Accelerated design, advanced manufacturing technologies are key to meeting the challenges of the fast-changing market.

As we enter 2017, the medical device market must adapt to constant changes in the medical landscape to continue its consistent growth. The demand for more advanced, more personalized treatment; increased availability of healthcare; and an aging population are pushing the market and expanding technologies. These advancements require accelerated design and production to get products to market quickly, efficiently, and cost-effectively.

Along with strong growth projections, the rapid pace of advancements continues to alter the look of the industry. Analysts see further convergence of design and manufacture, driving the growth of medical device contract manufacturing/outsourcing; continuing new entrants into the market as technologies further integrate into devices; and in the United States, a wild card may come into play as policies are unveiled from a new administration.

Indicators show that the global market for medical device outsourcing should grow at a compound annual growth rate (CAGR) of 11.60%, reaching $40.8 billion by 2018. Competition among medical device manufacturers drives this growth as companies seek to increase profit margins. However, an uptick in medical device recalls has boosted the demand for testing and validation.

Within the medical device manufacturing industry, orthopedic devices lead outsourcing to contract manufacturers with cardiology coming in a close second. Furthering market growth and guiding the entry of players from different industries into the medical market is the need to integrate supportive technologies such as telecommunications, digital imaging and diagnostics, and robotics. By application, Class II devices hold the largest market share due to the moderate associated risks and limited regulatory requirements.



With contract manufacturing playing an increasingly larger role in medical device development, the market can be viewed in two segments – application and services. Application refers to Class I, II, and III medical devices, while services include product design and development, regulatory consulting, product testing, product implementation, upgrade, and maintenance. Of those, product design holds the largest market segment of outsourced services.

As the market grows, continual investment in advanced manufacturing technologies is required to connect shop floors to the top floor, driving increased quality and output (See pg. 19). Organizations need to remain nimble enough to respond quickly to new and changing FDA regulations – such as cybersecurity as more devices connect – all while producing products that continue to increase in complexity.

On the following pages, industry experts from SAP and MasterControl weigh in with their thoughts on where the industry is headed and what manufacturers should consider if they plan to remain competitive in the market.

About the author: Elizabeth Engler Modic is editor of  Today’s Medical Developments and can be reached at emodic@gie.net or 216.393.0264.

Joe Miles (JM): Long gone are the days of traditional planning systems and demand forecasting. Demand-driven manufacturing has become the new market norm because of advancements in real-time analytics and Industrial Internet of Things (IIoT).

Every manufacturing company needs to have visibility throughout its operations, especially if it wants to establish a culture where the top floor has access to the shop floor. This transparency allows for common understanding of the operational health of the company and is the foundation that allows companies to react fast to events triggered by customers, quality, procurement, or supply chain. Supply chain managers should always look for ways to reduce lead times and balance production with the ebbs and flows of demand.

Start with an internal audit of end-to-end operations to identify weak spots and insertion points where new features can be introduced. Once non-value-added components are removed, invest in technology (e.g. Big Data analytics and IIoT) that improves demand cycle monitoring and coordinates the transfer of information at every step of the production process to better monitor demand cycles. The result is a supplier network that aligns output with demand, eliminating waste and driving market growth.

JM: As new analytic technology becomes available, the industry will continue to shift away from forecast models that leave room for mistakes and create waste. Manufacturing companies will need to integrate real-time demand information into their operation or risk losing market share to the digital leaders that do.

Market leaders will be those companies that invest in technology allowing greater end-to-end collaboration, information sharing, and optimized production that matches on-receipt demand.

JM: Our customers expect great flexibility in the global economy, especially when it comes to IIoT and Big Data. At SAP we have tools for customers that can start small or big, work with a mix of suppliers, or adopt the SAP tool sets. These tool sets reach from our platform (HANA or HANA Cloud Platform) to collect information from sensors or machines, process information, and integrate into the backend ERP systems.

Our analytics portfolio can then provide insights into the data, offering a series of solutions that improve operational efficiency, increase process visibility and performance, and scale production to meet the needs of demand-driven manufacturing at every step of the supply chain.

JM: We provide the tools to visualize the operational performance, collect mass information throughout the IIoT layer, and establish a business layer so we can analyze and provide actionable insights to the users for an optimized value stream.

IIoT is the key to connecting these two floors. The power of connected devices and processes allows business to better respond to the changing nature of consumer demand or supply chain.

JM: Collaborative R&D: While patients see the surface-level functionality of the medical devices they encounter, there is extensive planning and research that goes into the development of these tools, a good portion of which comes from business-to-business collaboration. However, this coordination can be difficult without the right systems in place to organize clinical trial and device monitoring, especially if partnering companies use different measurement tools.

