The buzzword in business used to be vertical integration , in which a single company carried out all its major operations internally. These days, as competition and the pressure to cut costs increase, companies have reversed that trend. Now the word is outsourcing , in which businesses contract with outside suppliers to carry out a variety of functions that used to be fulfilled from within. Companies realize that with downsizing they can't be all things to all people. Every function, from concept and feasibility study through manufacturing, warehousing and distribution, marketing, and even postsale service, can be outsourced.
Outside companies can also help with regulatory issues and patent applications.
Contract service providers may be asked to take on part of a project or all of it, to build one part of a device or the whole thing. Several factors contribute to the trend toward outsourcing. A device company can gain a competitive advantage by offering a comprehensive range of products, including some that are outsourced because they are peripheral to its core competency. Outsourcing also helps small, start-up companies save money. For Royce Johnson, former manager of advanced development with Ohmeda Medical Devices Div.