I

N

S

I

G

H

T

A visit to Hong Kong, China and Taipei - Medical Device Factories

This October we made a trip to the Orient to visit some medical device manufacturing facilities in order that we might provide guidance on FDA compliance both to the QSR and 510(k) issues. The trip was very enlightening especially the visit to Shenzhen, China.

If you have never visited the Orient, let me tell you it is a long trip. We left Newark airport via Continental Airlines' new 777, business class first service at around 11AM on Friday morning not arriving to Narita airport, Tokyo until Saturday afternoon, 14 hours later. That is a loooonnnnng trip. By the way the Continental Business First service is just that, Business Class service in the front of the plane. It is comfortable and very accommodating but it is not First Class. However the price is a lot more reasonable.

After a two hour lay over, we headed on to Hong Kong which is a wondrous city. The new Hong Kong airport is beautiful and the train to downtown Kowloon or Hong Kong is right outside the front door. It was very convenient, comfortable, inexpensive and the ride is not too long. We had to take a cab to your hotel once you reached Kowloon or Hong Kong. Total time from home to hotel was 30 hours.

If you go to Hong Kong remember to take some extra time to visit the city. Though, it is mostly shopping and more shopping, the harbor is great to walk along and the nighttime sky lights are one of the most beautiful in the world. A view from the Peak Tram is worth the trip, though we would recommend eating somewhere else. We did have a great breakfast Dim Sum in the New World Center restaurant.

We left Hong Kong for Shenzhen via the Through Train as it is called. If you are not familiar with Hong Kong and China, even though Hong Kong is part of China, you don't need a Visa to get into Hong Kong but you do require one to go into China. This is a real pain in the butt. From Hong Kong we took a train, that reminded me of the subway, to Shenzhen. Once off the train, we went through immigration to leave Hong Kong. We walked over a bridge that crossed a little river. On both sides of the river were 10-foot fences with heavy barbed wire on the top which leads one to wonder if Hong Kong and China are really one country. Once inside China we waited on another line to go through China immigration and Customs.

Shenzhen is a business city that set up for maintaining business near Hong Kong and making it easy to ship product through Hong Kong and out to the rest of the world. The manufacturing operations we were there to visit were owned by Taiwan businesses. This is how most of the businesses in China get started. They are built by foreign companies who are attracted by the low cost of labor and the breaks they get from the Chinese government to build their businesses there.

We stayed in the Shangri La Hotel. It was a magnificent business hotel.

The plant we went to was approximately 30 kilometers from our hotel, about a one hour drive away. On the highways are many people riding motorcycles, mopeds and even bicycles carrying heavy loads - quite something to see. Having visited China several times in the past there is one thing that always remains the same - the never ending supply of dust. At night it appears that you are traveling through a fog of perpetual dust.

The campus we visited was in a new development. There was a guard gate at the entrance and we drove into a large outer yard. This facility had over 1000 employees. We were told that if you wanted to build a plant in Shenzhen you had to make sure that you supplied housing for the employees. These employees would travel from other parts of China to get work here. They would not be able to find nor afford living facilities. This appeared to be true.

All 1,000 employees were given a bed, work clothes, meals and shower facilities as well as washing machines for their clothes although the company would make the employees pay for their use of electricity. The workers were housed in a dormitory that was six stories high. The assembly line workers, whether men or women, were housed in long rooms approximately 12 feet wide by 30 feet. There were 12 bunk beds in each room. Each occupant would put a sheet around his or her bed for privacy. All the people in the room shared in the cost of the electricity.

The supervisory staff had a smaller room with only two to four bunk beds. A family could get a 12'x12' room with two beds, but no running water. Water was supplied in the rooms at the end of the buildings, where workers could shower, wash clothes and go to the bathroom. The cafeteria was a large mess hall where three meals a day were served. This was something to see.

The staff, mostly made up of young single women, age 18-20 years, would come to Shenzhen to get a job for a few years and then return to their town to get married. The job would provide them a good amount of money. The starting salary was 600 Chinese dollars or approximately $3.00/day. They were also allowed to work overtime each day and Saturday.

The manufacturing facilities, molding operations and assembly lines were in relatively good condition. These operations had achieved ISO9001 certification and the documentation was quite extensive. It was amazing to see these young women put together these small PC boards, stuffing the boards and soldering wires entirely by hand.