Supply networks: Healthcare needs are constantly shifting because of changes in disease prevalence and environmental and socioeconomic factors. As a result of climbing healthcare costs, medical device manufacturing is rapidly shifting toward a demand-driven model. However, proactive decision-making can be difficult (or ineffective) if you are unable to fully assess these global changes.

Sourcing/procurement: Businesses must have measures in place that help monitor and control the costs from working with a network of suppliers. The healthcare industry is costly at every stage of the supplier-to-patient chain, so to remain competitive and profitable, it’s important that stringent savings targets are in place together with an effective mechanism to hit them.

Compliant manufacturing: Healthcare and regulation are two sides of the same coin. At every step of the supply chain, medical device manufacturers must adhere to strict (often difficult and complex) legal codes. To make matters even more complicated, all the players in the supply chain could be in different geographic regions, potentially each with its own protocols.

SAP has designed industry-specific solutions meant to ease compliance understanding while navigating the technical, legal, and corporate regulatory hoops involved in medical device manufacturing. SAP Manufacturing Executions and Extended Warehouse Management improve operational efficiency and provide real-time visibility at each stage of the development process to ensure that guidelines are met.

JM: Healthcare regulations have become more stringent and we don’t see this trend changing anytime soon. Medical device manufacturers must take a proactive approach to compliance, making sure that their production and standards meet government standards.

Aside from the shifting regulatory environment, rising costs have pushed many healthcare providers to consider consolidation. Mergers and acquisitions will place added competitive pressure on mid- to low-scale medical device manufacturers. Competing with larger providers will require manufacturers to operate smarter, scaling their operations to accurately match demand and uncover additional markets.

Lastly, intense competition and strict regulations will make innovation and R&D even more crucial to business survival. As new technologies become available (such as 3D printing and advanced analytics), manufacturers will need to develop new designs and processes that leverage these breakthroughs if they hope to remain competitive in a field that will increasingly become dominated by fewer, albeit larger, players. In addition, the largest medical device manufacturers will look to startup investments and acquisitions as a way of fostering innovation that falls outside of standard regulations.

About the author: Elizabeth Engler Modic is editor of Today’s Medical Developments and can be reached at emodic@gie.net or 216.393.0264.

Following Apple and Google, some have predicted that e-tail giant Amazon would be the next Fortune 500 company to disrupt the healthcare market, but could it be FedEx instead? The company was a host sponsor of AdvaMed 2016, the leading medtech conference in North America, causing speculation that the shipping giant is expecting healthcare logistics – estimated to be a $70 billion global market – to become a major revenue stream.

DHL and UPS are also attracted to the healthcare logistics sector, and all three companies have invested in their healthcare supply chains. FedEx’s SenseAware technology monitors shipments and tracks everything from temperature and light exposure to barometric pressure. DHL has a similar shipment monitoring system, SmartSensor, and collaborates with two pharma giants. UPS’ extensive New Jersey facility is dedicated to shipping and logistics of high-end medical devices, such as a 300-piece spine surgery kit which it ships to hospitals on a loaner basis. Components not implanted in patients are shipped back to New Jersey where the kits are replenished and reshipped to other hospitals within 36 hours. Reusing portions of the kits saves the manufacturer Alphatec Spine money by not having to make as many kits. 1

With the surprising victory of Donald Trump and the Republicans’ sweep of the House and Senate, never has one party held such power over the health benefits of so many American citizens. Trump campaigned on repealing and replacing the Affordable Care Act (ACA, also known as Obamacare) which will impact device makers. Business Insider predicts that the medical device industry is likely to be one of the first industries to benefit from the new administration.

The ACA’s controversial medical device tax on non-retail medical devices, such as pacemakers, heart valves, and artificial hips, is expected to go. 2

The tax has been on temporary suspension since December 2015. Although it is not expected to be reinstated anytime soon, industry groups like AdvaMed are pushing for a full repeal in early 2017, rather than later in the year. If this happens, it will be a huge boon to device manufacturers.

The new administration will not just impact healthcare policy, but the policy makers themselves, and the FDA seems to be one organization that is firmly fixed on Trump’s radar. In his First 100 Days Action Plan, he indicates that one of his initial reforms will include “cutting the red tape at the FDA…to speed the approval of life-saving medications.”

Some would argue that the FDA has already started down this path with its approval of eteplirsen, a drug recently approved to treat Duchenne muscular dystrophy (DMD). The approval was highly controversial because the efficacy of the drug was in question, and the agency is responsible for protecting the public from unsafe and/or ineffective drugs and devices.

