Originally published in the Proceedings of the SMTA International Conference, Orlando, Florida, October 7 - 11, 2007.

Kevin Stokes and Paul Plante Kimball Electronics Group Jasper, IN USA kstokes@kimball.com
ABSTRACT Medical equipment manufacturers face unique challenges in outsourcing projects both because of the regulatory environment and also because of product life cycles which often can be up to 10 years in length. This presentation looks at some of the key challenges electronics manufacturing services (EMS) providers specializing in this area must routinely address: Significant variance in volumes over the life cycle of the product Periodic specialized engineering support needs Extensive test support capabilities Procurement strategies which support both cost competitive sourcing of “commodity” materials plus very specialized custom parts or third-party hardware Proactive identification of component obsolescence issues, and requirements for end-of-life buys and subsequent stocking of that material for several years Fast response time in product development and repair depot activities Extensive documentation support capabilities and required third-party quality certifications Ability to support fairly long end-of-life cycle requirements with limited ability to cost effectively redesign the product Product validation requirements which limit both the Approved Vendor List (AVL) and the ability to change processes and/or equipment on the manufacturing floor The ability to retain and disseminate traceability and manufacturing quality data on request as long as the product remains in use in the field. Additionally, several project examples illustrating ways that an EMS provider and its OEM customers have teamed to address these issues will be discussed. Key words: Medical product outsourcing, EMS, lifecycle management, contract manufacturing. INTRODUCTION The challenges for medical equipment manufacturers continue to increase. There are several key market trends which are increasing the complexity of product lifecycle management (PLM) including healthcare cost reduction focus and the impact of RoHS legislation on component availability. At the same time, the core drivers of product development and manufacturing complexity, regulatory compliance considerations and healthcare provider purchasing processes are not changing. While outsourcing can tap the expertise needed to address these issues, it is important to recognize that not every EMS provider business model adequately addresses the PLM challenges inherent in medical device manufacturing. This paper will look at key service requirements which should be considered in selecting an EMS provider, discuss key processes that can help address these issues and then provide examples of ways these processes have been applied to support specific medical equipment manufacturing needs. KEY SERVICE REQUIREMENTS Areas where medical products tend to vary from consumer electronics include: Volumes over the life of the product Engineering support Obsolescence management Product test requirements Post-manufacturing response time Regulatory compliance. In selecting an EMS provider, it is important to determine whether or not the systems and processes in place are aligned with these service requirements. Production Volumes While consumer medical devices may have relatively high volumes, there are many products which run in the low-tomedium volume ranges. The regulatory qualification process and healthcare service provider procurement practices often create a product demand pattern that runs at low volumes for an extended introduction period, ramps to volume and then has an extended low volume end-of-life

China doesn’t exempt medical devices from its RoHS requirements. it is important to understand whether or not the contractor has a cost effective and robust process for meeting medical history recordkeeping and traceability requirements. For instance. different regions of the world are creating different types of legislation. In long-lifecycle products the scope of work often grows over time. depending on the project requirements. Obsolescence management It is not unusual to see lifecycles of up to 10 years in medical capital equipment. there is a design concept review which may include design improvement recommendations or simply validate documentation and quote assumptions. Regulatory Compliance Regulatory compliance drives two evaluation issues. there may be requirements for greater detail in support documentation related to design improvement recommendations. While technical support capabilities in this area are important. large-scale capital equipment may have complex functional test requirements. and the ability to support conversions as required over time. Addressing the challenges has involved a combination of core processes which are used with all customers and medical-specific support tailored to the needs of low-to-medium volume customers. There is both a logistics and a customer service element. Another growing area of complexity is driven by RoHS legislation. Post-Manufacturing Support Response Time Post-manufacturing support is a different skill set from production support. The production launch phase may . With medical products. The NPI process actually begins during the bid phase which includes both a feasibility review and identification of potential design support issues. This presents significant PLM challenges as consumer product lifecycles typically run less than two years and off-the-shelf component lifecycles are driven by these higher volume electronic products. As a result. First. sustaining engineering support becomes important as long product lifecycles can generate significant obsolescence management issues. Evaluating the contractor’s