Voices from OMTEC 2013

Orthopaedic device manufacturers, suppliers and industry experts met in Chicago at OMTEC® 2013, the 9th Annual Orthopaedic Manufacturing & Technology Exhibition and Conference, to discuss how to mitigate regulatory, manufacturing and supply chain challenges. Here are a few of the conversations you may have missed.

In the Panels:

A panel discussion on procurement and sourcing touched on how OEMs are handling supplier consolidation, outsourcing and new regulations. Steve Maguire, General Manager, Orchid Design, moderated the conversation. Here’s what they said about lead times.

Bob WestonBob Weston, Director of Strategic Business Planning, Ortho Development: We’re seeing extended lead times, even from our tried and true suppliers. We think that the larger OEMs are undergoing a lot of product launches that are impacting lead times in the industry. There used to be a cycle; I’d tell our engineers, “We want to have the supplier building the parts in August when the larger companies decide to decrease their forecast.” Right now, there’s some disappointment on our side on missed dates. What we’d like to see is some flex time at the supplier level to give us that wiggle room that we need moving forward.

Solowczuk 250Thomas Solowczuk, Director, Global Sourcing, Alphatec Spine: We’re increasingly creating strategic supply agreements with our suppliers, putting VMI programs in place, allowing the supplier to build ahead. We’ve been able to adapt to some of the changes in lead time and demand. A supplier can respond much faster if we’re able to give them six or nine months of requirements. If they’re able to bank some of that inventory for us, it can cut lead times down from 8-10 to 1-2 weeks, potentially.

hlevyHoward Levy, Chief Procurement Officer, Worldwide Operations, Biomet: I think it depends on the business that you’re actually supplying. One of our trauma suppliers told me any new order we place is a 20-week lead time. Some of my instrument suppliers are showing me a map, or are forward-planning our business and suddenly there is a cliff of no return that they’ve experienced, regarding volume. It depends on your OEMs, who you’re supplying to, what particular products you have; are you part of a new launch, or do you have stable business? It’s an interesting dynamic; one that’s different from what I’ve seen before.

In the Sessions:

Orthopaedics leads the medical device industry in number of recalls, with 578 total recalls identified between 2007 and 2011. Matthew Krueger, Chief, Orthopedic and Physical Medicine Devices Branch, Office of Compliance, Center for Devices and Radiological Health at FDA, presented data compiled by the agency.

FDA sorted the data into four categories (mislabeled, specification, sterilization, fracture), which were created based on prevalence and areas in which it foresees being able to address concerns. The percentage of each recall issued from 2007- 2011 includes: mislabeled, 24%; specification, 19%; sterilization, 7%; fracture, 9%; other, 41%. (Download the presentation here.)

With the final ruling on UDI expected for release this summer, orthopaedic manufacturers are beginning to focus on compliance. Karen Conway, executive director of industry relations for GHX, told manufacturers they need to view the regulations as a strategy and not just a project. Conway provided the following questions for audience members to ask as they prepare for UDI: (Download the presentation here.)

  • Where are covered products produced? Into which markets are they sold?
  • Do you need to add printing capabilities to accommodate dynamic (production) data? If so, how will that impact space and layout on the production floor?
  • Do you perform late-stage labeling in warehouses or with third party logistics providers? How will their operations be affected?
  • How will you handle validation of new IT equipment and processes?
  • Do you have kits or combo products? If so, you do label each of them late-stage and then combine?

On the Floor:

OMTEC speaker Rob Packard walked the hall with notebook in hand, jotting down questions he received from attendees. Here are three. (Download Mr. Packard’s presentations here.)

Question: Where will FDA be in five years?

Packard lightenedMr. Packard’s Answer: I don’t expect to see the 510(k) process go away, but FDA has good reasons for disliking it. Therefore, FDA will continue to rigorously screen and reject as many applications on technicalities as they can. Second, FDA will continue to promote the De Novo process, because it allows them to establish a new special controls document for verification and validation testing that will be required—instead of accepting what was accepted for past submissions. FDA will also increasingly require clinical trials for 510(k) devices. The trend has grown gradually, and 10% to 15% of submissions now include clinical trial data. I’d like to see a 100% web-based solution to submissions, but I don’t believe FDA can change that fast. Ten years might not even be enough.

Question: If the same part is made on two different machines, and we have only validated the first machine, do we need to revalidate when we move it to the second machine?

Answer: There are three types of equipment validations: Installation Qualification (IQ), Operational Qualification (OQ) and Performance Qualification (PQ). If you want to learn more about process validation, I recommend the following GHTF free guidance document: SG3/N99-10:2004 (http://bit.ly/StudyGroup3). The IQ is required for all of the equipment—even when you move it five feet. This is the quickest and least expensive of the validations. It typically involves connecting utilities and calibration. The OQ is the most important for process consistency. An OQ defines the outer limits for each of the process variables that you might adjust. A well-designed OQ will push the boundaries and actually make some defective product. The actual process specifications are then established inside of those boundaries. Finally, the PQ is typically a formality, because this is done at nominal conditions and repeated. Typically companies will use the first several production lots as the PQ material and the lots will be statistically sampled. There is no reason to repeat the OQ when you switch to an identical machine, and switching to a similar machine should allow you to abbreviate your OQ that you already did. Companies will also usually reduce from the typical three-lot sample to a single-lot sample for the PQ on a second machine, but this decision should be based upon historical process capability for the first machine.

Question: Is there a way to analyze the cost of doing things and weigh the benefits of cost avoidance against the costs of compliance?

Answer: This question is pointing to the concept of the Cost of Quality. If you search for this phrase, you will quickly find what is referred to as the iceberg model. The direct costs of scrap for nonconforming product are the small costs above the waterline for an iceberg, but two-thirds of the mass of an iceberg is below the waterline (i.e. hidden costs). Therefore, when you really start measuring all the hidden costs, you see that the indirect costs you are avoiding are far greater than the cost of compliance. In the worst case scenario, a single recall has put companies out of business. I don’t know if there is any published average cost for a medical device recall, but I’m sure it’s more than $250,000, and I think it’s less than $2 million. The problem is that the hidden cost of your FDA inspection frequency increasing and the hidden cost of the impact to your company’s reputation can be very large. In general, I always try to emphasize the need to implement more preventive actions than corrective actions. If you wait until something goes wrong, then you are reacting to problems, and fixing those problems is costing you more than it needs to.

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