In 2015, the FDA introduced an Expedited Access Program that allows manufacturers of devices designed to treat life-threatening or irreversibly debilitating conditions, which are usually subjected to the rigorous 510k premarket approval process or the de novo clearance program, to request for fast-tracking at the agency to jumpstart the approval process. 3

As of this writing, the media is reporting that Trump may name libertarian Jim O’Neill as the new FDA commissioner. If tabbed to lead the FDA, he would replace the current commissioner, Dr. Robert Califf, who was appointed in February 2016.

O’Neill, who is neither a physician nor a scientist, supports eliminating the agency’s mandate to establish the efficacy of new medicines and devices before approving them for sale, a view that could radically overhaul the agency. Moreover, what would become of FDA’s Center for Devices and Radiological Health (CDRH) and its three strategic priorities for this year and next year: the establishment of the National Evaluation System for health Technology (NEST), to partner with patients, and to promote a culture of quality and organizational excellence?

Cost control will continue to drive innovation in the industry, and the consumerization of medical devices shows no signs of slowing down. In response to cost reduction and customer needs/desires, the medical device business model is evolving from product maker to problem solver.

Device and diagnostics manufacturers must adopt a design-for-value orientation, which will require more collaboration between design engineers, manufacturing, and sales/marketing. A stronger alliance between these functions will ensure that customers get the device they need, when they need it, with minimal supply chain waste and maximum innovation.

About the author: Medical device expert and executive vice president Matt Lowe has successfully launched more than a dozen medical devices, has five patents issued, and his regulatory experience includes writing a 510(k) that was cleared by FDA and managing a multi-site, multi-year post-market clinical study for orthopedic devices. Lowe can be reached at 801.942.4000 or mlowe@mastercontrol.com.

Rotation Medical Inc. has completed a $12 million Series B extension financing. Existing investors – New Enterprise Associates (NEA), Life Sciences Partners (LSP), and Pappas Ventures – participated in the financing: $8 million initially and $4 million in 2017. The company intends to use the proceeds for U.S. commercialization of the Rotation Medical rotator cuff system – a proprietary bioinductive implant and disposable instruments that allow easy and quick arthroscopic procedures.

“Since launching our Rotation Medical rotator cuff system in fall 2014, we’ve experienced rapid growth and very positive momentum,” says Martha Shadan, president and CEO of Rotation Medical. “This additional investment in our company will allow us to expand our U.S. presence and continue to support the tremendous physician adoption we have experienced thus far.” www.rotationmedical.com

The Medical Technology Business Group of Zeiss announces the U.S. introduction of the VisuMax Small Incision Lenticule Extraction (SMILE) procedure, the latest in refractive surgery for the correction of myopia.

The flapless SMILE procedure requires only one laser to perform the entire treatment. The outer corneal layer remains largely intact, contributing to the eye’s biomechanical and refractive stability and fast visual recovery. Zeiss is also conducting an investigational device exemption (IDE) trial in the U.S. on astigmatic myopia to broaden the spectrum of SMILE for more patients. www.zeiss.com/med

The 2nd generation Ultrasonic 20 linear offers high material removal rates, accurate edge machining, and reduced process forces in machining advanced materials.

The 2nd generation Ultrasonic 20 linear offers high material removal rates, accurate edge machining, and reduced process forces in machining advanced materials. With a 37.7ft2 footprint, optimizations include optional 60,000rpm spindle speed, up to 47% more powerful drive motors on the A-axis, a 33 lb load weight, and up to 2.0" tool diameters.

Other features include a digitally-controlled ultrasonic generator and ultrasonic actuators with enhanced performance. Toolholders with adapted actuator technology are changed into the milling spindle automatically. Each holder contains piezo elements activated by a program-controlled inductive system with a frequency of 20kHz to 50kHz.

Tool rotation is superimposed with an additional longitudinal tool movement – creating a defined amplitude ranging to 10µm on the cutting edge of the tool or on the grinding layer. The amplitude can be programmed in the NC controls.

Oscillating contact interruption results in improved lubrication of the cutting edge and increased removal of particles from the active zone. This enables longer tool life and surface qualities ranging to Ra

GF Machining Solutions helps a supplier increase quality and parts volume while reducing equipment footprint requirements.

Contract manufacturers, job shops, and original equipment manufacturers (OEMs) in the medical device industry require improvements to productivity processes to stay competitive. And, medical part manufacturing poses a variety of challenges, as high-precision parts incorporate a range of full 5-axis moves.

For example, highly precise complex parts used to fix bones are rarely composed of straight or square shapes, instead involving contours for functionality and aesthetics. Implants benefiting from advanced machine technology include bone plates and screws, femoral heads and acetabular cups for hip replacements, and parts for knee and spine implants. Components can range from just less than 1" to more than 10" long and are typically machined from high-performance titanium and stainless steels alloys, as well as medical plastics such as PEEK.

