Interesting item today from Frost & Sullivan, the research firm, which asserts medical OEMs are primed to begin outsourcing to EMS providers.
Frost pegs the North American electronics medical device market at $3.79 billion in 2006 and estimates it will rise to $8.09 billion in 2013. This tends to be a higher margin, lower volume segment, ideal for onshore EMS companies. However, because of the certifications and liabilities that come with building for Class 2 medical and Class 3 equipment, many OEMs are understandably nervous about putting their fates in the hands of their suppliers.
Currently, medical makes up roughly 3% of the worldwide EMS market. Frost, to its credit, points out the daunting hurdle: “While the future for EMS providers appears highly promising, stringent guidelines implemented by the Food & Drug Administration (FDA) pose a barrier to entering the medical device market. Adhering to FDA regulations and others such as ISO 13485 has become critical since medical OEMs often select EMS providers for their outsourcing needs based on their compliance with current regulatory standards.”
I’m always leery of forecasts of revolutions. But a 113% or so rise in revenues in an as-yet tiny market spread over seven years sounds like the right prognosis.
There is a rapid growth of Outsorcing these days as manufactures try to cut cost and maximize profit.”‘.