Moving production to a lower cost region will not deliver significant cost reduction if the supply chain and logistics activities are not optimized for the new region. As a result, a key consideration in selecting a contract manufacturing partner should be evaluating their ability to support identification of regional suppliers and the best logistics strategy for supporting the end market. For example, Forefront Medical Technology was supplying a customer with infusion lines used in a drug delivery system. The bags used with infusion lines were supplied by two manufacturers in Europe. Forefront’s team suggested to the customer that sourcing the entire set of four bags and infusion lines in Asia with Forefront could eliminate redundant logistics costs, increase visibility into inventory levels, improve quality and reduce production costs. The customer had been pleased with Forefront Medical’s performance on the infusion lines and agreed to the transfer the entire project.
The key challenge was ensuring the transfer of work and subsequent validation process was handled as efficiently as possible, since an inefficient process can eliminate any near-term cost savings. From a transfer perspective, Forefront’s team needed to identify a qualified source of roll form raw material for the bags, transfer and enhance the process to eliminate quality issues that were occurring at the previous suppliers and support process validation and regulatory approvals. Read more