Finalizing a new product can often be more complex than developing the initial prototype. While a prototype only needs to be functional, a product ready for the market must consider component lifecycle, cost, and supply chain management factors.
In the medical equipment industry, optimizing the bill of materials (BOM) for a device’s computing aspect is crucial; this helps ensure cost-effectiveness while maintaining the desired quality and performance of the end product.
Compute Portion of a Medical Device
First, let me explain what I mean by the compute portion of a medical device. Many medical devices, including imaging equipment, blood analyzers, and surgical/robotic systems require microprocessors. Sometimes, these processors are built into the device, but the device often connects to a standalone computer that handles the processing duties. Managing the BOM for these devices is an essential element to overall medical equipment BOM optimization.
There are four primary considerations when assessing the components of a computer powering a medical device.
Consideration 1: Materials Costs
Cost control is critical in the medical equipment industry, where precision, reliability, and compliance are non-negotiable. While engineers may find it challenging to grasp BOM pricing during the design phase, it is imperative to communicate the need for cost optimization, especially for products where a slight change in processing power can drastically impact the final overall cost. Manufacturers and original equipment manufacturers (OEMs) must prioritize strategies that promote cost control without compromising the integrity of the final product.
By choosing an embedded platform, you can customize the features according to your needs and eliminate the cost of features you do not need. However, this may result in a more restricted supply chain as the product is more specialized and produced in smaller quantities. Conversely, opting for an off-the-shelf platform provides flexibility in the supply chain but may come with a higher cost profile that may not be optimal. Depending on your choice, you may put more energy into managing the supply chain or more on pushing for concessions in pricing.
Consideration 2: Monitoring the Supply Chain
Engineering the product only to be unable to manufacture it in quantity for lack of components, expense, or the inability to sell in some markets can be highly frustrating or even disastrous.
Constant monitoring is essential to address the volatility in material costs, including market trends, supplier dynamics, and economic factors that may influence pricing. Continuous tracking and analysis of cost-related data enable manufacturers to make informed decisions, adapt to market changes, and strategically position their products for success.
In the digital transformation era, data and analytics have become a powerful tool for BOM optimization. Leveraging data-driven insights allows manufacturers to forecast trends, identify cost-saving opportunities, and make informed decisions throughout the product lifecycle. Analytical tools can highlight patterns in cost fluctuations, enabling proactive design or sourcing strategy adjustments. A robust monitoring plan should include feedback from component manufacturers, regulatory bodies, and transportation carriers.
Consideration 3: Impact of Engineering Change Orders (ECOs)
Once the product has been tested in the lab and considered ready, promptly introducing it to the market is critical. Unfortunately, in pursuing a working prototype, considerations regarding an ECO may be overlooked.
An ECO occurs when an active product requires a component change. A desire to enhance or improve the product may drive the need for a change, but shortages in the supply chain or end-of-life decisions by technology manufacturers are more often the driving factor. ECOs are particularly challenging in the medical field, where changes to the BOM can result in the need for re-certification and the ensuing costs and disruptions.
Collaboration between engineering, procurement, and suppliers is necessary to review the final BOM prior to the start of product introduction. Suppliers often have insight into which SKUs will be the most stable in terms of supply and will select specific SKUs to have a longer product roadmap life. Choosing the right components before product launch helps medical device manufacturers control costs and reduce risk.
Consideration 4: Balancing Cost-Efficiency and Quality
Striking the right balance between cost efficiency and product quality is one of the paramount challenges in BOM optimization. While cost control is imperative, it should not come at the expense of compromising medical equipment’s stability, performance, or safety. Manufacturers must adopt a holistic approach considering cost-saving measures and the industry’s stringent quality requirements, ensuring that the final product is both cost-effective and of high quality.
Maintaining the integrity of medical equipment is non-negotiable. Cost-efficient strategies must align with rigorous performance and stability metrics and environmental and safety testing. Balancing cost considerations with quality assurance requires working with partners that can provide quality components and the engineering and testing experience to back them up.
Arrow Electronics, a Trusted Service Provider in BOM Management
As a leading system builder for medical OEMs, Arrow Electronics is an ally in pursuing effective BOM management. Arrow has expertise spanning all product design and manufacturing phases, offering valuable support from conception to market release.
Arrow’s BOM optimization services provide a comprehensive solution to identify the most suitable materials for a given design, addressing considerations for product availability, end-of-life components, logistics, and adherence to international regulations. During ECOs, Arrow can recalculate the entire BOM, optimizing logistics to minimize disruptions to production schedules and ensuring seamless integration of changes, maintaining efficiency and reducing the impact on overall production timelines.
Arrow’s procurement services extend beyond cost considerations to encompass the verification of suppliers and parts, so that all components meet stringent quality standards, origin requirements, and compliance regulations. The procurement process includes thorough verification, particularly when incorporating secondary market units, mitigating the risk of counterfeit parts entering the supply chain.
Arrow aligns with evolving standards and regulations, emphasizing the importance of sustainability in material and manufacturing decisions. This commitment addresses regulatory requirements and reflects a broader industry shift towards environmentally conscious practices. Arrow is crucial in helping manufacturers make choices that contribute to a sustainable future.
Conclusion
Optimizing the BOM of medical equipment requires a nuanced approach that considers the dynamic nature of material costs, the challenges posed by ECOs and redesigns, and the delicate balance between cost efficiency and quality assurance. Arrow is a reliable collaborator, offering solutions spanning the entire spectrum of BOM management, from strategic optimization to navigating the complexities of engineering changes. As the medtech industry evolves, embracing proactive BOM management strategies will enable success in a competitive and dynamic market.
