053: Your Questions Answered on Selecting Medical Device Manufacturers

Your questions answered: Selecting Medical Device Manufacturers

I’m doing something different this episode. I’ve put together some of my most asked questions since all of you listening might have them, and am answering them here. Got other questions about this topic or others? Let me know. You can send them to aloha@imua-services.com

I get lots of questions on selecting medical device manufacturers. As startups are developing products, they need to select a manufacturer early on so they can work within their parameters so it’s really important to start scoping them out early on.

I’m looking for a manufacturer and have a great idea, can you help me?


I get a lot of questions around wanting to find a manufacturer right away. Before you bother looking up the right fit, you should be sure that your idea is validated, fundable, patentable, feasible, and scalable before starting to think about manufacturing. Once you know that your idea fits all these criteria, you can then start looking for an appropriate manufacturer to help out. If you haven’t gone through this vetting process for your idea yet, I have a free training for you.

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What’s better…. For me to manufacture here in the U.S. or abroad?

The answer depends on several different factors actually. Here’s just some of them:
1. The markets you’re selling into: If you have a heavy presence in the U.S. it might make sense for you to manufacture here or in Mexico vs if your primary market is Asia
2. Annual volumes of units sold: Will you be slowly ramping up production or will you be manufacturing a large volume right away
3. Whether this is a first generation product or not (or that you anticipate changes): If you’ve refined your product several times and anticipate staying with this version several years, you’re probably more confident in running larger volumes.
4. Speed of order fulfillment: How long are you thinking of having people wait for their order? That might impact where you manufacture
5. Space to store inventory: If you’re manufacturing abroad, you’ve got to have inventory on hand so that you can fill the orders. You can practice more of the Just in Time system if your manufacturer is close by

I’m finding that most manufacturers I talk to don’t want my business. Why is it so hard to find a medical device manufacturer to work with?

So it can be tricky to find the right fit. It might be for several reasons. Most manufacturers want large accounts because for them to dedicate space to your line, it takes automation setup costs as well as a space in their facility. They’re looking to make a business decision on how to maximize that space so if they can produce 200,000 units per year at a $2 margin vs 2 million per year at a $2 margin, they will choose the 2 million. However, if your volumes are smaller but their margin is higher like if you had a $12 margin on 200,000 units that would be the better business decision.

Sometimes, these manufacturers will produce several products for one company. Take a larger company like Medtronic for instance. They have several hundreds of products and if the business development rep for a manufacturing company can get one product on board, they know they can probably get several others. When dealing with a small company that only has one product they know that account doesn’t have as much potential.

Different contract manufacturers have different specialties too. I know some that specialize in hardware systems, some that specialize in plastics, some that specialize in on board reagents, and then you have ones that specialize in several methods and materials like heat sealing and laser welding vs compression molding of peek material or working with titanium implants. Some specialize in orthopedics, cardiovascular, or diagnostics so it takes time to find the right one. I have relationships with several of these manufacturers and can help you find the right one.

You’re telling me not to think about finding a manufacturer right away so when should I look for one?

I tell people to not look for one right away because they need to focus on the other things that come first like idea validation, building your business so it’s fundable, making sure it’s scalable, getting funding then scaling the product. You do need to be thinking about manufacturing so you can design for this…. Start to think about the materials that the product will be built out of, the process of how it will be built, and being able to grow with the product. I advise clients to start scoping out a manufacturer once they have a proof of concept and that the idea is feasible. Here’s what that means: When you have an idea and you’re working with someone or a product development firm on design, they will give you design concepts. Together, you’ll review the concepts and decide which one is the best concept, or you can take a little bit from each concept and meld them together to make a new concept. Feasibility is taken into account with these concepts but the feasibility isn’t actually tested until you have a final concept or in some cases you can test 2 concepts. Once you have confidence that that or those concepts will actually be feasible, you can start thinking about how to best manufacture it, what will go into the manufacturing, and start to select a partner.

How much will this cost for manufacturing?

One of the most difficult things that entrepreneurs and startups face is forecasting costs. It’s really difficult because when the product is in early stages and concepts haven’t been developed, it’s pretty much impossible to tell. The best way to get a very rough ballpark estimate is to do some work yourself on the market research, regulatory, IP, and engineering product requirements, then talk with a product development company. Just like these manufacturing companies, I can help you identify one that’s a good fit for you to talk with. They can give you a rough ballpark estimate but know that it’s just that. They’re unable to give you a proper estimate without really getting in there and doing some work on the concepts and feasibility first.

