Low Cost Countries for Manufacturing Medical Cable Assemblies
Manufacturing in Asian and Mexico may not
offer the expected cost advantages
Designing and manufacturing medical cable assemblies, connectors, and interfaces is done worldwide. With labor costs being less in Mexico and even less in Asia, it may be surprising that U.S. manufacturing of these products is increasing. The perceived cost advantages of manufacturing in Asia and Mexico of only a few years ago seem to be disappearing.
“In-sourcing” or “re-shoring” has gained a great deal of attention in the media lately. Both terms refer to the trend of bringing manufacturing that was outsourced to offshore locations back to the U.S.
A significant portion of Affinity’s growth in the past three years has come from U.S. based device makers bringing manufacturing of medical cable assemblies back to the U.S. from Asia.
Price vs. Total Cost
One reason for the return of manufacturing to the U.S. may be that the expected cost savings were not achieved. Pricing from offshore manufacturers may have been compared to pricing from U.S. manufacturers, without taking into account additional costs, some of which are not readily apparent. The price of the product may have been lower, but the total cost of the product may have been higher.
Inventory carrying costs are typically
higher with offshore suppliers
Supply Chain Costs and Issues
Anything that decreases the efficiency of the supply chain will add to the true cost of a product. Added costs due to supply chain inefficiency are often unknown or overlooked when initial pricing is negotiated.
To reduce costs, many Affinity customers have implemented programs to minimize their investment in inventory. For such programs to be successful, short lead times and reliable dock dates are required. With the “built-in” delay for goods to clear U.S. Customs, shipments from offshore manufacturers take longer than from a domestic producer. And, when sourcing from an Asian manufacturer, you are faced with either high air freight shipping costs or very long surface transit times.
As lead time to receive product increases, so does the need to maintain safety stock or buffer inventory. Additionally, if there is any uncertainty over an offshore supplier’s ability to meet delivery commitments, an even higher inventory level may be required. The cost to hold excess inventory can quickly reduce, or even eliminate, any price advantage of manufacturing offshore.
The Value of Flexibility
It is reasonable to assume that shorter overall lead times offer the advantage of greater supply chain flexibility. Flexibility can be a benefit when:
- Orders need to be increased
- Orders need to be decreased or cancelled
- A product change needs to be implemented
- A “pull system” is desired or advantageous
It may be difficult to assign a dollar amount to the value of flexibility in a supply chain, but it should be obvious that increased flexibility may offer a reduction in total cost.
Quality System and On-site Audits
Valid ISO certification by a recognized body –
an important consideration in supplier selection
An important consideration when choosing a manufacturing partner is their quality system and certifications. A supplier with ISO certification from a recognized body will be expected to meet minimum common standards. However, without conducting an on-site audit, the effectiveness of the quality system cannot be fully quantified.
The ability to conveniently conduct initial and follow-up audits may be an important consideration in supplier selection. An on-site audit is typically easier and more efficient if the supplier to be audited is located in the same country. Auditing an offshore supplier is typically more costly and takes more time. The effectiveness of an audit may be reduced due to language differences in both verbal communication and documentation.
In-depth knowledge of standards
may be an important consideration
in choosing a manufacturing partner
Standards and Regulatory Experience Knowledge
A prospective supplier may offer additional value if they have experience with, and knowledge of recognized standards such as ANSI, AAMI and IEC. Similarly, experience with regulatory issues associated with the U.S. Food and Drug Administration may be of benefit especially in the design and development stage of a project. Affinity offers our OEM partners the advantage of being a FDA registered medical device manufacturer as well as having experience obtaining a 510k for cable assemblies. We understand the challenges of meeting regulatory requirements.
Affinity’s Director of Engineering, Bob Frank, was a member of the committee that established ANSI/AAMI EC53, the only standard that specifically applies to medical cables. His intimate knowledge of the standard and how it is applied to medical cables has proven valuable to many device manufacturers.
