Steps to implementing a medical device ERP that will allow you to stay regulation-compliant
The medical device industry represents one of the fastest growing manufacturing sectors in the United States. In fact, Espicom Business Intelligence projects the US market will maintain a compound annual growth rate of 5.3% for 2014-2019, leading to annual revenues of $173.3 billion by 2019.
Manufacturers will find that many general enterprise resource planning (ERP) best practices also apply to the medical device industry. However, several national initiatives focused on device cost, availability, the patient’s treatment experience, and tracking of long-term outcomes present unique challenges for device manufacturers implementing ERP systems.
Following are five issues that medical device manufacturers will need to address with their ERP systems if they are to thrive in this rapidly expanding, but highly regulated industry.
1. A strong device history record is key
Many industry executives and entrepreneurs are medical practitioners or engineers focused on patient outcomes, not manufacturability or costs. Therefore, manufacturers developing new devices need strong recordkeeping via a device history record (DHR) that demonstrates a sound technical concept, patient benefit, attention to cost of materials and production, and long-term results. Building a DHR that ensures a successful design and FDA compliance, requires an ERP system that incorporates document management, engineering bill of materials (BOM), planned process routing, cost estimating, and failure modes and effects analysis (FMEA).
2. A single ERP database ensures consistency and efficiency
The FDA is working with the Centers for Medicare and Medicaid Services (CMS) to enable the concurrent review of device designers’ applications to shorten the development, application, field test, FDA and payment approval processes. Mistakes and misunderstandings due to disparate software tools can cause costly delays in time to market. So it is more important than ever to assure that business processes are efficient and built on a common database managed by the ERP system.
Recommended reading: find a medical ERP to suit your needs with our completely up-to-date ERP vendor directory.
3. Project insight and time-to-market can make or break a medical startup
According to the US Department of Commerce, more than 80% of medical device companies have fewer than 50 employees, and many of these businesses, particularly start-ups, have little or no sales revenue for years since development and approval timeframes can run a decade or longer. At the same time, entrepreneurs’ funding sources are tightening as capital shifts to lower risk industries.
Therefore, a capable ERP system with integrated engineering, purchasing, accounting and project management is critical for medical device firms. This provides the needed visibility into overall financials, R&D costs, project milestones, and status of agency filings to manage the “burn rate” of funding and assure investors that risk is being minimized. Additionally, integration between a computer-aided design (CAD) platform and the ERP system’s engineering records can accelerate design and development work while minimizing the risk of errors in key product data.
4. There is virtually no tolerance for errors
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