In 2020, the phrase "supply chain issues" entered mainstream discussion for perhaps the first time and was discussed in much greater depth. The unprecedented events of that year led to unstocked store shelves and multiple industries impacted by shortages of critical materials. While the unpredictability of supply chains was new to many, it was all too familiar for manufacturing companies.
In particular, medical device manufacturers have faced procurement issues. This industry works with global supply chains, which adds to the complexity. Here's a look at the top procurement challenges for medical device manufacturers and how partnering with a contract manufacturer mitigates those issues.
When a medical device manufacturer enters global procurement, cultural differences typically present the first challenge. Mistranslated terms, misunderstandings about specifications, and working across time zones can all lead to costly mistakes.
All of this serves as a roadblock to forming a solid business relationship. It is tough to form partnerships with distributors, parts manufacturers, and stakeholders. Robust collaboration is necessary to determine the precise lead times required for medical device manufacturing.
Even in the best global supplier relationships, the complexities of international logistics slow delivery times. Each country has its own customs requirements and accompanying paperwork.
From bills of lading to commercial invoices and certificates of origin, the slightest error in documentation can contribute to longer shipping delays. In the worst cases, failure to clear customs leads to seizures. Assembly lines halt while customs officials verify a shipment's contents and value.
Choosing the most efficient mode of transport is yet another challenge. Ocean freight is typically the least expensive but also the slowest. Air freight offers speedy deliveries at a higher cost. Medical device manufacturers must find the right balance for each order across multiple vendors, a time-consuming process itself.
In the global supply chain, each jurisdiction has its own laws and regulatory requirements that govern medical device manufacturing. Goals always focus on patient safety and high-quality materials, but each country takes a different approach.
Medical device manufacturers must spend inordinate amounts of time ensuring compliance with multiple regulations. Failure to do so can result in legal liabilities, product recalls, and reputational damage.
Working closely with global suppliers helps address many of these difficulties, but that's often difficult when time zone differences come into play. Real-time collaboration is practically impossible, as manufacturers must exchange information via email and phone messages. This can lead to multiple workdays lost as each side waits for a response.
The real-world consequences of managing multiple suppliers across time zones include stock-outs and missed deadlines. It can be near-impossible to maintain Just-in-Time (JIT) inventory, a prime lean manufacturing principle.
Ensuring quality control standards is incredibly challenging with international suppliers. Time zone differences make remote inspections inconvenient. This can lead to further problems, like regulatory non-compliance and failed supplier audits.
Currency fluctuations, thanks to ever-shifting exchange rates, add another layer of complexity for medical device manufacturers. The constant ups and downs make it difficult to predict production costs accurately. Suddenly, more expensive materials can erode profit margins.
Most medical device manufacturers sell in the global market, and bad currency fluctuations can enable competitors to perform better. Managing exchange rate risks requires hedging strategies such as forward contracts and currency options, but these approaches have their own complexities.
If you work in the medical device manufacturing industry, you're probably familiar with most, if not all, of these challenges. At least one of them has likely significantly impacted your production schedules. Customs issues or regulatory non-compliance might have actually stopped a product from making it to market.
But what if there was a solution to all of the procurement challenges for global medical device manufacturers?
Medical device contract manufacturing is the answer. The right contract manufacturer has the expertise and resources to deal with international regulations, logistics, and language barriers. Using established relationships with global suppliers, a contract manufacturer optimizes the global supply chain, reducing numerous risks to your medical device business.
By outsourcing to a contract manufacturer, your medical device company frees up internal resources to focus on core competencies, like research, development, and marketing. You don't have to worry about the complexities of global procurement and international supply chains.
The medical device manufacturing space will always be global. No one country or region has suppliers who offer all the required parts and materials for a successful manufacturing operation. The procurement challenges of a global supply chain will always exist. However, medical contract manufacturing partners with experience in international operations can mitigate the risks mentioned.
Sanbor Medical knows the challenges surrounding medical manufacturing and the global supply chain. We offer the medical device industry cost-effective solutions, from design to material selection and global procurement.
To learn more about our medical manufacturing capabilities, contact us today.
