The medical device industry is discovering that innovation no longer means simply making a better product. Competing and succeeding in the future will require firms to develop and execute a new and far more efficient business model that covers every stage of a product’s lifecycle - from design, manufacturing processes and regulatory submission through distribution and after-market service.

Such is the finding of a Frost & Sullivan white paper, “Strategic Product Life Cycle Management Partnerships as the New Means of Competitive Advantage for Medical Technology Companies”. The research firm suggests that medical device companies will need to meet the growing demands from their customers and shareholders for continuous innovation. At the same time, medical device companies need to maintain fiscal efficiency and profitability, meet detailed regulatory requirements, and manage a highly complex supply chain.

Given this new business reality, a strategic partnership model is becoming an attractive and viable option to help medical device companies streamline operations and bring their innovative products to market quickly, cost-effectively and reliably. By leveraging the manufacturing and supply chain management expertise of their partner, medical device companies can focus their resources on research and development.

Outsourcing in the healthcare industry is not new, but medical device companies have been slow to embrace a strategic partnership model wholeheartedly. Faced with similar economic pressures in the 1980s, the pharmaceutical industry welcomed outsourcing of management, development, and sales to combat the expiry of patents, rising R&D costs and competition from generic drug makers. The partnership model proved to be invaluable to the industry and many of the lessons learned are still applicable to the medical device industry today.

Frost & Sullivan believes that the benefits of strategic partnerships for medical device companies outweigh the risks. “Although, truly strategic partnerships take time and effort to establish and operate, companies that use them effectively can benefit from their partners’ abilities.”

To truly benefit from a long-term partnership, customers may want to consider the following in the planning stage when identifying an appropriate partner:

• Does the partner have experience in highly regulated industries and will it be able to help you navigate changes in the regulatory environment?

• Does the partner have experience in high complexity/low volume production and will it be able to accelerate your go-to market strategy?

• Does the partner have an extensive supply chain network to deliver efficiencies?

• Does the partner have an established infrastructure that will be reliable, flexible and scalable to not only meet but anticipate your needs and market changes?

• Will the partner be able to deliver a quality control system that is transparent and integrated with your own and still be able to deliver you cost benefits?

• Does your organization have an infrastructure that will allow highlevel collaboration, engagement and commitment to the partnership and does this partner organization engender the kind of trust needed to make a partnership work?

Once you have selected a strategic partner – how do you ensure the success of the relationship? From the outset, it is imperative to set clear, attainable, and measurable goals.

Factors for success

Our experience at Celestica has taught us that every customer faces unique challenges. A successful partnership must be jointly defined at the beginning of the relationship and it is crucial that both companies – at all levels of each organization – are aligned on specific partnership objectives.

It’s also important that the list of objectives is not overwhelming. The two companies should agree on the key objectives that are deemed most important, then manage performance toward achieving specific goals – whether that’s cost reduction, optimizing the supply chain or improving time-to-market.

Ongoing assessment is equally critical to the success of any strategic partnership. Recognizing that our customers’ needs are constantly evolving, we interlock quarterly to formally review progress, obtain feedback and understand changes in their priorities.

Aside from gaining operational and cost efficiencies, customers can also take advantage of their partners’ deep regulatory expertise to help meet complex compliance requirements and manage product trial periods efficiently. Partners with an extensive global footprint can share their local market intelligence and guide customers through targeted foreign markets.

New opportunities are emerging globally for the medical device industry but economic pressures and regulatory scrutiny are also looming. Only those companies that can focus on delivering innovation by seeking new and more efficient ways to manage the lifecycle of their products are poised to win.