commitment to medical industry business can be valuable in determining whether or not the company is the best choice for a long-term project. A contractor building PCBAs today who doesn’t need medical-specific registrations may see the scope of project grow to a point where these registrations are necessary. there is often a contractual commitment on repair depot response time. When repair depot and refurbishment are required. As a result there is often a need to either specify and support custom components or manage the inventory costs associated with lifetime buys of critical components as they enter end-of-life. Once a bid is won. Engineering Support Engineering support can also be more complex. which includes Design for: • Manufacturability (DFM) • Testability (DFT) • Six Sigma (DFSS) • Life Cycle Management. companies without these registrations may also have robust support systems. There is growing use of RF technology in medical devices and this drives a need for RF test expertise in product development. Additionally. Its goal is to ensure that all issues associated with project start-up are addressed and that longer-term PLM issues are identified early. The low volume portion of the product cycle doesn’t fit well in every EMS business model and the variances in demand need to be carefully monitored to ensure that ramps to volume are supported and that any inventory issues that evolve from varying volumes are adequately addressed.period. Test Support Medical products have a range of test challenges. particularly if post-manufacturing services are added. many component manufacturers are discontinuing leaded parts. Additionally. often the production contractor represents the most cost effective choice for repair depot as volumes may not justify two sources or duplicate sets of specialized test equipment. From an EMS provider selection standpoint it can be valuable to understand how the contractor’s business model addresses extended PLM requirements. it is important to select a contractor who has both a robust procurement system capable of identifying component obsolescence or availability issues early. The NPI process addresses the issues which arise as a new product is entering the facility. As a result it is important to understand EMS providers’ ability to support both production test requirements and the technically more complex troubleshooting and test requirements driven by long-term repair depot activities. it is also important to evaluate a contractor’s processes and track record in supporting the logistics side of this requirement. Although medical devices are exempted from EU RoHS requirements. While most EMS providers don’t actually manage the product qualification process. This drives the second point of evaluation. However. It can encompass product development support or simply address the issues associated with launch of a new project. Over time. Two core processes which support medical product manufacturing are New Product Introduction (NPI) and Transfer of Work (TOW). As the product is developed there is a need for Design for Success engineering support. production and post-manufacturing support services. Thirdparty registrations such as FDA or ISO 13485 demonstrate a commitment to understanding and meeting these requirements. SYSTEMS WHICH ADDRESS THESE CHALLENGES Kimball Electronics Group (KEG) Medical Solutions has seen these challenges within its customer base.

the team is identified and strategy meetings begin. This has been designed as a staged improvement. As this volume now doubles or triples a scalable process is in place to ensure demand is met. cost reduction. The customer sees product development and marketing as a core competency. A key benefit of this relationship to the customer has been a smooth ramp to volume and the ability to tailor the use of engineering resources. the emphasis expands to include a focus on field performance and continuous improvement. Key points addressed in this phase can include: Design Failure Modes and Effects Analysis (DFMEA) DFT/DFM review and recommendations Identification of special product or process characteristics Material specifications Concept Verification (CV) testing Highly Accelerated Life Testing (HALT) Production of engineering samples Design intent prototypes Design Verification (DV) testing Preliminary capability testing Engineering drawing release Approved Vendor List review Bill of Material (BOM) review Process Failure Modes and Effects Analysis (PFMEA) Development of a control plan Validation testing Manufacturing feasibility studies Capacity verification Supplier tooling Pilot build Process Validation (PV) testing Intellectual Property (IP) security. This plan defines a product validation process used for a 500 piece production run. review depending on project requirements. Initially. Once in volume production. the Company uses Part Miner as an internal tool and discusses projected lifecycle issues with critical component suppliers. The product is built in KEG’s Tampa. The keypad was redesigned to improve durability. The program team has also identified several potential component obsolescence issues. Once the analysis is approved. EMS engineering resources have been integrated as needed to support design improvements for subsequent generations of product. program management and others as needed. There is a kickoff meeting to make initial assignments. It includes both a PCBA and a unit build. TRANSLATING CAPABILITIES INTO SPECIFIC PROJECT BENEFITS Example 1 – NPI Support A developer of physical therapy products needed manufacturing support. Once assumptions are validated a safe launch plan is created. The key focus is on analyzing project requirements and planning appropriately. risks. The product currently contains