Putting It All Together
Contract Packagers offer OEMs one-stop shopping.
By Stacey L. Bell
Pack It. Ship It. Trust It. This motto of one healthcare packaging company appropriately describes the goal of all packaging suppliers and contractors today: create medical packaging that allows OEMs to ship products safely without fear of damage to the product or compromise sterility.
Like outsourcing in many other sectors of the medical industry, contract packaging has seen solid gains in recent years. Packagers told Medical Product Outsourcing that they expect further growth of between 5-20% in 2004. However, such heady growth means that that OEMs today are demanding more than just packaging capabilities from their suppliers.
In some cases, OEMs are packaging their own products simply by buying materials from suppliers. Most often in-house packaging is performed by manufacturers with a high volume of products requiring simple, consistent packaging. For more complicated, detailed packaging needs, OEMs typically seek outside expertise.
"The capability to handle small to medium batches is becoming more the norm," explained Rick Crane, vice president of new business development and technical marketing for J-Pac in Somersworth, NH. "But you're always competing against an OEM's in-house and offshore capabilities, so it's important to find a way to differentiate yourself from the capabilities and suppliers they already have."
One way to do that is by offering services that appeal to today's time-pressed, budget-conscious medical device manufacturers. Two popular amenities are shortening the supply chain and offering OEMs a one-stop shop.
Crane said OEMs are attracted to any packaging solution that reduces the supply chain-whether that entails a change in packaging format, materials or sterilization. As a result, more contract packagers are taking over their OEM customers' supply chain management, purchasing materials and managing other suppliers. Some OEMs trust their packagers so much that they offer their customer lists and allow the supplier to package, sterilize, test and ship the final products directly to end users.
To further streamline the process, some companies have expanded their own capabilities, offering more services under one roof. "We've been incorporating secondary assembly equipment that allows us to take a part out of the mold and go directly to assembly or lets us put two materials on one part simultaneously," said Brad Davis, marketing manager for Unimark Plastics in Greenville, SC. "By adding family stack molding, high-speed robotics and secondary assembly equipment, today we're producing a fifth-generation product at about half the price of what the original line cost 13 years ago. These new capabilities let us compete with overseas markets."
Some packagers have formed partnerships so they can offer bundled services. Lab testing, packaging, sterilization and machining and hand assembly are just some of the additional services being provided.
Echoing a trend in medical device design, contract packagers and suppliers are also finding ways to limit the number of parts and amount of materials used in their packaging to accommodate OEMs' streamlined budgets while meeting strict criteria for product safety and sterility during storage and transport.
Davis noted that reducing the number of packaging SKUs is a driving force in today's package design; OEMs are trying to put as many products in one package as they can. For example, past practices might have called for three catheters of different gauge sizes to be packaged in three different sleeves. Recent advances in packaging now allow them to be placed in just one. A different color, label or other visual means are used to differentiate the products for end users. Crane said that his company has worked with customers to allow more products to be sterilized at once in EtO and gamma equipment, saving production time and expense.
Michael Scholla, senior consultant for DuPont in Wilmington, DE, noted that there is "an overall trend to down-gauge. Over the course of the last five years, a lot of people have down-gauged films used in their packaging because mettalocene-catalysed polymers deliver strength at lower basis weights."
While packagers are working with OEMs to cut costs, the most effective way to do so is to consider packaging and sterilization needs when a product is in the concept phase, not after it's been manufactured.
"If we're involved at the beginning of the product design process, we can make recommendations to help with manufacturability, sterilization, biocompatibility, assembly and other issues, particularly with reusable devices," said Gerry Whitbourne, vice president of sales and marketing for STS Duo Tek in Henrietta, NY. "It's a great way to get your product into the marketplace sooner and with less heartburn."
Contract packagers and suppliers say that in addition to offering OEMs streamlined supplier management, numerous services under one roof and reduced costs, they've taken special care to anticipate a customer's needs.
Today's suppliers tend to have solid quality systems in place, and as part of those systems, they conduct regular customer surveys (although many companies had such procedures in place even before becoming ISO or FDA registered). Some survey new customers a month after an order has shipped to ensure all expectations were met. They also survey a representative group of customers each year to measure how well they've performed in providing quality product, meeting deadlines, responding to customer questions and satisfying other criteria. Companies take the results of these surveys seriously.
"We investigate every customer rating in any category we survey if it is not 'excellent' or 'good,'" said Leslie Love, director of sales and marketing for Tolas Health Care Packaging in Feasterville, PA. "We then make the appropriate changes to improve our future performance. The survey is only as good as the follow-up."
