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Precision Engineering & Medtech EMS
December 31, 1969 |Estimated reading time: 8 minutes
In the 1980s, Singapore focused on low-cost manufacturing. As lower-cost markets emerged across Asia, the electronics and precision-engineering supply base in Singpore refocused to offer industry specialization. Now, that region has the high-level product quality and traceability that medical-device OEMs require.
By Lester Lu, IE Singapore
After shifting focus away from low-cost manufacturing, Singapore’s electronics and precision-engineering supply base moved to offer high levels of responsiveness, industry specialization, and technical support, combined with access to satellite manufacturing facilities in lower-cost regions. Now, the supply base routinely offers the product-development expertise, agency-approval support, third-party quality certification portfolio, and infrastructure for high-level product quality and traceability, required by medical-device original equipment manufacturers (OEMs). At the same time, many of these suppliers have globalized - offering their customers access to manufacturing facilities in low-cost regions of Asia including China, Thailand, Indonesia, Malaysia, and Vietnam, as well as access to manufacturing facilities in Europe and the U.S.
Figure 1. Production operators provide clean-room assembly for medical projects. The vertical integration found in this EMS operation’s business model provides medical OEMs with diverse product lines. Photo courtesy of Beyonics Technology Limited.
Manufacturing output within the biomedical sciences (BMS) sector of Singapore grew to $15 billion in 2006, achieving a 30.2% increase over the prior year. Pharmaceuticals accounted for 91% of the total output, while medical technology maintained output levels of over $1.3 billion. Value-added services grew by 47% over 2005, and employment expanded by 3.9%. Of the total jobs in the BMS manufacturing sector, 62% are in the medical technology area.1
Equally important is the complexity of electronics manufacturing projects that are moving into the region. Singapore continues to grow its reputation as the choice location for regional corporate headquarters, research operations, strategic alliances, and manufacturing of high-reliability medical products requiring precision-engineering capabilities. In 2006, Singapore experienced investments in high-value manufacturing activities such as implantable devices and sophisticated instrumentation systems.2
The range of products manufactured in the region is diverse. Approximately 30% of the world’s supply of hearing aids is manufactured in Singapore. Other products include defibrillators, heart monitors and amplifiers, endoscopy video systems, anesthesia pumps, surgical instruments and implants, inhalers, infusion pumps, light/heat treatment devices, scientific and analytical instrumentation, and disposables. Clean-room molding and assembly operations also are widely available (Figure 1). The region’s business models include a number of companies that combine electronic, electromechanical, and mechanical assembly capabilities with vertically integrated precision-engineering capabilities, such as plastics injection molding or metal fabrication for a complete product build.
Technology & Infrastructure
Optimized globalization strategies require a strong focus on analysis of the total cost of manufacturing choices. Labor-cost savings alone can be offset quickly by inefficiencies in project communication, schedule-change requests, production quality, or logistics costs. One growth driver in this region has been the availability of systems and infrastructures that address these costs. Foreign multinational companies (MNCs) and Singaporean agencies have teamed to create a manufacturing environment that addresses this combined requirement for competitive costs, exceptional responsiveness, and a commitment to high standards of product quality.
The Singaporean government supports pro-business initiatives; the country has listened to the needs of foreign MNCs and their supply base - addressing those needs with required programs and infrastructure. For example, the Medical Technology Advisory Committee (MTAC) was created in 2006 to enhance development of new technical capabilities, regulatory policies, and infrastructure to support the rapid growth of Singapore’s medical technology sector. The MTAC comprises 19 medical technology companies involved in manufacturing and/or research and development. Additionally, SPRING Singapore (www.spring.gov.sg) supports adoption of third-party quality standards including ISO 13485, IEC 60601 and Good Laboratory Practices (GLP), Technical References (TR), and Singapore Standards (SS). As the national standards body, it works to align Singapore standards with those of the international community. SPRING also manages the Singapore Accreditation Council (SAC), whose objective is to develop, maintain, and improve the standard of conformity-assessment activities in the country. It has signed mutual recognition arrangements (MRAs) with regional and international accreditation organizations covering more than 90 accreditation systems.
Diversified Supply Base
One key challenge when outsourcing complex projects is identifying a broad-enough mix of suppliers to support a range of product volume and manufacturing capabilities. Singapore’s mix of EMS and precision-engineering suppliers addresses this need. In the mid-80s, Singapore was one of the first points of expansion for the largest U.S. EMS companies. Today, most Tier I suppliers have a manufacturing facility in Singapore. The region is also home to a number of native EMS companies, which further refines the established EMS business model.
