Tuesday, February 21, 2012

'Insourcing' Already Standard Practice in the Medical Device Industry

Last Wednesday, President Obama urged manufacturers back to U.S., saying that companies should engage in 'insourcing' rather than 'outsourcing.' At a Master Lock plant in Milwaukee (the company brought 100 jobs back to the US from overseas), the President urged business leaders in an appeal to patriotism to bring jobs back to our shores.

"Ask what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed,"

One industry that got the message long ago is the medical device industry. The industry requires precise specifications and reliable materials and strict quality controls (with high stakes PR consequences for failure) argue for less distance between branded manufacturer and contract manufacturer. Although low-level (Class I) devices are often made abroad, and parts of key devices are, the device industry has a lower outsourcing rate in general than most industries and where outsourcing occurs, it is very often American outsourcing and not "offshoring."

As reported in Kalorama Information's Contract Manufacturing in Medical Devices; The World Market The US is still the largest market for the manufacturing of medical devices, more than half of the market is within the United States. Although Europe and emerging nations will reduce this in the next few years, we still anticipate that the same will be true in 2015.