{"id":7849,"date":"2024-01-11T03:48:08","date_gmt":"2024-01-11T03:48:08","guid":{"rendered":"https:\/\/www.orielstat.com\/blog\/?p=7849"},"modified":"2024-01-12T20:20:36","modified_gmt":"2024-01-12T20:20:36","slug":"moving-medical-manufacturing-to-another-country","status":"publish","type":"post","link":"https:\/\/www.orielstat.com\/blog\/moving-medical-manufacturing-to-another-country\/","title":{"rendered":"Regulatory Implications of \u201cReshoring\u201d or Relocating Your Medical Device Manufacturing Facility"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"7849\" class=\"elementor elementor-7849\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-7388bb3 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"7388bb3\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-4264d41\" data-id=\"4264d41\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-d04a716 blog-details-page elementor-section-full_width elementor-section-height-default elementor-section-height-default\" data-id=\"d04a716\" data-element_type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-66 elementor-top-column elementor-element elementor-element-e193c4d\" data-id=\"e193c4d\" data-element_type=\"column\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-aa22ff3 elementor-widget elementor-widget-post-info\" data-id=\"aa22ff3\" data-element_type=\"widget\" data-widget_type=\"post-info.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<link rel=\"stylesheet\" href=\"https:\/\/www.orielstat.com\/blog\/wp-content\/uploads\/elementor\/css\/custom-widget-icon-list.min.css?ver=0\"><link rel=\"stylesheet\" href=\"https:\/\/www.orielstat.com\/blog\/wp-content\/plugins\/elementor-pro\/assets\/css\/widget-theme-elements.min.css\">\t\t<ul class=\"elementor-inline-items elementor-icon-list-items elementor-post-info\">\n\t\t\t\t\t\t\t\t<li class=\"elementor-icon-list-item elementor-repeater-item-7f6be35 elementor-inline-item\" itemprop=\"datePublished\">\n\t\t\t\t\t\t<a href=\"https:\/\/www.orielstat.com\/blog\/2024\/01\/11\/\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"elementor-icon-list-text elementor-post-info__item elementor-post-info__item--type-date\">\n\t\t\t\t\t\t\t\t\t\tJanuary 11, 2024\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t<\/li>\n\t\t\t\t<\/ul>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-25cfb2d elementor-widget elementor-widget-heading\" data-id=\"25cfb2d\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.16.0 - 17-10-2023 *\/\n.elementor-heading-title{padding:0;margin:0;line-height:1}.elementor-widget-heading .elementor-heading-title[class*=elementor-size-]>a{color:inherit;font-size:inherit;line-height:inherit}.elementor-widget-heading .elementor-heading-title.elementor-size-small{font-size:15px}.elementor-widget-heading .elementor-heading-title.elementor-size-medium{font-size:19px}.elementor-widget-heading .elementor-heading-title.elementor-size-large{font-size:29px}.elementor-widget-heading .elementor-heading-title.elementor-size-xl{font-size:39px}.elementor-widget-heading .elementor-heading-title.elementor-size-xxl{font-size:59px}<\/style><h1 class=\"elementor-heading-title elementor-size-default\">Regulatory Implications of \u201cReshoring\u201d or Relocating Your Medical Device Manufacturing Facility<\/h1>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f7a5edb elementor-widget elementor-widget-text-editor\" data-id=\"f7a5edb\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.16.0 - 17-10-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>There comes a time in the evolution of every medical device company when big changes need to be made with regard to manufacturing, most significantly where it&#8217;s done. There are many strategic factors to consider when moving medical device production to another country, including:<\/p><ul><li>Labor costs<\/li><li>Access to highly skilled labor<\/li><li>Local supplier network<\/li><li>Proximity to markets being served<\/li><li>Infrastructure and logistics<\/li><li>Geopolitical risk<\/li><li>Economic stability<\/li><li>Rule of law\/low corruption<\/li><li>Respect for intellectual property<\/li><li>Free trade agreements<\/li><li>Government support\/economic incentives<\/li><li>QA\/RA<\/li><\/ul><p>As a manufacturer making the decision to \u201conshore\u201d or transfer operations to another country, the pros and cons noted above can improve or diminish the time and resources budgeted. For example, 10+ years ago China&#8217;s seemingly endless supply of inexpensive labor and expansive supply chains made it the de facto choice for manufacturing. China is still the #1 choice for outsourced medical device manufacturing, but a challenging supplier network has minimized it as an attractive option to serve the US market. Recent problems are opening the door for growing manufacturing hubs in other countries such as Costa Rica, Ireland, and Mexico. Compared to 1020 years ago, manufacturers are definitely doing a more holistic analysis of benefits beyond labor and logistics. While there are certainly a wide variety of topics to consider, we&#8217;ll focus on the QA\/RA aspects you need to consider.<\/p><h3>\u00a0<\/h3><h3>Take Advantage of Free Local Government Resources<\/h3><p>You&#8217;re not in this alone. Many countries are working hard to attract medical technology companies because they recognize that the industry is a good source of steady jobs for local citizens. Many countries have an economic development office that can provide free or low-cost help scouting locations within the country, performing tax analyses, or referring you to trusted local real estate, legal, and regulatory experts. Here&#8217;s a short list of countries that provide excellent support to medical device and IVD companies considering relocation in their country (listed in alphabetical order). The <a href=\"https:\/\/waipa.org\/members\/\">World Association of Investment Promotion Agencies<\/a>\u00a0contains a very comprehensive list of resources.