Now I teased you earlier with that free training so here it is. If you don’t have funding yet for your idea, you want to check out the 3 ways to move your medical invention idea forward in 3 days free training. I’ve got 3 videos for you along with a guide to help you get the ball rolling on your idea and get you closer to market. You can get your hands on it here or by clicking the image below:

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I love getting your questions so send them my way at aloha@imua-services.com. I look forward to doing another episode like this. Your questions can be on any topic by the way. Did you like this? Let me know and drop me a note

Host: Meghan Alonso
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Host Company: Imua Services
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Full Transcription:

Recorder: Are you ready to master the waves of medical device product development? Well wax up your surfboard because you are listening to inspired by Imua. Here is your medical device product development expert that Hawaiian hearted hostess who will help you hang ten. Meghan Alonso.

Meghan: E komo mai and aloha! You’re listening to inspired by Imua, where we help you master the waves of medical product development. Each week we interview guest that educate, guide and inspire to give you and your product the skills you need to hang ten. If this is your first time listening, Imua is spelled I-M-U-A and it’s a Hawaiian word. It means to advance forward with passion despite rough waves. There are plenty of those in the medical product development but keep listening because each week we’ve got you covered.

Meghan: So today I’m gonna do something a little different in this episode. I actually never done it before and I don’t know why I should’ve done it earlier so I put together some of my most asked questions around a certain topic and of course I gave this answers before but I thought a lot of you listening might have the same questions and your getting answer just by listening. I want to encourage you that if you do have questions just let me know and it can be about this topic or others or whatever you want to know so send it to send you question to ALOHA@IMUA-SERVICES.COM or you know it would even cooler if you go to my website in the bottom there’s this little button says questions ask here so what that does is you can actually record your voice asking a question and if you do that I’ll put you on the podcast so today I got a lot of questions around selecting medical device manufactures and as start ups are developing products they do need to select manufacture early on so they can work within those particular manufacturing perimeters so it’s important to select one early on. Before we get into that wants some quality networking fun and great drinks I got a few events for you so the first one if you’re gonna be on Minneapolis on April 13th that’s right after the design of medical devices conference in University of Minnesota meet me at Day Block – and we’re hosting the Medtech and Biotech start up meet-up so you can register for that at IMUA-SERVICES.COM/EVENTS again that’s just on my website forward slash events. If you’re gonna be on San Diego on May 1st to the 3rd my good friend – is hosting his 10 ex medical devices again in San Diego and this is a really fun event it’s got great networking, awesome content, ice cream and the focus is really on getting the no people and just how we’re family all going through this together so you can save 30 dollars with the promo code IMUA at checkout and to register you go to medicaldeviceevents.com. Okay so let’s get into these questions so the first one I hear a lot is “Hey I’m looking for medical device manufacture and I have a great idea, can you help me?” a lot of times I say okay lets back up and the reason why is before you bother looking to get the right fit for me in manufacturing you want to be sure with 2 things. You wanna be sure that your idea is validated, that’s its patentable, that’s it’s feasible, that it’s fundable and you can get the money to develop the idea and it’s scalable so if it doesn’t need all this criteria then you need to go back and work this out and once you work those out you can start looking for appropriate manufacture to help out so if you haven’t gone through all of these criteria yet and you’re not a 100% confident in all of those areas. I do have a free training and I did full episode on it last week but I’m gonna tell you about it in the end so keep listening and I’ll give you that link towards at the end of the show. So the next question what’s better for me to manufacture here in the US or abroad? And this one is a big question and it’s very complicated and I can probably do a whole episode on this. We can talk about it in on hour on just this topic alone but for the sake of time we’re just gonna cover briefly 5 of these so here’s 5 factors so number is the market you’re selling into so if you have very heavy presence here in the US maybe it does make sense for you to manufacture here in the US or Mexico if you’re primary market is here however if you’re selling in Asia or South East Asia or India. A lot of times with logistics just get complicated so maybe manufacturing abroad is your best decision. Number 2 is in your volumes of units sold so a lot of you listening are entrepreneurs you’re start ups. You’re probably be ramping up production slowly but some of you may finish the design of your product and then you ban or roll in this high volume manufacturing right away so depending of what it is the answer is gonna be different. Number 3 is this your first generation product? Like this is the first time you manufacture this product or is this design set? Like you don’t anticipate changing it you got it. It’s done, it’s good, it’s gonna be the same in the next 10 years if it is you’re probably gonna be a lot more confident manufacturing in high volume so you could go with a manufacture that is overseas that does give you a lot lower price for this bigger volumes although if you’re gonna change the design a lot of times it is more convenient and it’s a lot easier to just have a manufacturing closer