lead.include a product verification review and/or a product and process validation review. There is a focus both on creating systems which monitor internal metrics and customer feedback which tie to a corrective action process. There is a formal weekly. specific parts have been targeted for cost improvement opportunities. A switch substitution has also been recommended to improve performance in the field. The build facility is both FDA registered and ISO 13485 certified. Example 2 – Extended Product Life Cycle . Over time. The component engineering team actually studied the product in the field prior to making recommendations. but in the next product generation the full set of redesign recommendations will be implemented. but is scheduled for conversion to RoHS compliance in 2008. The customer receives the safe launch plan and qualification units for their analysis. Florida facility and shipped to the customer’s distribution center in Texas. Additionally. A color-coded (redgreen-yellow) action register is used to monitor activities. needed team members and action plan. and in some cases daily. Its starts with an internal analysis by the program manager which defines costs. other areas have been identified for improvement as both production metrics and field data have been analyzed. the pad is reinforced with a molded plastic support plate. Typically the receiving plant will send key personnel to the sending plant to drive knowledge transfer. The TOW process is designed to support transition between KEG facilities to support product needs such as volume changes. During these visits the team will also witness production. quality. The register is available via the Company’s intranet to all project personnel. TOW is a pull process with the program manager at the receiving facility driving the TOW. identify cost reduction opportunities and support market-driven requirements such as RoHS conversion. Currently. review prior corrective actions and document potential issues. To support PLM analysis. etc. The project started out with lower volumes as it was qualified in various markets for insurance coverage. The degree of complexity is typically driven by project requirements and customer preferences. and in measuring progress towards jointly agreed upon cost reduction goals. DFM/DFT recommendations were made. Once the project enters production startup the focus is placed on executing and controlling production. There is also focus on measuring quote to actual costs. These personnel normally include engineering.

the engineering team designed and qualified an electrically and mechanically comparable replacement with image quality improvement and domestic hardware/firmware control to minimize overall display assembly redesign. its assembly services are focused on mid-volume complex builds. Although the associated computer assemblies were originally build-to-print. the customer is a manufacturer of medical imaging equipment and the products are image resonator units used with CAT scan equipment. electrical and mechanical compatibility with the original monitor. The large component count. As a result. and it provides dedicated engineering support. All goals were accomplished. which included conversion of the original off-the-shelf CRT monitor to a 17” SXGA LCD display. The customer operation has been acquired by larger medical manufacturers twice during that period and the cost justification for continued outsourcing has remained viable during post-acquisition cost analysis. typical production volumes and long life cycle make clustering common projects extremely cost effective from both a total cost and an inventory management standpoint. The high service/high quality/fast response environment of the medical imaging equipment market makes co-locating prototyping. longterm component supply line for the life of the customer’s end product. The project currently supports six different product types which have a varying range of volumes at different stages in the life cycle. KEG acts as the emergency repair depot. The project has been in place at the Tampa facility for more than a decade. qualifying component . Initially. Each product type has a top level Bill of Materials (BOM) averaging 200 line items and contains four complex printed circuit assemblies whose BOMs each average 400-500 line items. and best-in-class image quality were the key project requirements. As mentioned in the previous example.In this example. When replacement part stock is no longer manufactured or available in end-of-life inventory supplies. assembles and tests the printed circuit assemblies. Example 3 – Sustaining Engineering Support The customer is a medical imaging equipment manufacturer who wanted assembly support in close proximity to its Silicon Valley location to augment its lean manufacturing philosophy in final assembly. During this period while the offshore boards were being depleted. Migrating to a custom. This solution also provided the customer with extended lifecycle for the end product. Installed units must be supported over the entire life of the product. CA facility performs assembly of intelligent data acquisition and display subsystems. the facility building the project is both FDA registered and ISO 13485 certified. and then builds the image resonator unit. This level of quality system focus is not required for this project from a regulatory standpoint. domestic board design minimized costs and provided a reliable. The Tampa facility supports new product development. A few years later when an electronic video board in the display became unavailable. The team also assumed responsibility for agency recertifications. However. and design control of the display subsystem. Once the market accepts the new product. the facility provided