Gary Fairhead, president and CEO of full-service EMS provider SigmaTron International Inc., discussed medical electronics manufacturing with Medical Product Outsourcing earlier this year. Here is his extended interview.
 
Michael Barbella: What trends are you seeing in the medtech EMS space? Have these trends changed much in recent years?
Gary Fairhead: The number of handheld devices is increasing in clinical settings. This drives many of the same technical challenges found in the consumer marketplace with a different set of business challenges. In many cases, these products do not have the volumes found in handheld consumer devices and are more highly regulated than consumer products. We find ourselves in a good position because the volumes fit our business model. Our engineering team and production equipment has been supporting smaller footprint devices for several years.
 
Barbella: It is becoming increasingly important for patients to be able to connect their medical devices to consumer devices they like most (iPhones, iPods, iPads, etc.). How is this impacting the design of electronic medical components? Can you provide a specific example(s)?
Fairhead: From a contract manufacturing perspective, this trend does not impact our manufacturing activities. The two areas where it does drive a need for expertise are design and test. Our in-house design engineering team and our west coast strategic design partner both have strong expertise in designing products that incorporate wifi, Bluetooth or near field communications (NFC) capabilities. Our test team is also experienced in communication-related test. We believe this trend will continue.
 
Barbella: What specific areas are customers experiencing some challenges with? What internal systems and processes do you use to address these issues?
Fairhead: We are seeing more customers focus on a strategic approach to regional outsourcing. For example, some of our customers are starting to split production among our U.S. facilities for proximity to their operations or migrate margin sensitive product to our Mexican or China facilities. We already have ISO 13485 registered facilities in the U.S. and Mexico. The medical sector interest in China has increased enough that we are in the process of adding ISO13485 certification in that facility this year. Depending on the interest in domestic build for the China medical market we may also pursue China FDA registration, as a majority of our current China customers in other industries are utilizing a “build in China to sell in China” business model.
 
Barbella: Is it necessary nowadays for contract manufacturers to have some design understanding of specific issues that can affect electronics communication? Why is this important?
Fairhead: Close linkage between the design team and the production team drives better quality and lower costs almost universally. Poor component layout choices can create electrical interference in communications-related products. The test process may also have greater complexity. Our design for manufacturability and test analysis process can help identify the obvious issues up front. However, it also helps to have engineers on staff knowledgeable enough to be a bridge between production and the product design team if a trend in test or field failures indicates there is an unanticipated communications interference issue.
 
Barbella: How has the ability to monitor contractors in real-time evolved? Why is this important?
Fairhead: At SigmaTron International, we use a mix of proprietary and third party systems to give customers real-time visibility in production and material status, plus the quality and traceability data relevant to good device history recordkeeping. In many cases, our medical customers are manufacturing a portion of the product. This visibility into our systems helps them better schedule their production floor and stay as Lean as possible in inventories. It also supports quick “what if” analysis if there is a radical shift in demand.
 
Barbella: Does your contractor have the ability to give you access to production status, quality and/or traceability data? If so, do you find these types of shared systems helpful? 
Fairhead: Another area we have found many of our customers looking at closely is Conflict Mineral-related data collection. Several years ago we established a Green Compliance Service Center in Asia to collect the supply chain data required by this and other regulations such as RoHS. We can also collect custom supplier data if a customer is tracking specific information as part of their product documentation requirements.
 
Barbella: What kinds of opportunities exist for EMS companies in the medical device connectivity/mobile health sector? 
Fairhead: There is a huge amount of opportunity in the medical device connectivity and mobile health sector, and much of it comes from new companies finding new ways to adapt technology into products. In this environment of innovation, our challenge is figuring out which of these new products are sustainable and a good fit for our company long term.