to where you are in that way you can quickly make changes and get that into production right away so I’ve got 2 more for you but let’s recap so number 1 the market you’re selling into. Number 2 annual volumes of units sold. 3 whether this is your first generation manufactured product or if it’s not are you not gonna keep this design for a long time or do you anticipate keeping the design for a long time so number 4 we got a speed of order fulfilment in other words how long are you looking having people wait from the time that they order to the time they receive your product so maybe if you are on a big delay like okay you order this and you get it 12 weeks later maybe that’s okay to have an overseas manufacture. It’s okay to have that be built and then be shipped and they get it after that or if it’s something where they order amazon prime style and they want it in 2 days you have to figure something else out or it leads me into my next and final point number 5 is you’re gonna have to have space to store inventory and this is always a good idea no matter where your main manufacturing because anything can happen it’s several things that you could never anticipate and you can get things like hurricanes, typhoons all kinds of weather in the ocean you can get a strike at the port to where your goods are right off shore but you have no access to them or something could be delayed at the manufacture and you could miss the ship leaving by an hour so you want to have more inventory on hand than you anticipate and when you choose a manufacture close by you can do the just in time system it’s a lot easier but not when their broad ohh that’s a big one again I kept it short today. So the next question is I’m finding that most manufactures I talked to it seems like they don’t want my business why is it so hard to find a medical device manufacture to work with? And I get this it is really tricky and it’s tricky for several reasons so most manufactures wants large accounts because for them to dedicate space to your mind they put some time and effort on automation set up costs and there is also how much space that you’re taking up in their facility so we’re all in business here we want to make good sound business decisions and one of their good sounds business decision is to maximize the space to maximize the margins that they’re getting in manufacture so for instance if you come in and you say hey I’ve got 200 thousand units annually that I want to manufacture and you’re getting a 2 dollar margin and someone else come in and says I got 2 million units per year that I want you to manufacture at 2 dollars margin they’re gonna choose the 2 million and that just how it is however if your volumes are small like you come in and say I’ve got 200 thousand to manufacture this year but you guys have a 12 dollar margin get that. That might be a different story so you just got to negotiate there and then also I know this personally because I have worked in business development for a long time you got this larger companies so take Metronic for instance they have a hundred of products and if someone in business development from the contract manufacturing company is talking to Metronic they know that if they got 1 product on board and they do a good job they can get another product and another one and another one after that so this larger comp has a lot more potential than just your start up and I know sometimes this stinks but that’s just how it is it takes the same amount of time usually to land a start up company as it does huge company so you wanna make of that then different contract manufacturing companies have different specialties too. So I one that specialize in system engineering so everything from the hardware the software the electronics that user interfaces they do all that. I know others that specialize just in plastics or when specialize in liquid handling systems anything having to do with liquids or fluids then you have the one that’s specialize in several different manufacturing methods like heat ceilings, laser wielding and compression molding and injection molding and have different materials like all different kinds of plastic presents or materials that are devices you got titanium you got extruded plastics so all kinds of stuff then it can either be on the particular or it could in a particular therapeutic area like orthopaedic or cardiovascular or they could specialize in catheter or diagnostic products so it just depends in their is a lot of them out there all around the country so I have relationships with a lot of different manufacturing companies and you don’t have to do all that work and sourcing your own you can just talk to me and leverage mind network. I literally build that up for you guys I got few more questions to go here now this is kinda funny it’s try you’re telling me not to think about finding a manufacture right away so when do I look for one and I know I did tell you that but here’s my logic behind that I tell people not to look for one right away because they need to focus on other things that come first and I kind to this kind of earlier so the thing that comes first there’s idea validation there’s building your business till it’s fundable there’s making sure it’s scalable you need to get the funding that you need to develop the product and yeah you do need to be thinking about manufacturing so you can design for manufacturing and you want to start thinking about the materials that the product will be built out off. How the processes are like what manufacturing process are you gonna use and then how are you gonna be able to grow with the product how’s that manufacturing process gonna change for right now when you’re trying to get 10 units out the door to 5 years from now when you’re trying to get a million units out the door. I advice clients to start going out manufacture so once they have the proof of concept and the idea is somewhat feasible like you’re pretty confident like 99% confidence here so here’s what that means when you have an idea you’re working on with someone or if you’re working with a product development firm on the design you get design concepts and maybe you get design ABC and D