| Characteristics of Part groups |
Manufacturing Process |
Typical Parts (excl. Electronics) |
Global Sourcing Strategy |
% of $ Materials(exclude Electric)2 |
Potential3 Savings % |
Fit with China, India |
| Simple parts that have high-labor content |
Manual Assemble and Inspection, Sewing, Silk Printing |
Carrying pouch (medicine pump) Surgical gowns and masks |
Go to country with sustainable low labor cost |
10 - 20% |
60 - 80% |
yes, more in favor of India |
| Average parts (with equal weight to labor, capital, materials) |
Injection Molding, Sanitization, Clean room operations |
Single-use disposable plastic parts, Sterile cases |
Decide part by part - using total cost of global sources |
20 - 25% |
40 - 50% |
yes, more in favor of China |
| Technically sophisticated parts w/high labor content |
Precision Machining and Grinding operations |
Finished and semi-finished Components for Hand Pieces |
Invest in skills of supplier with low labor costs |
10 - 15% |
30 - 50% |
yes, somewhat in favor of India |
| Technically sophisticated parts w/ low labor content |
Precision Stamping, Etching, Polishing and Heat-treating |
Burrs, Blades, Surgical needles |
Stay with on-shore or near-shore suppliers |
15 - 20% |
20 - 30% |
yes, more in favor of China |
| Cost driven predominately by raw material cost |
Investment Casting, Forging, Specialty Coating, Packaging |
Surgical implements, precious metal (Ti, Platinum…), Orthopedic brace |
Go to supplier with sustainable low material costs |
20 - 30% |
10 - 15% |
not |
| Parts difficult to ship due to bulk or fragility |
Sheet Metal Fabrications, Pressure Die and Investment Castings |
Sheet metal boxes, CT Scan Machine frames, bed frames |
Stay with suppliers closest to home, but trim supply base |
5 - 10% |
0 - 10% |
not |
