Auto Industry Suppliers Eye Medical Device Marketplace

As the U.S. automotive industry struggles to get back on its feet, automotive industry suppliers are finding new markets for their manufacturing skills. The burgeoning medical device field is one industry ideally suited to support that industry. Precision machining, automation, expertise in mechanical and electronic systems integration, and a well established supply chain are all key elements that could feed into one of the nation’s growth industries.

“In 2008, the health care spending in the United States represented 17 percent of GDP,” says J. Scot Sharland, executive director of the Automotive Industry Action Group (AIAG). “Demand for health care continues to rise unabated, driven by an aging and largely unhealthy population—the baby boomers—and is forecasted to reach 20 percent of GDP by 2017. In short, it’s a growth market and we are seeing a steady transfer of technology from industry into health care settings—lasers, robots, RFID, etc.”

Earlier this year, the state of Michigan publicized a program to help manufacturers especially auto suppliers—diversify into new emerging manufacturing market sectors. To aid its members in making this type of transition, AIAG developed a medical device manufacturing curriculum that introduces manufacturers to ISO 13485, a quality management system (QMS) standard for organizations producing medical devices and related services. Because auto suppliers are most likely already registered to the automotive QMS, ISO/TS 16949, adding an ISO 13485 certificate shouldn’t be that big a leap.

“While there are clearly different requirements, the fundamentals are essentially the same, namely, can you demonstrate command and control of your processes,” Sharland explains.

A bigger issue is the medical device industry’s greater emphasis on reliability and risk management throughout the entire product life cycle and corresponding documentation. “It’s akin to APQP on steroids,” says Sharland.

So, in addition to training on ISO 13485, the AIAG curriculum introduces quality core tools such as advanced product quality planning (APQP), failure mode and effects analysis (FMEA), measurement systems analysis (MSA), and statistical process control (SPC); along with other quality methodologies such as problem solving and error proofing. The curriculum also covers important supply chain regulatory requirements for manufacturers.

Standards and quality tools aside, are suppliers, used to working in a high-volume, relatively dirty industry prepared to enter the medical device manufacturing where the volumes are much lower and sterility issues are a key concern?

“Keep in mind that current automotive suppliers of sensors, electronic modules and devices, air bag components etc. have very robust engineering and product development capabilities, state-of-the-art manufacturing operations and, typically, quality performance at or near single digits in terms of defective PPM,” Sharland points out. “Once the requirements are defined, the transition would be pretty straight forward via investment in new plant and equipment or through acquisition.”

Sharland won’t speculate on what kind of effect diversification into the medical device market will have on the job market. Detroit is currently experiencing 17 percent unemployment, but he does point out that the state and federal government are providing significant funding to accelerate biomedical research and innovative technology development targeting medical applications.

“Auto suppliers are ideally positioned to capitalize on a transition into a high growth manufacturing area such as medical devices because they have manufacturing and quality improvement know-how” Sharland explains. “Diversifying and taking tested and proven quality tools and methodologies into a vertical industry will help these organizations strengthen their company balance sheet and keep people working.”

About The Author

Dirk Dusharme

Dirk Dusharme is Quality Digest’s editor in chief.