In mini-sim, we had to choose number of alternative vendors. Although it decreases the risk, it also increases cost and time. So, choosing the number of alternative vendors is complicated. Therefore, how can we choose a number of alternative vendors?
The decision on the number of alternative vendors likely uses the same criteria used for solicitation planning. The evaluation criteria of price, understanding of need by seller, overall/life cycle cost, technical capability, management approach, and financial capacity was likely used. These factors would be taken into account as the alternative vendors are still project resources. There are likely meetings to determine whether additional budget is needed or the initial budget is a form constraint. There is also a matter of whether the specifications can be expanded to fit the alternatives as shown in the mini simulation this week.
There is also the matter of long term effect of choosing one vs multiple vendors. If there is a need to change the DSD anyways and alter the project timeline, then the drawbacks (design changes, time) of adding another vendor is reduced. Longer time, having multiple vendors vs just two vendors decreases risk of backorder and issues with procurement.
In this week's Mini-Simulation, I decided to opt for multiple backup vendors for the catheter coating material, despite the added time and cost implications of validating and verifying each vendor's product. My decision was primarily driven by the need to ensure a consistent supply chain and to mitigate risks associated with relying on a single source. Having multiple vendors can be a safeguard against potential disruptions, such as material shortages or vendor-specific issues, which could jeopardize the whole project. The initial increase in cost and time seemed a worthwhile investment to protect the project's long-term viability and maintain quality standards across the board. This approach also aligns with a broader strategy of risk management and sustainability in supply chain logistics.
Diversifying the alternative vendors for a medical device increases supply chain management complexity which in turn increases oversight costs. If the number of alternative vendors is too small, it also increases a company’s risk of supply chain disruptions. Careful alleviation is needed to ensure there is a balance.
Another thing to consider is the level of relevance a specific component has. Components with lower relevance require less attention, while more relevant components such as electronic components or materials used in implants can pose unique challenges. If a component has high relevance, it might be useful to have other vendors as there could always be disasters waiting to happen with the primary one.
While some vendors might be more reliable than others and able to deliver on time, some lack the ability to produce high quality products. Other vendors might be more expensive but offer the quality assurance that most companies require.
It would be wise for a company to construct stronger relationships with a few vendors that they can depend on. How do you believe a not-so-flexible supply chain coupled with high management overhead should be structured?
One factor to take into consideration would be the risk associated with losing your only supplier. If you opt to more suppliers, you reduce the risk associated with procurement, but increase the risk of effectiveness complaints. Therefore, having fewer suppliers who provide coatings that match the DSD would likely reduce device complaints, but increase the risk of procurement shortages.
When deciding the number of alternative vendors in project management for medical devices, several critical factors must be considered. First, regulatory compliance is essential—vendors must meet FDA or international standards like ISO 13485. Second, the complexity of the device can dictate the need for specialized suppliers, requiring a broader vendor pool. Third, risk management encourages having backups in case a primary vendor fails to deliver. Fourth, supply chain stability and geographical diversity are vital to reduce risks from disruptions. Fifth, cost-effectiveness must be balanced against quality and reliability. Sixth, past performance and reputation of vendors can influence whether fewer or more are needed. Seventh, project timeline and urgency may limit the ability to vet multiple vendors thoroughly. Eighth, technical compatibility and integration with existing systems or components is a key factor. Lastly, strategic partnerships or long-term collaboration goals may lead to choosing fewer, more reliable vendors rather than many.
I feel the biggest factor in deciding a number of vendors is a projects risk tolerance. In the case of medical devices, such as in the minisim, the tolerance is very low. There is very little room for errors and delays, meaning there needs to be at least one alternate vendor. In the case of the mini sim, we even went back to the DSD and had to expand and possibly delay the project. We unfortunately had to go back to change the tolerances for the coatings and even possibly the material based on the number of vendors selected. This was all because the project had very little risk tolerance. Beyond this, it is important to consider regulatory guidelines and conduct thorough cost-benefit analyses to determine if the number of vendors is appropriate.