together you review those concepts you go over which one you like which you don’t like the pros and cons maybe. Maybe there’s functionality issues of one of them and you make a decision the best concept and move forward with that or maybe you take a little bit from here and a little bit from there and a little bit from this one and you just meld this together and make a new concept. Once you decide what you’re gonna go forward with that’s what you kinda work feasibility into it and yes actually feasibility should’ve been considered when developing this concepts but then you dive into a even more as you move forward with one concept so you’re doing this testing and as you go on you become more confident that hey this is starting to get real like I think this is gonna work out I think this is a good idea first having be something like some crazy not crazy I don’t like to use that word some very difficult idea. I heard some amazing ideas but it’s almost like very science fiction and like hey that’s great that you thought of that but how is that ever gonna work how are you ever gonna that to work in a way that it would be cost appropriate I guess that’s a big factor there too. Speaking of cost I get this question a lot too so how much do think this all is going to cost for manufacturing and oh my gosh that is one of the most difficult questions ever and that’s one of the most difficult thing that entrepreneur and start ups face anyway it’s forecasting cost. It’s really difficult because when the product are in the early stages of these concepts and hasn’t been develop and hasn’t been feasibility tested yet it’s pretty much impossible to tell and that’s the truth right there and the best way that you can move forward with this is to really rough estimate is to do some work on this yourself you have to put in work you can’t just talk with someone and have a price tag on this it doesn’t work that way. You got to work hard yourself first before you hire anyway and see you got to do some market research you got to some regulatory research, some IP research and put together those engineering product requirement then once you have this all organize then you can go talk to product development company just like those manufacturing companies I can help you identity one it’s a good fit for you to talk with and I will help you give pointers like hey they’re gonna ask you this, do you have this ready? Cause they don’t like to waste their time so once you hand them all this information you didn’t know they’re gonna give you a but if you want a more proper estimate then you can work with them but there’s gonna be some build hours in there and understand that because it takes research to figure out what research has to be done . My husband makes fun of me all the times well yes he does make fun of me all the times but for this particular thing I make fun of him too so it’s fair. So this particular thing he says you’re planning to plan and that’s true you know every Wednesday evening and every Friday evening I have out my journal and I’m mapping out okay this is been done for the week so far this is what I have left to get done between you know all day Thursday and all day Friday and Friday evening at the end of the day I’m back in my journal I’m like this is the progress that I’ve made and things that I want to get done. This is what I’m gonna work on next week so anyway yes you’re planning to plan that’s what these product development companies are going to do for you so just expect that for someone to give you their time especially if it’s gonna be a significant amount of time like you know if it’s gonna be somewhere between like 10 to 40 hours they need to get research topics for you you’re gonna get charged up so that’s just part of the process so I teased earlier with what this free training is and I kinda touch on it through this discussion a lot of this stuff before you get into manufacturing it all starts with works that you do yourself you really have to put into work early on and that’s what I do. I help you guys get there so if you don’t have funding yet for your idea I want you to check this out so you can check out the 3 ways to move your medical invention idea forward in 3 days you got that there. So it’s free training I got 3 videos for you so once you sign up you get the first video along with the guide to go through all of the 3 videos with you the next day you get the 2nd video and the day after that you get the 3rd video so it’s just gonna give you a good information to get started to get that ball rolling and get your idea closer to market so get your hands into the training by going to IMUA-SERVICES.COM/3ways that’s the number 3 so IMUA-SERVICES.COM/3WAYS so hope you check it out and thanks for tuning to this episode it was kinda fun to do something different. I like answering your questions so ask away please can send them to ALOHA@IMUA-SERVICES.COM and I look forward to doing another episode like this but I have to have some questions and again they can be on this topic they can be on other topic they can be anything medical device related anything business related about medical products and you know I was just thinking this a few weeks ago I did a podcast episode live on facebook live that would be really cool to do a facebook live podcast where you guys are asking me questions live and I answer them so let’s do it. I am gonna pick a date and I’ll let you guys know when’s that gonna be so we can make this interactive fun episode and if you’re not live on that’s okay it’s still on the podcast so until the next episode send me your questions and IMUA!

Mahalo for joining us. If you’re new to riding the waves of medical device product development, or if you’ve been in development for a while already, Inspired by Imua is here to surf with you. Want to be a master of the waves? Text hang ten that’s all one word HANGTEN to 44222. We’ll send you the most common wipe outs companies make in product development so you can avoid them and reach master wave status. Again, that’s HANGTEN to 44222. We publish a new episode every Tuesday, so catch us at Inspiredbyimua.com. Imua!

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