Healing Time
Medical products sector attacks regulatory, performance issues with rich systems mix
By Cole Ollinger, senior contributing editor -- Manufacturing Business Technology, 10/1/2006 6:00:00 AM
The medical device sector wants it all: better, faster, and cheaper performance while achieving full compliance with strict regulations from the U.S. Food and Drug Administration (FDA) and other oversight agencies. Given fierce competition and overall market growth, the quest to meet these seemingly contradictory objectives is as tough as it's ever been.
Susan Lamb, product marketing manager at manufacturing execution system (MES) vendor Camstar, says, "Medical device manufacturers are attempting to launch more new products faster, produce them in higher volumes, and at higher levels of quality. They can't afford to miss on any of those metrics."
With the hot-button issues in this sector being innovation, integration, and quality, Simon Jacobson, a VP with Boston-based AMR Research, says, "In terms of technology investments, the focus will be on manufacturing, ERP, and product life-cycle management [PLM]."
This cross-functional urgency is leading many manufacturers to make large investments in Six Sigma and lean process improvements, and the technologies that support them. Highly complex, finely calibrated products found in the sector—some of them with hundreds of components and intricate, built-in software—demand advanced production capabilities. The good news is that systems integration and consolidation bring relief in terms of regulatory compliance and bottom-line performance.
Focus on products
A closer look at the industry reveals a change in priorities toward product innovation and gaining market share has taken place, says Adam Jura, technology analyst for New York-based Datamonitor, citing a March 2006 report indicating that for the next 12 months, those two objectives supersede perennial concerns of reducing costs and maintaining competitiveness.
"There is a slight shift away from the hard-core focus on lean operations that we've seen," says Jura. "Instead, high priority is being given to product differentiation and time-to-market."
ArthroCare, a Sunnyvale, Calif.-based maker of minimally invasive surgical products, chose a PLM platform from Agile Software to meet its goal of launching one new product per month, while still complying with FDA documentation requirements. ArthroCare is focusing on delivering new products based on rapid modifications of previous designs. As such, it must leverage consistent information across manufacturing facilities in the U.S., Europe, and Central America.
Like many other med device makers, ArthroCare had been reliant on paper-based development processes. "If I was overseas and wanted to know what was happening with a key product development project, I couldn't find out until the next morning," says Michael Baker, CEO. "I would have to track down the right person, who would then have to track down the paperwork."
That paperwork included information vital to FDA compliance, which was often passed around from desk to desk in a red folder. After deploying Agile PLM, however, ArthroCare exchanges product and manufacturing data in real time.
"In our business, product development is the key," said Baker. "Agile made our whole development process much faster and easier to manage because the product data is immediately available to me and all the key decision makers," adding that a single repository of product records streamlines compliance and auditing processes.
Looking to link up
To strike a balance between business and regulatory concerns, med device companies follow two IT tracks: extensive systems integration (including with external suppliers and across multiple sites); and consolidation on a single platform (or very few platforms). The goal is twofold: ensure proper data is captured at each process step, and limit the amount of variability that can creep into manufacturing processes from plant to plant and country to country.
"Linking up PLM and supply chain applications is an imperative," says Datamonitor's Jura. "Vendors are making a strong push for integration, but most manufacturers are some ways off from making it a reality."
One way to integrate is by what AMR's Jacobson calls operations process management, or OPM.
"OPM capabilities—such as real-time event definition, monitoring, aggregation, and data transformation from shop floor and engineering systems—allow companies to execute new workflows that cross the traditional boundaries of manufacturing and enterprise systems, including ERP and PLM."
Chris Parsons, director of marketing for Camstar, concurs: Closing the loop enables increased efficiency and productivity. "If ERP defines what to build and PLM describes how to build it," he says, "MES excels at controlling what you actually build, and creating complete as-built records."
Agilent Technologies is one company closing that loop by means of Camstar's InSite MES. InSite uses bills of material from PLM or ERP systems, then registers components back to those systems for accounting, inventory, or shipping purposes—as well as for batch or lot-number traceability. At Agilent, InSite tracks a 100-step process for which there is essentially no margin for error.
Agilent links the MES to its SAP system to provide the tracking data customers need and live production status Agilent employees want. Today, InSite permeates the entire operation. Many users—including corporate finance executives assessing manufacturing performance, technicians analyzing the quality of specific slides, and sales staff verifying shipments made—access real-time production data.
Upside to overlap
Tyco Healthcare consolidated on Camstar's software to create standardized electronic device history records and establish real-time performance reporting.
"To support our best-in-class products, we needed a configurable application that can adapt to the diverse operations in our 63 plants, which include batch and discrete manufacturing," says Steve McManama, CIO of Tyco Healthcare. "We believe Camstar can enhance Tyco's ability to deliver safe and effective products."
One force behind systems consolidation is the widening overlap between systems previously considered independent.
"The lines have blurred between ERP and MES because of the need for detailed quality data and deep traceability down to the lot, batch, and component levels," says AMR's Jacobson. ERP vendors in particular are acknowledging the shift, as demonstrated by Oracle's inclusion of more manufacturing functionality in its upcoming v12 release.
"While corporate IT understands the value from a total cost of ownership (TCO) perspective, convincing some old-line manufacturing and operations execs that their ERP vendor can encompass the traceability and data-collection capabilities needed in manufacturing is still a challenge," adds Jacobson.
The lure of consolidation is the promise of simplified maintenance, steadier performance, easier validation, and lower costs. In fact, says Raana Abbasey-Grieder, marketing director of life sciences for enterprise vendor QAD, the company's MFG/PRO suite helps manufacturing clients reduce TCO to as low as 2 percent of revenue—roughly half the industry average.
QAD's offerings reflect the broad range of manufacturers' needs. MFG/PRO has dedicated tools and built-in controls for lot/serial traceability, engineering changes, material handling, batch control, lean, and supply visualization.
"Lean actually is our bread and butter," says Abbasey-Grieder. "Our lean applications apply principles of the Toyota Production System, and instill discipline on the shop floor."
Redmond, Wash.-based Medtronic Emergency Response Systems, a build-to-order manufacturer of defibrillators, has been using QAD MFG/PRO since the late 1990s. The system is integrated with bar-code data collection and a rules-based system for quality monitoring. More recently, Spacelabs Healthcare—an Issaquah, Wash.-based supplier of patient monitoring systems—chose QAD to centrally manage key manufacturing, selling, and distribution operations in North America, Europe, and the Asia Pacific.
Finding the right mix of systems to serve medical device manufacturers depends on the nature of the products and manufacturing environments—across the entire range a complexity.
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