Growth from a surge in customers, along with a more diversified customer base, increases the pressure to raise output while controlling manufacturing costs. More often than not, the answer comes from advanced, all-in-one, productivity-enhancing machining systems that provide integrated productivity-boosting packages with high-speed spindles, multiple-pallet automation, full 5-axis positioning, and user-friendly controls.

For one medical shop, advanced machining systems were critical to increasing productivity. The shop machined implants with 5-axis machining centers with 15,000rpm to 20,000rpm spindles, trunnion table 5-axis capability, and two-pallet automation. However, a surge of incoming work and a desire to optimize existing jobs forced the shop to consider machining platforms with higher rpm spindles, smaller footprints, and more pallets. Mikron HSM 400U LP machining centers from Lincolnshire, Illinois-based GF Machining Solutions provided solutions.

The shop now has three Mikron HSM 400U LP machines with 42,000rpm HSK-E40 spindles, tilt-table trunnion 5-axis capabilities, 220° of B-axis rotation, Heidenhain iTNC 530 controllers, and rotary automation systems with 18 workholding pallets. The machines occupy two-thirds of the floor space, weigh less, and have larger work envelopes than the previous machines.

Vector spindles on the machines deliver consistent surface finishes and part details, while reducing machining time for semi-finishing and finishing. With high dynamics and 1.7g acceleration, the machines reduce non-cut time and maximize spindle utilization. Liquid-cooled, linear direct-drive motor technology allows short setting times and high dynamic rigidity of the attitude control. The linear direct drive with central oil lubrication reduces friction-induced wear and ensures long-term precision.

To orient complex, contoured parts such as bone plates for drilling, threading, and surfacing, medical shops often use 3+2, 5-axis positioning techniques. The Mikron axes rotate up to 200rpm, reducing positioning time when compared with trunnion-table 5-axis machines.

Fast workpiece positioning is critical for medical parts that have 20 to 30 threaded holes. When each hole requires machining a flat, a counterbore, a through-hole, and a thread, small amounts of extra speed in B-axis rotation results in long-term cycle time reductions. With higher spindle speeds and faster 5-axis part positioning, the Mikron mills reduce cycle times 20% to 30%.

To optimize application of the Mikron machines’ pallet systems, some medical shops fit pallets with a tombstone that can hold multiple similar parts, enabling consistent tool packages and eliminating the need to change fixtures. This approach ensures lights-out operation between shifts without loading, unloading, or removing fixtures.

With the machines’ Heidenhain controls, operators can perform edits at the machine in the conversational mode saving programming time and minimizing delays.

Cost savings through automation are also changing the way medical contract manufacturers look at machine tool purchases. Machine tools with pallet changing or bar feeding capability can provide maximum versatility and productivity. Such integrated automation allows manufacturers to be competitive and get the most out of their equipment and skilled workforce.

A concurrent benefit is flexibility. For the medical shop with the Mikron HSM 400U LPs, typical job lot sizes range from 10-to-300 pieces, yet it often receives five-piece orders as well. The machines make setups for these jobs fast and accurate, while their pallet changers boost efficiency for the shop’s legacy products.

The shop proves out and validates small batches of prototype parts, then when repeat orders come in, program and fixturing are ready to begin production.

With tolerances around 0.0005" and surface finishes such that post-machining, finishing operations on medical parts must be limited to only deburring of complicated double- or triple-lead threads. Part precision and quality are crucial in machining processes. In addition, this minimizes the need for hand finishing, significantly reducing the possibility that a part will be scrapped due to inconsistent manual processing.

High-speed machining techniques contribute to manufacturing quality, efficiency, and cost control, allowing medical contract manufacturers, such as the one using the Mikron HSM 400U LPs, to replace custom tools with lower-cost, off-the-shelf tools. Rather than roughing a part, creating a contour with a form tool, and then finishing with other tools, the shop applies one roughing tool and one finishing tool to complete a part.

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Medical parts contract manufacturing demands a level of responsibility beyond that of general machining. Start-to-finish control is crucial because medical parts must be perfect. Medical contract manufacturers purchase certified raw material and bring the parts to their final dimensions, completing first piece, in-process, and final inspections, certifying that a part is ready for human use. Customers rely on the manufacturers’ process control and team to provide consistent products. Investment in the right machining technology helps medical contract manufacturers deliver quality products on time.

With an anticipated industry compound annual growth rate (CAGR) of 5.2%, research company Evaluate highlights medical predictions through 2022.

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