Abbott [NYSE:ABT]

Janna Parks

Exciting advancements in today’s medical device industry bring better opportunities to diagnose, treat, and enhance patients’ lives but demand agility in the manufacturing environment. Challenges common in all industries have an additional layer of complexity for medical device companies due to the ever-changing regulatory landscape. Typical cost improvement and efficiency models that allow companies to stay current and maintain the relevance of products in the market are offset by approval times and submission requirements required for medical device innovation.

Beyond the standard supply chain challenges surrounding inventory management, manufacturers also struggle with hardware obsolescence and support for existing technologies. As such, there is an increasing need for last-time purchases of component inventory to support production while the new product is in development. This adds a burden to a company’s ability to manage the buying of outlays and reduce carry-over inventory expenses.

Stronger regulations for medical device approvals ensure product safety and protect users – which is good. However, these increasing requirements do not come without a cost of their own. Current medical device industry trends with advanced technologies include smart devices, wearable devices, less invasive surgical techniques, rapid diagnostic tools, and many more. Each of these incredible advancements in the industry requires time for testing and approval before it can be brought to market; time that can result in component obsolescence due to the unceasing evolution of electronics and hardware technology. Many medical device components will evolve into its next-generation component or become obsolete before a design is approved and on the market.

To grow in the global market, it is essential to find a balance between managing daily business needs and not becoming stagnant in the industry. Dynamic innovation in today’s medical device arena must be coupled with revolutionary manufacturing flexibility just to keep up. “Cost versus quality” is a common conversation in all manufacturing environments, but it does not have to be a push-pull exchange. Phrases like “total cost of quality,” “cost of implementing quality,” and “cost of poor quality” are used often. However, it is essential to remember that balanced goals and partnerships among quality, operations, research & development, and supply chain can change the tone of the conversation from a choice between cost and quality to one with a shared objective.

"Many medical device components will evolve into its next-generation component or become obsolete before a design is approved and on the market"

Principles for ensuring quality are dependent of the principles that drive innovation and cost-savings opportunities. There are three key elements that can deliver effective results across each function: understanding the requirements, understanding the process, and making it measurable.

Requirements plot our roadmap – whether they are customer requirements for innovation and design, process requirements for consistency and controls, or quality requirements for safety and compliance. Knowing the requirements and understanding the source of the requirements drives the “why” behind our actions. Internal and external customers have different requirements that need to be evaluated, and it is crucial to differentiate the “must-haves” from the “nice-to-haves” as well as appreciate the reasons behind the requirements. For example, with Abbott’s HeartMate 3 LVAD, we know that a “must-have” is the ability to use it for destination therapy (long-term) and bridge-to-transplant (short-term) advanced heart failure patients. This flexibility allows us to treat patients as best as we can.

Next, understanding the process—genuinely knowing the “how”—is a primary challenge facing medical device manufacturers. Each process contains nuances and details that can either support or prevent consistency, reliability, and repeatability. The unknowns or subjective variables can drive up costs. Issues such as equipment failures from poorly planned maintenance to scrapped products due to non conformance, and material and time waste can be prevented when the process is fully understood.

Once you know the “why” and the “how,” it is vital to know the desired result, what defines ‘good’? What defines efficiency? If it cannot be measured, how can consistency be maintained? Each output of a process should have a defined measurement for monitoring and controls.

Another element to these three principles is the sequence of implementation. It is common for a manufacturer to jump to a solution or begin applying changes without understanding the requirements of the process. This produces uncertain outcomes, and often the cost is greater than the benefit.

Taking the time to keenly observe what works and what does not understand why and build upon proven foundations will not predict the future, but it can lead to favorable results. Successful manufacturers recognize that cost and quality are not adversaries, and these leaders promote partnerships and balance across the organization.

As the medical device industry continues to grow and technology continues to advance at a rapid pace, manufacturers must be acutely aware of how best to evolve, remain open to embracing change, and stay accountable to the increasing demands of the regulations. The goal of medical device manufacturers is to help improve customers’ lives, and this is accomplished when balanced partnerships prevail.