Three Ways Outsourcing Benefits the Bottom Line While Reducing Risk
As the global market for medical product manufacturing grows, so does the market size for associated outsourcing services. While there are several influences at work, the main drivers for market growth are ever-increasing device complexity, the evolving regulatory oversight environment, and the intense competitive pressure on OEMs to get to market quickly, recoup product investments, and do so while upholding the highest levels of patient safety.
In 2019, the market size for the global medical product outsourcing industry was estimated at $104.5 billionand is expected to grow at a nearly 11% CAGR from 2020 to 2027. In an industry undergoing such change and experiencing such pressure, it’s easy to see why many firms seek competitive edge by outsourcing to an expert partner. Let’s take a closer look at why outsourcing can benefit your bottom line while effectively managing risk.
Accelerated time to market
Put simply, new product development costs money. It represents a substantial investment in a firm’s future, from concept through design engineering, validation, marketing, and more. And according to Accenture, 79% of new products miss their initial launch date.
Getting to market quickly lets OEMs maximize their market opportunity. These OEMs then avoid revenue losses from being late to market or losing market share to competitors.
New product development can stagnate for many reasons. For medical product manufacturers, some of the common pitfalls have to do with validations, challenges or delays in package design, and the complexities of distribution. Consider, for instance, that Millstone’s pre-validated packaging solutions can cut time to market by as much as 50%, and it’s easy to see how outsourcing expertise can make a huge difference in meeting product launch dates.
Faster return on investment
Of course, return on investment (ROI) is closely connected to product launches. Products that get to market in less time (safely) are able to command premium pricing earlier in the product lifecycle. Meeting your launch date represents an enormous opportunity to improve sales and productivity as well as to recoup your R&D investment, which you can then reinvest in the next new product your firm will develop. The benefits go beyond new product launches and into legacy production, too: boosting your velocity with optimized supply chain management and faster inspection can help you get and stay in the black faster, too.
Superior expertise at lower cost
With every regulatory shift, the stakes for remaining in compliance become higher. And, as the market for medical products worldwide grows and competition increases, it becomes ever more imperative for OEMs to control costs.
Yet medical products are highly specialized and exceedingly complex. It is costly to acquire and staff theindustry expertise, technical knowledge, and specialty facilities necessary to be successful in new product development and legacy production.
That’s why outsourcing can be such a powerful alternative, benefitting both your business growth and your bottom line. With the right partner, outsourcing gives you access to some of the best minds in the industry without adding to your fixed labor costs or requiring an investment in new infrastructure. Outsourcing can also help an OEM reduce capacity constraints on its core staff, enabling greater focus on the core competencies that represent the best path to increased profitability.
Not all outsourcing options are equal, though. Contract vendors or outsourcers who are not expert in the medical product industry—in all its complexity and glory—may offer solutions to capacity constraints; but if they’re not strategic partners, they can present issues that drive up risk. Seek out and value specialty industry expertise. It makes all the difference in your outsourcing decision.
At Millstone, we get it. We believe that quality drives patient success and that the expertise of a trusted outsourcing partner can help mitigate risk. That’s why we’ve perfected all the capabilities medical device manufacturers need to get to market. Today we offer post-manufacturing and aftermarket services to more than 50 customers, including some of the top 10 orthopedic companies in the world. We are constantly evolving our processes and services to help OEMs achieve sustainable success. We offer clean room packaging, medical device specific warehousing, finished goods distribution, loaner kit management, advanced inspection and reverse logistics services—all with an unparalleled focus on quality.
What could we help you do better? Learn more at http://millstonemedical.com.
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