<\/p><ul><li><a href=\"https:\/\/www.cinde.org\/en\/sectors\/life-sciences\">Costa Rica<\/a>\u00a0The Costa Rican Investment Promotion Agency (CINDE) offers significant support to device companies considering a move. More than 60 device companies have plants there including many major multinationals.<\/li><li><a href=\"https:\/\/www.investindia.gov.in\/sector\/medical-devices\">India<\/a>\u00a0Many companies equate India with low-cost manufacturing, but the government is making a big Make In India push to attract all levels of device manufacturing. The country is currently constructing four medical device parks throughout the country, a sign of its commitment to expanding the industry.<\/li><li><a href=\"https:\/\/www.idaireland.com\/\">Ireland<\/a>\u00a0With a population smaller than many US states (5 million) it may surprise you that 19 of the top 25 medical device companies have manufacturing plants here. IDA Ireland has been a force in making that happen and offers tremendous resources for companies considering Europe.<\/li><li><a href=\"https:\/\/www.edb.gov.sg\/en\/our-industries\/medical-technology.html\">Singapore<\/a> Well known as an Asian technology hub, Singapore&#8217;s Economic Development Board (EDP) has put its focus on attracting medical technology companies. The country is one of the most business-friendly worldwide and ideally located in Asia.<\/li><li><a href=\"https:\/\/www.selectusa.gov\/reselectusa\">United States<\/a> If you&#8217;re a US company thinking about bringing manufacturing back home to the #1 medical device market, look no further than Select USA. As the name implies, they offer a bounty of services to help you make the transition. Don&#8217;t forget about resources offered by states and large cities.<\/li><\/ul><h3>\u00a0<\/h3><h3>Important Tactical Factors to Consider<\/h3><p>Whatever your strategic reasons for considering a shift of manufacturing sites, you&#8217;re smart to examine the quality and regulatory implications of such a change. Let&#8217;s examine some of the factors that increase the complexity of a move, such as regulatory and quality management systems compliance, equipment\/process validation, supplier risks, and more.<\/p><h4>\u00a0<\/h4><h3>Regulatory Maturity of the Host Country<\/h3><p>First, consider the regulatory landscape of the market being evaluated. Are the regulations well established or evolving? This should not be overlooked, because some countries with evolving systems have lengthy waits for GMP plant inspections for new facilities and can sometimes impose significant new requirements on short notice. Also, keep in mind that if you plan to sell in the market where you will relocate production, you&#8217;ll need to go through the product registration process and obtain a Certificate of Free Sale (or CFG from FDA) to support registrations in other countries from the country in which your facility is based. In some countries that registration is fairly painless, but in others your regulatory status in the US or Europe makes no difference. Obviously, you won&#8217;t need to do that if you are a US company \u201conshoring\u201d production back to the US.<\/p><p>Rest assured that regardless of where you manufacture your medical devices, the regulatory requirements in the country in which you will ultimately sell the device will not vary. You must be able to produce the appropriate documentation that can show the devices were manufactured as approved by the regulator in the country where the device will ultimately be sold.<\/p><h4>\u00a0<\/h4><h3>Quality Management System Compliance<\/h3><p>If you are currently selling a medical device in a regulated environment, it is highly likely your existing manufacturing facility follows ISO 13485:2016 and\/or a similar country-specific QMS regulation such as the Quality System Regulation in the US (21 CFR Part 820). When you move your manufacturing operations to a new physical location, you will likely need to obtain a new ISO certificate or approval prior to ramping up operations, even if the procedures from the original manufacturing facility transferred along with the broader operations transfer. It is important to consider inventory levels from the original manufacturing site along with the anticipated timelines for QMS implementation and approval at the new site so that your customers do not run short on supply. More on that later.<\/p><h4>\u00a0<\/h4><h3>Equipment and Process Validation<\/h3><p>You&#8217;ve made a considerable effort to validate local manufacturing processes and equipment. Now, you will have to complete some of that work again. Will you be transferring all equipment to the new facility? Is the manufacturing line being expanded\u2019 Is sterilization involved\u2019 Are you moving the entire manufacturing process or just a portion of it? Whatever the case, you&#8217;ll want to assemble a cross-functional engineering, manufacturing, quality, and process engineering team and create an exploded manufacturing process map.<\/p><h4>\u00a0<\/h4><h3>Risk Management Plan Updates<\/h3><p>The new host country will have its set of own risks that differ from your current host country. Assumptions and mitigation plans will need to be reviewed and put in place in light of the new region. A common change from one country to the next is environmental conditions. Fluctuating temperature and humidity affect product performance. As an example, if a device needs to be stored at a certain temperature and humidity per shelf life testing, the company will need to ensure that manufacturing and warehouse conditions of the location are capable of meeting these requirements. If a device needs to be stored within a narrow heat and humidity range, it may become cost prohibitive to establish a manufacturing operation in very hot or cold climates due to the energy costs associated with maintaining that climate.