Global trends for Medical Device companies – An executive view from Terumo
In a series of interviews conducted by Dan Matlis, President of analyst firm Axendia, Terumo Cardiovascular Group executives Mark Lincoln, VP Global Operations, and Chris Zarecki, Director of Manufacturing, gave their perspectives on several trends they see in the Medical Device industry, and how they are responding and preparing for what lies ahead.
First and foremost, in the midst of cost and quality pressure, Mark said Terumo is focused on creating more and more value for their customers. That means getting the right product to the right region, requiring a new depth of understanding of customers in specific markets. Many medical device companies are looking to emerging markets for growth opportunities, including Terumo. That brings with it additional compliance challenges with local regulations, as well as cost reduction in a more complex global supply chain.
That’s a tough order. Continual cost reduction has a new imperative, with the new medical device tax, and cost pressure on hospitals being passed to medical device manufacturers and suppliers. Terumo has reorganized to look for cost efficiencies of outsourcing and offshoring options, as well as serving emerging markets. They have centralized their organization around cardiovascular products, including product realization, product development, sales and marketing, and operations and supply chain. They are gearing those organizations to support regional requirements, and provide services that can react to local needs faster. Product platforms are created for a particular region, catering to that region’s preferences and requirements. The platform is supported by the global infrastructure, but sourced and manufactured regionally.
Mark says quality and compliance are no longer differentiators, they are a given. The expectations of the FDA continue to increase. Mark warns that medical device companies may be in for a rude awakening if they expect previous successful inspections to indicate they will pass the next time the FDA shows up.
The FDA’s movement towards risk-based inspections is becoming a reality. They will be looking for information electronically around right first time, out of spec, and so on. Real-time electronic process data allows manufacturers to be more proactive. The FDA is expecting manufacturers to have that data, and to have measures in place to prevent quality issues before they manifest themselves in final products.
Chris identified one of Terumo’s biggest initiatives to support their global supply chain, reduce cost, and improve quality and compliance is implementing a manufacturing execution system (MES), the Camstar Medical Device Suite. Critical capabilities they cited were
- Automating fundamental needs of compliance, ensuring
- Documentation needed at the site is present
- Correct equipment maintenance has occurred
- Training is up to speed
- Enforcing the correct execution of the defined process to ensure right first time
- Moving to a paperless system, so employees can focus their attention on building quality product
- Real-time information on quality, so they can take immediate action to correct and prevent quality issues at the source
- Understand real-time productivity issues so they can drive out cost and waste
- Supporting risk-based FDA inspections by providing “stops” in the system when any issues are detected. When out of spec issues or non-conformances occur, the MES stops the process and makes the data available immediately. The fix can be made once and for all so the problem does not reoccur
- Creating a common language that can synchronize regional manufacturing efforts with the global supply chain
The global trends are clear – competition and a global network of regional markets will continue to put cost pressure on medical device manufacturers. Continuing to deliver quality products to meet regional needs and be compliant with local regulations adds another layer demanding excellence. For Terumo, preparation means building an infrastructure to support their demanding environment. Key to that infrastructure is their MES, the foundation for proactive quality and cost efficiency. And it’s paying off for them.