Reducing labor content and
operator dependency begins at
the design stage of a project
Design for Manufacturing – Reducing Labor Content
Planning for how and where the product being designed will be manufactured should be part of the design process. Because hourly labor rates in the U.S. may be higher than Asia or Mexico, successful domestic manufacturers often “design the labor out” of the product. Not only does reducing the labor content help reduce cost, but it also increases throughput and can lead to higher quality. Reduced labor content and improved throughput help Affinity compete successfully on a worldwide basis.
A supplier that can offer assistance with DVT
Design Validation Testing
When choosing between a domestic or international manufacturer, the value of the supplier’s additional capabilities can also be important. A supplier that can author and execute a validation protocol may save a device manufacturer time and money. Few offshore medical cable or connector manufactures have the resources and knowledge to assume verification and validation responsibilities.
Understanding Product Usage
Understanding how medical cables are actually used allows a manufacturer to provide additional value. By understanding and anticipating potential user problems risk can be reduced which often results in lower product cost. Each member of the Affinity management team has several decades’ experience with medical cable assemblies. When that knowledge is applied in the design process, the result is often a unique and cost effective cable assembly.
Control of Intellectual Property
New product development projects are typically highly confidential and disclosure of details or even the nature of the product could be detrimental to the device manufacturer. Many within the industry have expressed concerns that safeguarding intellectual property may not be viewed with the same degree of importance by offshore suppliers as it is with domestic manufacturers.
“Working with over 100 different device manufacturers, the Affinity team takes confidentiality very seriously. Our business depends upon safeguarding our OEM partner’s trade secrets,” said Affinity President and CEO Mary Phillipp. “We often have the opportunity to be involved with exciting new products and concepts and we absolutely keep this information confidential.”
Communicating across a dozen time zones
can make collaboration more difficult
The “Time Zone Issue”
Collaborating on the design and specifications for a medical cable assembly or custom connector requires regular two-way communication. Communicating with technical resources in Asia may be problematic because of the nine to twelve hour time difference as compare to the U.S. While Asian manufacturers may try to minimize the impact of the time difference, communication is often more difficult to schedule at convenient times.
Supply Partner – Not Competitor
Another important consideration for some device manufacturers is whether or not a prospective supplier competes for their accessory business. Some manufacturers produce cable assemblies for OEMs, but also sell the same or similar products to end-users or distributors. Affinity does not compete with our OEM customers. We manufacture custom cable assemblies for our OEM partners and do not sell these to end users or distributors.
New Affinity plant houses
manufacturing in Costa Mesa, California
Cost Effective U.S. Manufacturer
Affinity Medical Technologies is proud to be able to manufacture cost effectively in the U.S. Our success reinforces the belief that we made the right decision by strengthening our design and manufacturing capabilities domestically, rather than developing those capabilities offshore.
“Thanks to our customers, Affinity’s business has been strong. We’ve been hiring for the past three years,” said Manufacturing Manager, Kevin Kom. “We feel very fortunate to be able to offer good jobs to good people. Moving into our new facility just over a year ago has allowed us to continue to grow and expand our manufacturing operation.”
Affinity Asian Partner
For some high volume products with high labor content and locally available raw materials and components, manufacturing in Asia may make sense. Because a handful of our products fit these parameters, Affinity has an Asian manufacturing partner. Each of our products manufactured in Asia was first developed, validated and put into production in the U.S. Only after we have successfully manufactured the product domestically have we considered transferring manufacturing to our offshore partner. When it has made sense to have a product produced in Asia, we have been successful in maintaining the same level of quality, lead times and supply chain logistics for our OEM partners.
Balancing Quality, Lead Times and Price
“One of the reasons our business is strong is that many of our new customers have decided to source domestically after experiencing problems sourcing offshore,” said Affinity Business Development Manager, Hank Mancini. “There is a saying in the industry that seems to be proving true. Offshore manufacturers can offer a good price, high quality or fast delivery – pick one. At Affinity, we do our best to offer our OEM partners all three and it seems to be paying off. We continue to be awarded new projects that had previously been manufactured offshore.”