One Singapore-based company, Beyonics Technology Limited, has pioneered vertical integration within the medical-devices sector. Its capabilities include EMS, precision machining, precision plastics molding, and metal stamping. Its product portfolio includes infusion pumps, IV systems, safety syringes, disposable CAPD connectors, lancets, POC devices, and disposable surgical scrubs. The company operates facilities in Singapore, China, Malaysia, Indonesia, and Thailand.
According to Raymond Yee, VP of marketing for Beyonics, the medical electronics industry has a strong focus on accountability cost. Board-level consumer electronics is conservative in comparison because medical companies prefer proven technologies and consistent processes. Cost-reduction focus isn’t finding the absolute lowest cost through continuing redesigns and component substitution. Instead, it concentrates on minimizing hidden costs such as administration or logistics. For instance, overhead costs associated with medical device history record keeping is lower in Singapore than in the U.S. Strategies that combine a highly-skilled Singaporean workforce with access to lower-cost labor markets for labor-intensive portions of the product can reduce cost without impacting quality or support.
Yee cited an example of a large medical-device manufacturer who originally chose the company for its precision-molding capability. The product was a box-built clinical device, and the customer was using another EMS company in Singapore to manufacture the PCB assemblies (PCBAs) for the product. The customer performed sub- and final assembly in their facility in Singapore. Eventually, the customer decided to outsource final assembly of the subassembly as well. When they analyzed where the subassembly operation was performed, logistics cost was a deciding factor. They did not want to change their core supply base by moving the entire project to Beyonics, but having their supplier ship the PCBAs to the EMS company for final assembly was less expensive than to ship the enclosures to the company building the PCBAs. Beyonics’ degree of vertical integration was seen as a benefit because they offered precision engineering and electronics manufacturing skills (Figure 2).
Figure 2. This Singaporean EMS provider couples high-volume manufacturing with precision-engineering capabilities. Photo courtesy of Beyonics Technology Limited.
According to Yee, a global EMS provider can offer much to a high-volume OEM who wants to manufacture in dispersed locations. However, particularly in the medical device industry, many companies would rather outsource to a company with an Asia-only presence as long as the support infrastructure for quality, record keeping, and program management compares to what they have used in their home country. In many cases, OEMs do not want to pay the added overhead required by a company with a global presence.
Precision Engineering
Singapore’s precision-engineering industry offers a range of support for the medtech sector’s requirements in clean-room molding and/or assembly, precision machining, and stamping. Supplier capabilities range from custom components through complete unit builds. In some cases, suppliers provide a turnkey solution; in other cases, they may team up to address complex project needs. The range of products that suppliers manufacture in this segment covers optical lenses, DNA devices, syringes, medical stoppers, hearing aids, clamps, scalpels, endoscopy video systems, ECG and neurology electrodes, anesthesia pumps, infusion pumps, infant respiration monitors, catheters, and diagnostic kits. Contract manufacturer (CM) Inzign specializes in disposable plastic medical devices for biomedical customers. It is staffed with a team of professionals with knowledge in process validation for FDA cGMP-compliant 21 CFR, Part 820. The company’s manufacturing facilities include three Class 100,000 clean rooms and one Class 10,000 clean room, located in Singapore and Indonesia. The clean rooms are ISO 9001:2000 and ISO 13485:2003 certified. Inzign’s business model marries a focus on process efficiency found in U.S. plastics molders with a turnkey one-stop-shop business model found in the EMS industry. One project, which involves manufacturing a breath-activated inhaler, encompasses product development support, molding, developing an automated mechanical assembly process, and shipping to end customers throughout Europe.
According to Phua Swee Hoe, Inzign’s managing director, the company is recognized as a business partner because their customers acknowledge capabilities in providing innovative leadership and processes to all projects. For example, process engineers conduct detailed reports on mold-flow analysis to ensure process optimization and efficient management of the overall project. Hoe believes that Inzign’s out-of-the-box approach to projects has resulted in positive benefits gained by their business partners. Documentation support is also critical in the bio-medical industry; Inzign is cGMP-compliant and has aligned internal processes and supply-base management practices to support the traceability and record keeping required.
The medical industry values total quality deliverables, and isn’t willing to trade this type of support for a low unit price. According to Clement Ng, marketing director, the industry wants the same level of compliance with regulatory requirements that they have in higher-cost regions. Delivering this in a market with a competitive edge is another reason that Singapore has seen continuous growth in its medical manufacturing base.
REFERENCES
- Singapore’s Economic Development Board: www.biomed-singapore.com.
- Adapted from the Biomedical Singapore website, with permission from the Singapore Economic Development Board.
Lester Lu is assigned to the Electronics and Precision Engineering Division, International Enterprise (IE) Singapore. IE Singapore is an agency under Singapore’s Ministry of Trade and Industry tasked to promote the overseas growth of Singapore-based enterprises and international trade. For more information on IE Singapore, e-mail newyork@iesingapore.gov.sg; www.iesingapore.com.