Fully Outsourced Model, Increased Automation Streamline Test Kit Production | Life Sciences

2/20/2025

RRD's comprehensive supply chain support drives efficiency and compliance for leading diagnostic company

CHALLENGE

A leading diagnostic test kit company and renowned supplier of at-home pregnancy and fertility tests faced inefficiencies in bringing their premium products to market. Previously, the company produced test kits in-house at a U.S. facility. To reduce costs and repurpose fixed overheads, they sought to transition to a fully outsourced production model.

The tests, classified as Class II medical devices, required strict regulatory compliance governed by multiple entities, adding complexity. As an asset-light organization aiming to minimize costs across facilities, labor, equipment, and inventory, the company needed an experienced partner capable of managing all aspects of test kit production and fulfillment. Key requirements for the partnership included:

• Regulatory expertise: Ensuring FDA compliance and product validation across all processes.
• Operational efficiency: Building an automated, high-output production model with minimal disruption.
• End-to-end supply chain support: Managing procurement, production, packaging, logistics, and distribution across multiple product lines and store-brand offerings.

SOLUTION

The company turned to RRD’s Supply Chain Solutions team for a comprehensive, fully outsourced production model tailored to meet their unique requirements. RRD implemented transformative changes across their supply chain and production processes, including:

• Manufacturing transition: RRD transferred six existing production lines from the client's North American facility while simultaneously designing and building an additional fully automated line in China to support kitting operations at RRD's facility in Mexico.
• Advanced production facilities: Production was centralized at RRD's ISO 13485-accredited, FDA-registered maquiladora facility in San Jeronimo, Mexico. The facility specializes in high-volume test kit production and offers competitive labor costs while managing all freight and customs protocols.
• Packaging and pre-media support: All print and retail packaging, including IFUs, retail cartons, labels, and consumables, was resourced to RRD’s platform in Reynosa and other facilities. RRD also managed all pre-media activities, ensuring client designs were finalized for market and production readiness.
• Brand and store-brand support: The program supports both the client’s branded products and a large number of store-brand offerings sold through retailers.
• Supply chain management: RRD oversaw comprehensive supply chain operations, including warehousing, planning, procurement, customs clearance, and logistics for both inbound and outbound shipments.
• Validation and compliance: RRD provided product and process validation, ensuring compliance with FDA, SMETA, and UL requirements.
• Account management and KPIs: RRD’s account management model delivered operational, quality, and commercial KPIs, working seamlessly with the client’s team to provide exceptional service and ongoing program enhancements.

RESULTS

RRD's fully outsourced production model has delivered significant results, enabling the diagnostic test kit company to streamline operations, reduce costs, and maintain exceptional product quality and accuracy. Key outcomes include:

• Increased output: The manufacturing model supports the production of up to 50 million test kits annually, meeting demand for branded and store-brand products.
• Enhanced automation: Improvements included the introduction of a fully automated line from China and achieving 85% automation overall, significantly boosting efficiency and cutting production costs.
• Sustainability and compliance: All facilities meet rigorous FDA, SMETA, and UL standards, supporting regulatory compliance and operational integrity.
• Optimized supply chain: Comprehensive management of warehousing, logistics, and procurement resulted in reduced freight costs and improved delivery times, supported by San Jeronimo’s proximity to the U.S. West Coast.
• Integrated design support: Pre-media and packaging support streamlined the client’s design-to-market process, ensuring retail readiness for multiple product lines.
• Strong partnership: RRD’s collaborative account management model has fostered a seamless working relationship, providing ongoing enhancements to delivery, quality, and cost management.
• Fully outsourced model: This new model has led to a decrease in working capital, resulting in more efficient operations.