Choosing a Manufacturer is a Critical MedTech Decision – Here’s Why

by Kris Kelly · Published August 14, 2023 · Updated August 14, 2023

Now that you are in the development process for your medical product, have you considered where the product will be manufactured?

Choosing a manufacturer is one of the key decisions your team will make – let’s take a deeper look to see why.

Making the decision on where to manufacture your product is not easy. There are several factors to take into consideration, and we are here to help you during the decision process. Things to consider are cost, technical difficulty, product quality, regulations, logistics, intellectual property protection, labor force, political and economic stability, market access, cultural and language differences, and time zone.

Many companies make quick decisions to send their products offshore to lower labor cost areas for manufacturing, but is this the right thing to do? It depends.

If your product is technically challenging and does not include a high level of assembly hours, then the answer likely is not to send your product offshore. Technically challenging assemblies should stay close to your engineering team until the technical complexities can be reduced. If the product assembly is not highly labor intensive, you are likely not saving much on the labor cost by sending your product outside the U.S.

If your product is very labor intensive and is produced in high quantities and automation is a “wish” that is just financially out of reach, then you may want to consider locations where labor cost is lower. Manufacturing in Mexico, China, Costa Rica, and Puerto Rico are common considerations. Each has advantages and disadvantages. The labor cost is what usually drive U.S. companies to decide to manufacture outside the U.S., but your decision should not be solely on the cost to manufacture your product.

Labor costs are indeed less than they are in the U.S., but if you are shipping your product back to the U.S. for sales and distribution, you must consider the logistical cost. Shipping product from overseas locations to the U.S. can add a lot of cost to the final product. In addition to basic freight cost, there are the cost of customs and duties, insurance, and potential port charges.

Other things to consider include:

Intellectual Property Protection: As with any outside company that you do business with, perform the proper due diligence. Investigate your potential supplier. What’s their reputation? Do they come recommended by someone you know and trust? Visit the assembly facility. Do they have proper security measures in place? Is your product isolated from other customers’ products?

Skills of Labor Force: This company will be an extension of your company. Do they have the proper labor force to address technical issues should they arise. Ask about the labor turnover. Ask about local Universities and if they have work programs associated with the Universities.

Time Zones: Generally, this is not a significant issue, but it will impact you if you are in the U.S. and you elect to manufacture in Asia. It means that there could be some long days just for regular meetings and communication.

Choosing a Manufacturer is critical It’s essential to thoroughly research and analyze each of these areas before making your decision on where to manufacture your product. Advantu is here to support your decision process, and, with the start up of your new manufacturing line.