In years past, one of the most effective strategies for medical device manufacturers was to move their operations overseas, due to cheaper and more available resources, first of all the labour costs.
Over the last decade, a new strategic move has risen: the reshoring of manufacturing. The offshore production has lost some of its appeal, a number of factors has gradually took away the benefits of this strategy:
- rise in labour costs in major manufacturing countries (e.g. China, India)
- product quality issues
- labour rights
- intellectual property
- significant growth in the advanced manufacturing base in Europe
- flexibility and logistic disadvantages
More and more often, medical devices manufacturers reconsider their offshoring production strategies and look for European contract manufacturers that provide reliable approach, while offering cost effectiveness and strategic partnerships.The coronavirus pandemic and its impact has speed up the pace of change, making the reshoring to Europe a rising trend in the Healthcare industry, because of the many benefits medical device manufacturers can realize moving their operations in Europe.
1. Reduction in shipping costs and times
The closer to home the manufacturing facilities are, the shorter time-to-market and lower the costs.
Creanova d.o.o. located in Serbia allows us to provide our clients with:
- a lead time of 1 week, against 7 weeks for China
- lower transportation costs: for a container 6-7 times less from Serbia than from China
- lower transportation costs: for a single pallet 5-8 times less from Serbia than from China (startup phase)
- stable costs in comparison with highly volatile trasportation costs from China
2. More flexibility
Reshoring in Europe means more flexibility in terms of batch sizes and order volumes. The vicinity to the contract manufacturer makes easier to solve issues with speed and efficiency.
Creanova d.o.o. ensures you the maximum flexibility with short logistic time in case you wish to change your delivery quantity or other features of your order (e.g. personalize / modify label, color, packaging).
3. Fluid communication
It is much easier to schedule meetings between organizations in Europe and then with neighbouring time zone. It can be a real challenge working with suppliers 7 hours ahead because it takes extensive planning to find the right time that works for both parties. When you work with European partners, the time difference is within 3-hours.
The sophistication of medical devices increases the negative effect of time zone constraints, requiring continuous sharing of ideas and communication throughout the development and manufacturing processes.
4. Better quality and skilled workforce
Medical devices must be reliable and safe, which makes the product quality a requirement in the manufacturing process. Partnering with an European contract manufacturer means sharing the same stringent and standardized parameters that characterized European regulations.
In addition, moving the main facilities closer to home allows more direct control over operations, better quality management, and more skilled workforce which has the knowledge, skills, and expertise to deal with complex ideas and designs.
It results in a more accurate product, which is why European-made goods have a reputation for being excellent.
Among the several technologies we offer, Creanova is highly experienced in complex and high-quality injection molded enclosures. We anticipate any hiccups and drive your project to the desired end product in shortest time possible. We match the high quality standards and medical requirements with the low production volume, that characterize the medical market.
In addition, we select a high-skilled team according to your projects’ features to ensure the most relevant technical skills and knowledge throughout the process.
5. Smooth distribution
Items developed overseas require a long, drawn-out journey which heavily affects the transport price and safety.
For European operations the process is streamlined, offering more control, better handling of the products and consequent decreasing of risk. This is even more important for medical device and equipment, for which the distribution process is required to be controlled.
6. Enhanced Intellectual Property management
Reshored operations benefit from improved patent protection and intellectual property laws, thanks to a shared regulatory system, the European ones. Most foreign countries have weak IP laws and systems in place, which makes it less challenging to steal ideas, trade secrets, or clone devices.
7. Easier opportunity of insite and in-person management
China requires an entry VISA, which is difficult to have and needs long time. In addition China closed its borders due to Covid-19 pandemic and foreign business operations will face a real problem till half of 2022.
The proximity between the OEM and contract manufacturer offers the opportunity to manage the relationship in-person and control the manufacturing process on-site, improving the quality control and strengthen the relationship with the supplier.
Located in Europe, Creanova d.o.o. is easy to visit in 2 days and logistic operations are quick and relatively affordable in case of urgency respect to the far-east. Also, jet lag is a thing of the past, increasing also your people’s efficiency of the working days after the trip.
8. Competitive labor costs
Outsourced operations generally meant more affordable labour in the past. Thanks to recent legislation, market changes, and worker demands, that’s no longer true.
The combination of higher labour costs with the rising costs of doing business in other countries, more expensive resources, makes the reshoring an option to seriously consider.
Creanova’s fully owned contract manufacturing site in Serbia provides a very competitive labor cost, which is foreseen to be stable for the next years.
As a leading medical device contract manufacturer, Creanova serves medical device companies with services built to the highest standards of quality.
Our team of experts can bring your medical project through each step of the development process and support you with a 360° solution: from design, engineering, prototyping up to contract manufacturing (including tooling, production, PCB Manufacturing and final assembly, certified ISO 13485).
We provide you with a medical device characterized by Italian design, in addition to the European manufacturing, a combination which allow you to create trust with your customers and a clear differentiation among your competitive landscape. Contact us to start a new project, together!