sustaining engineering services by identifying the OEM offshore manufacturer and securing the limited number of the boards remaining directly from their factory to keep customer production deliveries on schedule. it has developed LCD display technology expertise for medical and industrial markets. Elevated temperature burnin is provided on certain products. having a highly compatible quality environment has made it easy for this customer to add additional product to the project and has also supported growth of repair depot support activities. it is not unusual to see as many as 100 engineering change notices (ECNs). the customer subsequently outsourced projects to manufacture additional computer-based data acquisition subsystems in the same end product. The facility’s initial role in the end product lifecycle was to support the customer in redesign of the display subsystem. Long unit life spans also drive a requirement for extended end-oflife production support in lower volumes. typical volume increases to 30-50 units per month. accepting returns directly from the hospital and troubleshooting the failed part until repaired. qualifying supplier sources. The end product is an intravenous ultrasound system for which KEG’s Fremont. Project complexity drives a range of cost challenges. KEG’s engineering team now assumes the sustaining engineering role to address proactively periodic component end-of-life situations with critical supply line management and engineering support. each model runs 5-10 units/month during the product introduction which may last over a year. minimizing the involvement of the customer’s engineering staff who was engaged in next generation product development. since the product is integrated into a larger unit elsewhere. resulting in a highly compatible LCD monitor in a cast aluminum housing with a unique tilt/swivel mechanism. During the first year of production. The Fremont facility represented a cost effective option because it is located in the same general area as the customer’s manufacturing complex. This includes identifying possible replacement components. Industrial design (aesthetic blending with the end product). This is integrated with the final product at the customer’s Midwest manufacturing facility. production and endof-life support advantageous because it supports improved response speed and communications efficiency. The facility continues to supply the customer’s final assembly operation with 3-piece subassembly kits on demand.

Additional benefits include high quality assemblies. but with the labor cost reduction. KEG’s Tampa facility is producing the PCBAs. securing inventory. It was a mature product with low ECN requirements. KEG’s TOW process has been used for the migration planning. product sustainability and continued cost reduction. Volumes are variable. A key challenge that the team has been able to address is the obsolescence issue caused by use of offthe-shelf components with lifecycles much shorter than that of the medical product. and managing engineering change processes both internally and with the customer as needed. both the OEM and EMS provider need to carefully analyze project scope and long-term requirements. Thailand is FDA registered and ISO 13485 certified. The TOW process ensures that there are adequate qualification procedures and that all issues that could potentially impact product quality are carefully analyzed and addressed. Benefits to this customer include a smaller manufacturing footprint and a minimal raw inventory storage space requirement in their facilities. However. a foundation of robust core processes combined with an understanding of this segment of the medical market’s unique regulatory and market dynamics can result in teaming efforts which support customer goals for market entry. Tampa provided the kits for that production run to minimize variables. The customer saw value in migrating some product offshore but was very concerned with the potential for intellectual property theft. shipment container and packaging have been analyzed to determine if any potential issues exist that may impact product quality given the change in transport methods. A logistics value stream map has also been drawn up. KEG will serialize the board in ways that identify factory of origin.TOW In this final example. and minimization of customer engineering time related to component life cycle management. The end result was that a large PCBA with some manual assembly content was selected for migration to KEG’s Thailand facility. The Thailand facility offers the same level of regulatory compliance as the Tampa facility. CONCLUSION Outsourcing long lifecycle medical equipment is not without challenge. A 500-piece validation run followed the qualification run. quick reaction time to customer special needs. Once customer validation is complete. on time deliveries. The functionality is still programmed in Tampa and final functional test is in Tampa. Example 4 . To achieve the optimum outcome. maintenance of inventory buffer stock in Tampa is cost effective. Customer benefits include the ability to smoothly transition mature product to lower cost manufacturing regions as their market cost dynamics change. product handling requirements. ramp-up begins and Thailand will begin sourcing material to the AVL. the customer was a manufacturer of medical patient monitoring devices. The project has a mix of product families with varying degrees of market-driven margin sensitivity. From a traceability standpoint. The Thailand engineering team travelled to Tampa to watch the board in migration prior to running a qualification production run of 50 boards in Tampa.performance and compatibility via engineering tests and reports. . In addition to analyzing logistics flow.