Applying Forensic Cost Analysis Methods To Medical Devices
Forensic cost-analysis methods have already gained traction in the automotive industry to determine an accurate cost of components and assemblies based on realistic labor and materials costs, as well as the physics of manufacturing processes. What you might not know is that the lessons learned from automotive costing easily transfer to medical products, devices and equipment. Unlike traditional cost analysis methods, which rely on historical cost data and estimates about manufacturing inputs, the forensic cost analysis approach is based primarily on the physics of all the manufacturing and assembly processes needed to produce a finished device.
As an example, we can derive the cost of molding a plastic component from its given polymer, projected area, wall thickness and other attributes. Due to its high level of detail, we can base our analysis on specific molding machines that produce the parts at a specific cycle time. When armed with high-resolution costing data, manufacturers and consumers alike can make informed decisions about their products.
To illustrate what forensic cost analysis looks like for high-volume, mass-produced medical devices, we recently tore down two medical products: a pulse oximeter and TCL5007 electrocardiogram (ECG). For each product, we analyzed the mechanical and electrical components to determine their true cost.
