Medical Design Briefs - June 2023 - 44

Why Outsourcing Is in
tions centers, strategically located around
the globe to provide custom solutions for
the most complex challenges and provide
this type of value to its customers
(see the sidebar, " Strength in Many).
In healthcare and medical, high-quality,
reliable supply is the primary objective;
the manufacturing location can be less
important. However, OEMs are increasingly
asking to have a manufacturing
source close to their production facilities
to avoid supply chain disruptions like the
ones experienced during the pandemic.
For this reason, Trelleborg is expanding
its manufacturing and service capabilities
in the United States, Europe, and Asia.
The Medtech Outsourcing Market
The outsourcing market is growing faster than the device market overall.
According to a report by Grand View Research, the global medical device outsourcing
market was valued at $117.5 billion USD in 2022 and is expected to expand
at a compound annual growth rate of 12.1 percent from 2023 to 2030.
Expectations are that rising demand for medical devices combined with increasing
price competition among OEMs and the continued pressure to reduce costs
will drive the outsourcing market and its subsegments during this period.
Designers of implantable medical devices must balance complexity, reliability,
3
power consumption, and costs as they create solutions that improve patient outcomes.
Companies are shifting their focus to making devices more data driven
and patient friendly; therefore, outsourcing non-core activities can help launch
devices faster.
What's Being Outsourced?
Based on services, the outsourcing market is segmented into quality assurance,
product design & development, product testing & sterilization, product
implementation, product upgrade, product maintenance, and contract manufacturing
services.
In addition, increasing complexity in manufacturing is contributing to outsourcing
growth. Manufacturing high-quality and safe devices for patient care is a
major concern of medical device manufacturers. Broader and more encompassing
standards and regulations are driving a high level of inspection in the manufacturing
process for medical devices. This is creating demand for outsourced regulatory
manufacturing services.
What Subsegment Is Growing the Most?
The quality assurance services segment is projected to attain the fastest CAGR
growth of 14.4 percent during the forecast period. The maintenance of an effective
quality management system is an integral part of the production of every
medical device. ISO 13485 governs quality management systems, development,
implementation, and maintenance of the products intended for use by medical
device manufacturers and suppliers. Some medical device manufacturers are
outsourcing quality management services to medical device consulting companies
to ensure compliance and provide high-quality components alongside safe
and effective finished medical devices.
Recommendations for OEMs currently seeking outsourcing
partners
* Ask if your current component supplier can work with you on a project from the
design phase to full-scale production so that you are only working with a single
supplier throughout.
* Involve your supplier during all stages of development from design iterations,
prototyping, production, scale-up, sterilization and packaging. This can ensure
that costs are not designed into the manufacturing process.
* Ask how much experience their experts have, for example: in materials, tooling,
and precision machining.
* Look for a component partner that can collaborate with you to resolve your
problems under one roof and deliver more than just a product.
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One Trend Spurs Another
This demand for outsourcing from
OEMs is spurring mergers and acquisitions
(M&A) on the component manufacturer
side. Many component suppliers,
like Trelleborg, are focused on
acquiring companies that can help round
out their capabilities and geographical
reach as seen with the acquisition of Minnesota
Rubber & Plastics.
Together the trends of outsourcing and
M&A are leading to market consolidation
amongst component suppliers. As stated in
an article by Forbes, companies in the
healthcare industry are participating in
M&A activity to enhance and expand their
core operations, move into new markets,
increase their employee talent pool, and
build customer confidence.2
Conclusion
As medical device OEMs work to meet
the demand for innovative products delivered
to market quickly and cost effectively,
their need to outsource a wide
range of services is growing. When OEMs
decrease their number of suppliers, it
improves the overall quality of the finished
device by simplifying the number
of systems and processes used and cuts
down on costs. Component suppliers
that are prepared to take on all services
from prototyping, design, manufacturing,
and scale-up, to sterilization, packaging,
labeling, and shipping of finished
medical devices will be the ones with
which OEMs increasingly do business.
References
1. " Biopharmaceuticals Market - Growth, Trends,
COVID-19 Impact, and Forecasts (2023-2028), "
Mordor Intelligence, https://www.mordorintelli
gence.com/industry-reports/global-biopharma
ceuticals-market-industry.
2. Jeffrey Bartel, " Healthcare Merger And Acquisition
Trends And Outlook For 2023, " Forbes, February
8, 2023, https://www.forbes.com/sites/forbes
financecouncil/2023/02/08healthcare- mergerand-acquisition-trends-and-outlook-for2023/?sh=7a4c98941d5c.
3.
" Medical Device Outsourcing Market Size, Share
& Trends Analysis Report By Services (Quality Assurance,
Contract Manufacturing), By Therapeutic
Area, By Class, By Region, And Segment Forecasts,
2023-2030, " Report ID: 978-1-68038-279-2,
Grand View Research, https://www.grandview
research.com/industry-analysis/medicaldevice-outsourcing-market.
This
article was written by Andrew Gaillard,
Global Commercial Director - Trelleborg
Healthcare & Medical, Plymouth,
MN. For more information, e-mail andrew.
gaillard@trelleborg.com or visit https://
www.trelleborg.com/en/healthcare.
Summer 2023 Resource Guide

https://www.mordorintelligence.com/industry-reports/global-biopharmaceuticals-market-industry https://www.mordorintelligence.com/industry-reports/global-biopharmaceuticals-market-industry https://www.forbes.com/sites/forbesfinancecouncil/2023/02/08healthcare-mergerand-acquisition-trends-and-outlook-for-2023/?sh=7a4c98941d5c https://www.forbes.com/sites/forbesfinancecouncil/2023/02/08healthcare-mergerand-acquisition-trends-and-outlook-for-2023/?sh=7a4c98941d5c https://www.grandviewresearch.com/industry-analysis/medical-device-outsourcing-market https://www.grandviewresearch.com/industry-analysis/medical-device-outsourcing-market https://www.trelleborg.com/en/healthcare https://www.trelleborg.com/en/healthcare http://www.medicaldesignbriefs.com

Medical Design Briefs - June 2023

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