The quality control inspections were very comprehensive though they did run into trouble just like US operations when there was an increase in orders and new people had to be put on the production lines.

Concerning GMP compliance, the areas that we observed most often in foreign manufacturing operations, which are not really keyed into during ISO certification audits are:

Process Validation concerns especially of the Wave Soldering machine
Electro Static Discharge (ESD) control for PC boards with EPROM's in storage area and on the assembly lines.

As with any electronic manufacturing house, there were other problems concerning documentation control, status of assemblies and calibration control. But, for the most part the observations in these areas were minimal.

Other areas of concern include those that the FDA is keying in on with their new inspectional policy, the QSIT:

In management review areas, the fact that a management representative had not been formally appointed and nor his/her responsibilities fully defined.
In the design control area, for each project there was no indication who would be the independent reviewer for each phase approval.

Though, there a multitude of records are kept, they do have a hard time with the actual analysis of the trend data.

One observation about their Design Control, was well documented and thorough for each device.

We spent only two days in Shenzhen and then we headed back to Hong Kong. Again, we passed through immigration in China, over the bridge to Hong Kong, then through their immigration and finally their customs. If caught at the wrong time this could be a very long process.

The next day we headed to Taiwan. We took Cathay Pacific to Taipei. It was a very good airline. I would highly recommend it, the service was excellent.

Taipei is a very interesting place to visit especially if you like Chinese food. The food is great. Taipei is like a little New York except there are many more Chinese people living there. (a little joke) The business hotels are excellent and the Chinese people are very gracious hosts. The companies we worked with were always punctual and did what they could to entertain us including lavish dinners every evening.

The office of one of our clients was in a new part of the city in what was called the Silicon Valley of Taipei. The offices were very modern but space was very tight.

While we were involved in a training session for the staff, there was an earthquake that seemed to go on forever even though it only lasted for about 30 seconds. All the locals just sat there and looked at our scared expressions on our faces and said, "Oh that was just an earthquake," and they asked us to proceed with the seminar. That quake was centered about 200 miles south of Taipei and it was over a 6.0 on the Richter scale, but in Taipei was about a 2.0. That was enough a quake for us.

We used the time spent at these offices to cover the design control procedures and the strategic planning of new devices they hoped to develop in the coming year. It has been our experience, over the years, working with many companies overseas, that the only way to really get a handle on what would be necessary to get FDA clearance for their new devices, is to sit down with the R&D staff and go through each project one by one. This is the only way to come up with a plan capable of addressing the FDA concerns. Trying to accomplish this by email, fax or phone is just not possible. You have to be able to see each other's eyes and facial expressions to determine if the strategy, ideas and concepts are really being understood. As with any good consultant, working in the "gray" area is when your value is most important to a company. But, trying to get someone to understand how these strategies can be implemented is sometimes very difficult especially if you try to do it long distance. The FDA regulations are never so clear cut that they can just be applied in a straightforward fashion . Yet charging ahead with the wrong plan could cause undue delays, lost sales and of course money. This type of advanced annual planning must be made part of any company's strategic plan for design control.

Taipei doesn't have much in the way of sight-seeing but we did go to an area in the northeast that was had some parks with a long and tedious mountain climb. This area was called Geo Feng in Taipei County. This area is known for it's desserts. We also had the time to visit BaDowGi Park in which had spectacular vistas of the town of Keelung also in Taipei County.

Our visit was finished and we headed home. Luckily we had been able to keep up with happenings on the home front by email. What an invention! Reviewing documents, getting out proposals or just communicating with clients while on the other side of the world is now a breeze, and no one is the wiser.

The trip home was a little bit shorter with the tail winds, only 11 1/2 hours instead of the 14 hours. Good books were a must.

The Pacific Rim is still the place for future growth. It is very interesting and worthwhile to visit and don't forget to bring your appetite.

Next Month’s Insight Report –

The next Insight Report Vol. 2 #12

Year End in Review.

If you have any comments on these INSIGHTS we hope that you let us hear them. If you have any of your own INSIGHTS that you feel would be of value to other companies, we would be pleased to hear from you and to discuss them with you and if you allow, we would even put them up on this site for others to learn from.
e-mail INSIGHT