<\/p><h3>\u00a0<\/h3><h3>Tribal Knowledge and Paying to Move Your Waste<\/h3><p>It is always important to remember that a production facility is not an assemblage of machinery with a roof over it it is an ecosystem made functional by real people. Regardless of your reasons for shifting manufacturing, those workers and managers have gained knowledge about your manufacturing process that is not documented in any work instructions. In addition, avoid paying to move waste from your existing manufacturing facility to your new location. Meaning, as your transition team observes, dissects, and documents the process flow from raw material receipt through packaging and final testing, apply Lean and Six Sigma principles to identify and remove bottlenecks and waste within the process so that what gets transferred is a lean, mean, well-oiled machine. Doing so will also help in planning the cost of the move and the footprint requirements of the destination location and will facilitate appropriate quality management system creation at the destination location.<\/p><h3>\u00a0<\/h3><h3>Supplier Risks Posed by Moving Manufacturing<\/h3><p>If you are, for example, moving assembly out of Asia but you have critical component suppliers there, have you considered the implications of now having to ship your components from Asia across the world to your new facility? You&#8217;ll want to explore how this might raise costs, create new supply risks, and also see if any tariffs will be assessed.<\/p><p>Suppliers can also introduce significant risk to your company that extends well beyond the safety and efficacy of finished devices they impact your ongoing compliance with regulations and present operational risks that might not be obvious. Here\u2019s a quick story to illustrate that point.<\/p><p>In late 2017, Kentucky Fried Chicken (KFC) changed their UK delivery logistics provider. Their previous delivery logistics provider had distribution centers throughout the UK. The new provider was large and reputable and promised lower costs but had only one UK distribution center. While the new supplier did indeed deliver lower costs, they forgot to deliver one thing: the chicken. For weeks, hundreds of outlets were KF minus the C. The fiasco resulted in tens of millions in lost sales, angry customers, and an avalanche of social media mockery.<\/p><p>The point is that while your focus may be on maintaining compliance and product quality through the transition, don&#8217;t underestimate the risks associated with moving production halfway around the world from some of your existing suppliers. Language barriers can cause miscommunications. Schedule changes can result in material delivery interruptions. Trade disputes. Import tariffs. Currency fluctuations. All of these factors can disrupt production or raise costs. Review your approved supplier list and be sure to update supplier quality agreements as needed according to clause 4.1.5 in ISO 13485:2016.<\/p><h3>\u00a0<\/h3><h3>Planning Inventory to Account for Temporary Delays and Productivity Losses<\/h3><p>Despite doing all you can to train new staff and get machinery up and running quickly, you should assume there will be a temporary decline in product quality and productivity. After all, you&#8217;ll have an entirely new team of workers and management, so problems and slowdowns are to be expected for a period of time. One way to mitigate this risk is to run both facilities in parallel for a short period of time, but this is generally only practical if machinery and equipment are not being moved.<\/p><p>Also, you should plan for government permits delays, construction contractors missing deadlines, and equipment shipments getting stuck in customs. Take all of this into account, and plan for the production of extra inventory to ensure that you have enough stock on hand to meet upcoming orders for months.<\/p><h3>\u00a0<\/h3><h3>Let Us Help You Conduct an Assessment<\/h3><p>Moving a medical device manufacturing facility is a huge undertaking with significant risks and rewards. Getting out in front and folding quality, regulatory, and Lean principles into the overall strategy can help avoid disruption of supply. 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href=\"https:\/\/www.orielstat.com\/blog\/category\/software-cybersecurity\/\">Software and Cybersecurity<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-32\"><a href=\"https:\/\/www.orielstat.com\/blog\/category\/supplier-management\/\">Supplier Management<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-67\"><a href=\"https:\/\/www.orielstat.com\/blog\/category\/training\/\">Training<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-1\"><a href=\"https:\/\/www.orielstat.com\/blog\/category\/medical-device-ra-qa\/\">Uncategorized<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-35\"><a href=\"https:\/\/www.orielstat.com\/blog\/category\/validation\/\">Validation<\/a>\n<\/li>\n\t\t\t<\/ul>\n\n\t\t\t<\/section>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Regulatory Implications of \u201cReshoring\u201d or Relocating Your Medical Device Manufacturing Facility There comes a time in the evolution of every medical device company when big changes need to be made with regard to manufacturing, most significantly where it&#8217;s done. There are many strategic factors to consider when moving medical device production to another country, including: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"elementor_header_footer","format":"standard","meta":[],"categories":[12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.7 (Yoast SEO v21.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Oriel STAT A MATRIX &#8211; ELIQUENT Life Sciences Blog<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.orielstat.com\/blog\/moving-medical-manufacturing-to-another-country\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:description\" content=\"Regulatory Implications of \u201cReshoring\u201d or Relocating Your Medical Device Manufacturing Facility There comes a time in the evolution of every medical device company when big changes need to be made with regard to manufacturing, most significantly where it&#8217;s done. 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