, design, processing, and biocompatibility and customers provide the market knowledge, sales vehicle, and regulatory functions.
At the design phase, vendor engineers define the product around “market need” specifications. This removes weeks of non-value added tasks, bringing new products to market sooner. This is also the time to get specifications correct. One day, this mature product will be moved to a low-cost labor country. Do not fight it — service it.
Partnership and risk sharing are not new concepts. Multinational medical companies understand that low-cost labor markets are just another tool in achieving on-time delivery of the highest quality, most competitive product — every engineer’s goal.
Eliminating non-value added steps from the supply chain leads to growth. The investment in experienced design engineers and local production is more than recouped by the customer. Investment in human capital is the key to saving jobs.
Once the industry realizes that we can regain competitiveness by using technology to our advantage, we not only will retain jobs in the U.S., but may also add a few.
SF Medical, a subsidiary of Chase-Walton Elastomers Inc., designs and manufactures a variety of silicone rubberbased products for the medical device industry