ERP vendors ride medical device surge

Rapidly evolving technology in medical devices and an aging U.S. population with rising health care needs have converged to make medical devices one of the fastest-growing manufacturing verticals. While vendors of manufacturing execution systems are zeroing in on the needs of these manufacturers, ERP vendors also are paying increased attention to the sector.

For instance, ERP vendor IFS recently teamed with IBM to launch a solution initiative for medical device. One ERP vendor that has long focused on the sector—especially on start-ups—is Expandable Software. Its recent wins in the vertical include eyeonics, (formerly C&C Vision); and Velocimed.

"Certain functions, such as serial number tracking, are huge in the medical device field, but with start-ups, the critical thing is to reduce their operations costs," says Jerry Lass, a cofounder and VP of Expandable who recently visited MSI. "As part of that, start-ups demand an ERP system they can implement very quickly so they can start getting product out the door."

Other needed functionality in the vertical includes product data management, integrated quality assurance, and return material authorization, or RMA, according to Expandable. Lass says Expandable's suite also has an interface to some best-of-breed product life-cycle management packages, such as from Agile Software.

The latest release of Expandable's suite features an Advanced Security Module with added functionality that supports compliance with the Food & Drug Administration's (FDA) 21 CFR Part 11 rule on electronic record-keeping. The medical device industry falls under FDA scrutiny.

Lass contends ERP systems with built-in vertical industry functions help reduce operations costs for start-ups, as does easy-to-deploy software in broader areas such as business intelligence.

According to Expandable, start-ups typically spend about 25 percent of their budget on research & development, 25 percent on marketing, and about 50 percent on operations. The marketing and engineering are the areas of differentiation, Lass says, "so they really need to maximize the dollars they spend on operations."