by Jim Barnes
The medical technology sector offers significant rewards, challenges
Medical technology is an inviting market for Canadian manufacturing firms. As noted in A Medical Fix in the August issue of Shop Metalworking Technology, this $7.1-billion industry is growing across the country. About 1,200 facilities manufacture products like medical, surgical and dental equipment, furniture, orthopaedic appliances and prosthetics.
“There are huge opportunities for any company,” notes Jayson Myers, president of Canadian Manufacturers & Exporters (CME), Ottawa, ON.
While Canada is home to branches of large multinational medical device manufacturers, “more of the actual manufacturing is done at contract manufacturers,” notes Lauralynn McDaniel, industry manager, Medical, at the Society of Manufacturing Engineers in Dearborn, Mich.
“When I speak to people from Medtronic, Saint Jude Medical and Baxter, they’re always on the lookout for new companies to work with,” says McDaniel. A strong background in metrology, measurement and inspection is essential. As well, “you have to be able to offer this market value-added products and services–not commodity items that they can source anywhere,” adds CME’s Myers.
“Often, Canadian companies focus too heavily on the products and not heavily enough on the service aspect,” says Myers. The value-adds that will win you interest from these OEMs might include services, delivery, training or specialized expertise, he says.
Securing a contract will require some homework. “You have to know the supply chain well and figure out where you fit into it,” says Myers. “Nobody’s going to walk into GE and sell them a case for an MRI system.”
Networking is indispensable for a newcomer. Myers recommends investigating the industry associations such as MEDEC and attending conferences. Just walking through a hospital will give you an idea of the products that are in demand, he says.
Innovation is mandatory. “If your customer is a supplier to medical companies, they are trying to innovate and you have to come up with solutions for them,” says Myers. “You have to understand how innovation is done. You want to get in at an early stage, so you’re part of the design process.”
“In the medical industry, a lot of the innovation takes place at small to medium sized companies,” says McDaniel. “The industry doesn’t necessarily have tiers the same way the auto industry does. It’s a little more fluid..”
Manufacturing decisions are handled differently than they might be in other industries. At a medical device company, the product design group tends to make manufacturing decisions, notes McDaniel. “Manufacturing and design are for more integrated in a medical device company. It is much more collaborative. There is a great deal of partnering among contractors on both sides of the border in this industry.”
The hard part
“Canada has one of the most complex environments from a regulatory perspective,” says Brian Lewis, president of MEDEC, Toronto. MEDEC is a national association representing medical technology suppliers.
“It has a good approval process, but it’s one of the most expensive in the world.”
Most suppliers look for IS0 13485 certification in their suppliers, described by McDaniel as a “key credential.”
It details requirements for the medical device design and manufacture management system. It is not simple to achieve and there are costs involved in implementing and maintaining it, but it will establish you as a serious partner to the OEMs.
McDaniel says the emphasis on process validation makes this industry distinct from most others.
“In the aerospace industry, there is quite a bit of regulation. But they don’t have to validate their manufacturing process the same way that companies in the medical industry do.”
That leads to conservative thinking about manufacturing. Once you succeed in getting a process validated, most managers are reluctant to change it. Where in another industry incremental changes to improve efficiency may be welcome, in medical technology you have to make a stronger justification for changes.
International regulations are also a concern.
Since more than half of Canadian production is exported, Canadian manufacturers must be aware of international regulations, especially those of the Food and Drug Administration in the US.
“There are differences,” explains McDaniel. “For example, Canada has four risk classes while the US has three. Knowing where your device fits makes a big difference in what you are required to do.”
Harmonization of standards is an important initiative. “Right now, the approval process has to be carried out separately in each jurisdiction,” says Lewis. MEDEC is a supporter of the Global Harmonization Task Force, which has been in operation since 1992. “Harmonization is a conversation that is going on right now.” SMT
Jim Barnes is a contributing editor based in Toronto.