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EMS Provider Opportunities in the Medical Device Industry
Frost & Sullivan, June 2007, Pages: 75
Market Overview
EMS Outsourcing Gaining Popularity in the Medical Device Industry
The trend of outsourcing production to electronic manufacturing service (EMS) providers is becoming increasingly prevalent among original equipment manufacturers (OEMs) of medical devices in North America as they look for ways to cut capital costs and reduce the time-to-market for new products. Medical OEMs are looking at handing over the complete manufacturing process of medical devices to EMS providers so that they can focus on core business functions such as new product development and marketing. At the same time, EMS providers are expanding beyond mere assembly manufacturing for OEMs and are structuring their services to include the design and engineering aspects of the production process. They now offer product design, prototype building, testing, and repair and warranty services.
'While assembly manufacturing earlier formed the core of an EMS provider’s business, key concepts such as design and engineering are being implemented as well,' notes the analyst of this research service. 'The 'design for' concept – which includes design for assembly, testing, manufacturability, and design for supply chain – is very viable and important to increase value for an OEM.' EMS providers are also focusing on becoming more compliant with the many regulations that govern the medical EMS market so that they can offer more manufacturing services and solutions to OEMs. Most of the leading EMS providers have ensured that their manufacturing facilities have been established in compliance with regulations such as ISO 13485 and the stringent guidelines set by the Food and Drug Administration (FDA).
Strong Growth in the Medical Device Market Indicates Good Opportunities for EMS Providers
'The average age of the population in the United States is increasing and there are an estimated 78.2 million baby boomers in the country,' says the analyst. 'This is expected to have a strong impact on the medical device market and greatly increase outsourcing opportunities for EMS providers.' Growing incidences of heart and respiratory disease will provide opportunities for increased production of cardiovascular and respiratory devices. Minimally invasive surgery and the emerging neurostimulation segment are also likely to play an important role in generating more outsourcing opportunities for EMS providers. Other high-growth areas include therapeutic devices, endoscopy, infusion systems, diagnostic and monitoring equipment, audiology, and instrumentation devices.
With product innovation and technological advancement constantly taking place in the medical device market, EMS providers will have to keep pace with trends such as wireless capability for hospitals and remote patient monitoring. Incorporating these advancements in medical devices will give EMS providers an opportunity to provide the best possible solutions for medical OEMs. Since the industry is highly regulated by bodies such as the FDA, regulatory compliance is also imperative. However, these governing bodies are likely to become less stringent once manufacturing technology stabilizes.
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