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Outsourcing Booms in Medical Manufacturing

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Rob Spiegel
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Re: Outsourced to Europe and North America
Rob Spiegel   6/26/2013 7:12:11 PM
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Yes, it is good news, Jim. I don't think cell phone manufacturing will come back anytime soon, but some stuff is staying and some stuff is coming back.

It seems to be a confluence of changes. China's labor is increasing -- helped in part by the Chinese government encouraging the formation of labor unions is factories building U.S. and European goods (but not for goods aimed at the Chinese market). Logistics hurts -- thus there's a trend to build near your market. U.S. executives are getting tired of staying up all night talking with their Chinese manufacturer. They'd rather do their telephone ranting in a U.S. time zone. Quality is an issue, as is intellectual property.

Ann R. Thryft
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Re: Outsourced to Europe and North America
Ann R. Thryft   6/27/2013 4:16:06 PM
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Thanks for the specifics, Rob. I was about to post that question.

Rob Spiegel
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Re: Medical yes, military no
Rob Spiegel   6/27/2013 11:26:52 PM
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With the shift to lead-free components, a couple industries -- medical and defense -- moved away from COTS (which are now lead-free) and started using components from smaller -- and more expensie -- runs of leaded parts. With many products needing to last 20 years or more, those industries were not ready to trust the new lead-free components.

Ann R. Thryft
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Re: Medical yes, military no
Ann R. Thryft   6/28/2013 12:03:23 PM
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I'm not sure which military hardware you're describing. The military was still using a lot of COTS stuff, at least for soldiers, five years ago when I covered that field. The lead-free issue had been a big deal but mil suppliers were making separate, lead-full mil product lines since mil products were exempted from the restrictions. Other mil suppliers that also sold to commercial customers ran two lines, one for each market, with the understanding that they'd try to move over to lead-free if/when the statute of limitations ran out on that exemption. It was also to give them time to deal with the performance issues of lead-free. But that was still all COTS, since COTS are necessary due to costs.

Rob Spiegel
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Re: Medical yes, military no
Rob Spiegel   7/2/2013 3:16:47 PM
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Ann, not sure we're using the same terms. Or maybe I'm mixed up. I thought that when suppliers started making a separate line of components with lead for the military, they were no longer considered COTS, since the commercial off the shelf components were now lead-free. Thus what used to be COTS was now something between mil spec and COTS. And didn't a lot of those suppliers simply quit making leaded versions of their components?

Ann R. Thryft
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Re: Medical yes, military no
Ann R. Thryft   7/3/2013 12:43:16 PM
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Rob, there does seem to be confusion on what happened and the terms involved. COTS generally refers to commercial OTS component hardware (defined by its functions, manufacturers, availability and pricing), and sometimes the board-level products made with them (in addition to open-platform software). It's not a very precise term, but it basically means "not custom" and "not proprietary," and usually "open platform." Of course, the extent of customization actually depends on what level of value-add has occurred at any given point and who's selling to whom along the supply chain.
To say that one of these boards, or even components, is no longer COTS because it's leaded vs lead-free, doesn't make much sense if it's still an Intel processor, for example. That terminology usage might be technically true but unnecessarily confusing and not useful. Only some types of components needed to retain lead solder for military performance reasons, and at this late date, I don't remember which ones. Some suppliers did, indeed, stop making leaded components. Again, all of my knowledge is about 5 years old.

vimalkumarp
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outsourcing in medical manufactuiring
vimalkumarp   7/11/2013 1:26:33 AM
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Most EMS companies have better manufacturing and in-house resources and domain knowledge for low to mid-volume and high-mix manufacturing in comparison to medical OEMs is a great point. Being a medical device design consultant from India, i have  workd with many medical device giants and i have seen this shift towards outsourcing in medical manufacturing.

Rob Spiegel
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Re: Medical yes, military no
Rob Spiegel   7/11/2013 10:29:20 AM
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This is new to me, Ann. Which shows holes in my knowledge. I was under the impression from distributors (my former area of coverage) that COTS stood for "commercial off the shelf." When the military used COTS, that meant they were not buying parts that were mil-spec. Since commercial off the shelf would cost less than mil-spec, there were savings to be had. 

When components that still had lead in them became effectively a specialized market, they were no longer "commercial off the shelf."

These terms will kill ya.

Rob Spiegel
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Re: outsourcing in medical manufactuiring
Rob Spiegel   7/11/2013 10:53:49 AM
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That makes a lot of sense, Vimalkumarp. It's also a good division in labor. Let the medical folks design the products their customers need and leave the manufacturing to manufacturing specialists.

vimalkumarp
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Re: outsourcing in medical manufactuiring
vimalkumarp   7/11/2013 11:36:56 AM
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i agree with your point that it is better that the medical folks design the products their customers need and leave the manufacturing to manufacturing specialists. It reduces time to market and also help them focus on the core areas.

 

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