BBI Contributing Writer

ANAHEIM, California Just under 35,000 attendees at the Medical Design and Manufacturing West (MD&M West) exhibition, held here early this year, toured more than 1,900 exhibits. Medical device manufacturing companies sent executives, engineers and marketers to review new, different and sometimes unusual products and services.

MD&M West's 2004 conference program offered a number of subjects of distinct value to medical device marketers, quality assurance managers and product development managers from FDA issues to medical package design to "Accelerating the Product Development Cycle for Innovative Devices." One portion of the latter was presented by Sandra Draper, manager with Pittiglio Rabin Todd & McGrath (PRTM; Mountain View, California) management consultants, who addressed increasing product development productivity through portfolio management.

Draper defined portfolio management for product development teams as the process of selecting and prioritizing which products to develop and when. This is a particularly complex problem in larger firms and may mean life or death for small and start-up device manufacturers, she said. She likened product development prioritization to an investment portfolio. Each possible product is an investment and needs to be examined in light of all the others in the portfolio. Some products may get the necessary investment of time and talent. For others, it may be time to cut your losses and quit investing. Draper outlined a strategic point of view in these resource allocation decisions a portfolio management methodology for selecting and prioritizing development projects.

Why worry about portfolio management? Poor portfolio management often leads to visible, chronic business issues. Without a cohesive planning process the company can be sucked into a predominance of short-term, reactive projects, Draper said. Resource overload and skill-set shortages will sap employees' energies. Project slippage and delayed product launches lead to strategic priority gaps and missed revenue targets.

Product development portfolio management decisions cut across managerial responsibilities, threatening power and control. A set of agreed-upon standards to estimate the value of projects is needed, Draper said. Simple risk-reward analyses are inadequate because there are complex road map interdependencies. Expending the time and effort to bring the necessary data and analysis together for good decisions is an investment that reaps substantial returns, she said.

Portfolio management is an ongoing process for translating product strategy into specific priorities and balancing overall demand for resources against capacity. Draper suggests considering all product development ideas on the basis of the project's attractiveness, the business impact of the product and the balance of the portfolio. Managers should strive for a balanced portfolio, she said, reminding them to look at all the products under evaluation, considering the served market for each. Some investment is needed to sustain current products; some to complete proposed products; and some funds and time need to be invested in discovery of even newer possible products. All opportunities can be grouped into market segment "buckets," with objectives for each bucket based on the company's business strategy. Then resources can be logically allocated to each bucket.

Project evaluation should be done no less than quarterly, she said, with decisions made on which projects are and are not approved to start. Draper said successful portfolio management processes exhibit seven attributes: accountable portfolio decision-makers; a decision process cycle linked to projects and business planning; robust strategic inputs; relevant portfolio boundaries and strategic buckets; well-defined ranking criteria; timely, complete and accurate portfolio information and analysis; and a prioritization approach that leads to clear choices.

Among the MD&M exhibitors seeking to serve medical device manufacturers, there was something for everyone engineers, financial managers and chief executive officers.

Industrial advances in recent years have been characterized by a growing dependence on computer-aided engineering (CAE). CAE software is used to address a wide range of engineering concerns, from the stresses on solids to the complex behavior of fluids. Fluids are more difficult to simulate than solids, but because they are fundamental to so many processes from the extrusion of dough during food manufacturing to the gaseous mixtures used in the deposition of silicon wafers they are a critical component of most engineering analyses today. To meet the vast fluid flow modeling needs of a medical device manufacturer, computational fluid dynamics has experienced rapid growth within the CAE market. Fluent (Lebanon, New Hampshire) has been at the forefront of this developing technology.

Flow and thermal analysis software and services available from Fluent provide its customers a significant competitive advantage by dramatically improving their engineering designs and design processes. According to Bernard Masse, of Hydro-Quebec Institute of Research in Canada, "Computer simulation helped us make design changes that will generate revenue gains of up to C$5 million in 12 hydropower turbines. Shifting maximum efficiency points, raising power outputs and raising the weighted efficiency of the turbine by 1.6% will produce revenue gains of between C$200,000 to C$500,000 per year for each turbine." Manufacturers of medical devices such as abdominal aortic grafts and endografts might similarly benefit from such simulations.

Long-distance fees, local toll charges and Internet access are big pieces of a company's budget. Recognizing this, MultiTech Systems (Mounds View, Minnesota) believes success is about communication and its objective is to make that communication easier and less expensive. With innovative telephone, Internet access, remote access and embedded solutions, MultiTech is creating a world where, as they say, "Technically, everything is possible."

As an example, Thomas, Thomas and Walsh (Atlanta, Georgia) is a hospital financial service agency that specializes in Medicaid eligibility. Its main office is in Atlanta and it has five other fully staffed Georgia offices to provide local service to their clients. As the company grew, top management soon realized they had some significant increases in their telecommunications and data systems expenses between offices. Using MultiVOIP systems from MultiTech, the agency was able to completely eliminate its recurring long-distance phone and fax charges because voice calls were riding "free" over its data network. In addition to the dollar savings, the company also improved communication between offices. "There is no longer any hesitation to make an inter-office phone call due to the long-distance expense," says William Moise, vice president of Thomas, Thomas and Walsh. In addition to the dollar savings, communication between offices also was improved. "Information between offices now flows much more freely," Moise said.

Many successful medical device executives concentrate on their companies' key competencies while outsourcing the rest. Product development, marketing, business development any and all of these can be outsourced. Flex Partners (Encinitas, California) is a medical device design and development company serving established companies as well as start-ups. The company provides more than 150 years of engineering design, marketing and business development experience with state-of-the-art equipment, fabrication expertise and creativity to bring a medical device product idea from concept through commercialization. Flex's range of services comprise both conventional and non-traditional means of design, fabrication and financing options to meet specific client requirements. Companies look to Flex Partners as a trusted outsourcing partner or as their personal virtual engineering department. Core competencies include product design, engineering analysis, product prototyping, simulations, product testing, intellectual property development, validation, verification, manufacturing support, program management and business development.

Cyto Pulse Sciences (Hanover, Maryland) works with Flex Partners. Its expertise is in electric, field-based medical device therapeutic delivery systems. Richard Walters, chief executive officer of Cyto Pulse, said the company did not have the time to bring the expertise on board to work significant mechanical engineering issues driven by a large National Institutes of Health (Bethesda, Maryland) project. Flex provided the needed expertise.

Working with a firm such as Flex can allow a device manufacturer to maintain state-of-the-art resources and technology without bearing the burden of brick and mortar ownership. Similarly, the costs of recruiting, managing and retaining employees can be reduced. A virtual engineering department such as that provided by Flex assures products come to market on time and on budget.

MD&M West was produced by Canon Communications (Los Angeles, California), a communications company specializing in publications and trade shows for professionals in the medical device, microelectronics, plastics processing, packaging and general design engineering fields. In addition to 16 trade magazines and 18 national and international trade shows, Canon Communications produces industry directories, provides medical device engineering and design awards and develops Internet sites.