When deciding whether to develop your interconnect project domestically or offshore, it will benefit you to consider all of the advantages and disadvantages of both strategies. If your offshore supplier is not providing the expected cost savings, or if you are experiencing service or quality issues, the Affinity team is ready and willing to help. Contact us at +1 949-477-9495 or at firstname.lastname@example.org.
The newest member of the Affinity Materials and Planning Group is Yesenia Garabay. Yesenia, who goes by Yessy, – pronounced Jessie - started her career with Affinity about a year ago working as a first as a Quality Inspector on second shift and then moving into receiving inspection.
“I was looking for a full-time job and a neighbor who works for Affinity said the company was hiring,” said Yessy. “I interviewed with Maria (Alcaraz, Quality Supervisor) and was hired as an inspector on second shift. It wasn’t long before Maria asked me to move to receiving inspection.”
Seeing a posting for an open position in purchasing, Yessy submitted her resume to Sue Alessi, Affinity’s Material Supervisor and was accepted for the position three months ago.
Yessy joined the Affinity purchasing
group in December 2011
Asked about her first three months as a junior buyer, Yessy said, “There is a lot to learn. Every day is different and we operate at a very fast pace. I enjoy pushing myself and I really enjoy the challenges of purchasing.”
Before joining Affinity, Yessy worked for a temp agency on several long-term assignments including one at local medical device manufacturer, B. Braun. She brings over five years experience in customer service, general office and purchasing to Affinity. Yessy holds a certificate in counseling and will be returning to Orange Coast College this summer to finish her degree Associates Degree.
Yesenia lives in nearby Santa Ana with her mom, dad, two brothers and her dog Peggy.
In her spare time, Yessy enjoys spending time with her boyfriend. She enjoys outdoor activities, Soccer, Zombies and Karaoke! She also said “I have a thing for earrings.” For vacations, Yessy likes to visit family in Baja California.
Where high tensile strength and a high degree of flexibility are required for medical leads, tinsel wire is often recommended.
Seven tinsel conductors wrapped
spirally around strength member
Micro photo of tinsel wire showing
flattened conductors wrapped around
a strong fabric core
Tinsel wire is made by flattening the conductor material into a ribbon and then spirally wrapping one or more conductors around a strong fabric core. Tinsel conductors are typically copper and are often plated with tin or silver. This type of wire construction offers excellent flexibility due to the ribbon conductors and excellent tensile strength due to the strong fabric core.
One of the core competencies at Affinity is terminating tinsel conductors. We employ proprietary methods to assure an optimal electrical connection while maintaining a high strength termination.
Tinsel wire is more costly than ordinary stranded copper wire because the materials are more expensive and the manufacturing process is more complex. However in applications where both high flex life and tensile strength is required, tinsel wire or cable made up of tinsel conductors may be the optimal design choice.
March, June and November – March starts on the same day of the week as November every year and ends on the same day of the week as June each year!
Hanami – Hanami is the Japanese term for flower viewing and usually begins around March 31st, which is also the end of the Japanese school year. Cherry blossoms, or Sakura, bloom throughout Japan from late March to early May. Hanami celebrations take place throughout Japan and public parks are filled with visitors enjoying spring weather.
Daffodil – Daffodil is the common English name for the Narcissus, a hardy, spring-flowering plant in the Amaryllis family which is also known as the “birth flower” of March. In spite of their beauty, lycorine, an alkaloid poison, makes Daffodils toxic.
Pakistan Day – Two events are celebrated in Pakistan on March 23rd. Pakistan Day, also known as Republic Day, commemorates both the 1940 Lahore Resolution and adoption of the first constitution of Pakistan in 1956.
Prince Kuhio Day – Prince Kuhio Day is one of only two U.S. holidays honoring royalty (the other one being King Kamehameha Day). Celebrated in Hawaii, the holiday commemorates the birth of Jonah Kuhio Kalaniana’ole. Prince Kuhio was a delegate to the United States Congress and authored the first bill for Hawaiian statehood in 1919.