Following up clears up misconceptions. In one instance, a Tolas customer rated the vendor's on-time delivery as "average." A follow-up showed that the customer had pushed back several deadlines but its records weren't adjusted to reflect the changes. "By researching every answer below a certain level, either you can change someone's impression or understanding or you can improve your performance," Love noted. Through its surveys, Tolas found OEMs' top priorities are:
|·||Overall quality of product|
|·||Competitive prices tied with on-time delivery|
|·||Responsiveness of sales associates|
Surgical Technologies, Inc. of St. Paul, MN uses Gantt charts with timelines for new customer projects. "We talk with customers weekly and go through the chart together to make sure the project is on time and everything's being done," noted Joe Scanlan, vice president of business development.
Corey Cook, director of manufacturing, said that each month the company posts quality and deliverability results for viewing by employees and visiting customers. (Customers' names are coded to ensure privacy.) This serves as a constant reminder to continue striving for ever-greater levels of customer satisfaction.
Some packagers go beyond surveying customers and holding weekly conferences. They are also working with OEMs in other venues: networking and participating in technical forums at trade group meetings such as those of the Institute of Packaging Professionals and the Sterilization Packaging Council of the Flexible Packaging Association. Love noted that one of Tolas' engineers chairs an ASTM standards committee. By talking with OEMs in group situations, contract packagers learn more about overall business trends and the concerns that manufacturers have.
While manufacturers can be hesitant to switch packaging materials-in keeping with the philosophy, "If it ain't broke, don't fix it"-contractors continue to develop advances to deliver better products.
While Tyvek pouches and PTDG trays continue to lead the packaging materials parade, Brad Davis noted that Unimark Plastics is working with its suppliers to offer up better materials.
"We've seen OEMs moving from paper to plastic because it protects products better, and they're also converting to plastic from metal to cut expenses," Davis said. "We're working with our suppliers to leverage resins and look for alternate resins that perform the same way, often in the polypropylene part of the business. The simpler the packaging, the faster it can be turned around and be out in the market."
He added that colorant technology is advancing even more rapidly than resins. The incorporation of glitter and metal bits in plastics enhances their product's image, and even fragrances and flavors can be added to remove the taste and odor of plastic.
J-Pac also has formed alliances with other companies and broadly participates in the development of new materials used in packaging processes. These efforts are targeted to augment the capabilities of sterile, disposable medical packaging in ways that allow them to be used in new areas. The company played a role in the development of thermoforming processes for polycarbonate materials, and it hopes to continue making advances in thermoforming and packaging technology through its alliances.
"Alliances are essential to protect your growth and offer customers the best available packaging solutions," said J-Pac's Crane. "We need to be able to anticipate where the market will go, and if we have a material or capability that gives us a competitive advantage, we can help direct the market."
Such alliances also allow suppliers to devise solutions to unique challenges. Surgical Technologies' Corey Cook recalled one customer whose product needed to undergo EtO sterilization but couldn't come in contact with water. The packaging solution required a material that would be breathable like Tyvek but contain a barrier like a foil pack. By working with its suppliers, Surgical Technologies was able to develop a proprietary remedy.
Allying with other suppliers and OEMs is not unusual, but some packagers also forge relationships with the customer's customers to develop the packaging they need. Many OEMs conduct research to find out if end users such as nurses are pleased with a product's quality, presentation, sterility and ease of packaging use.
Smaller companies, however, might not have end-user data, so it's up to the contract packagers to survey customers for their feedback. As a result of such conversations, STS Duo Tek's Gerry Whitbourne noted that some packaging has been slightly redesigned for easier opening. Some innovations incorporate pull tabs, a 45-degree angle cut on one corner, a foil lid or other techniques such as multi-compartment pouches that allow greater flexibility in multiple quantity packaging. Another added capability is the ability to print labels using any color and any customer supplied image to further enhance a product's presentation.
Tolas recently created a new process in response to end-user concerns. In one instance, a packaging adhesive would soften and transfer to the product as it went through the steam autoclave cycle. In another, a product's sharp edge would occasionally scratch off some of the adhesive, which would then deposit onto the device. To address the user's complaint, Tolas developed Zone-Coated Rollstock, a lidding material with adhesive applied in a zoned pattern that would alleviate displacement during sterilization or transport.
"Developing innovative ideas and new products to solve customer problems is part of excellent customer service today," said Love.
Contract packagers continue to focus more attention on customer service as well as innovative packaging solutions, but their efforts face several challenges in the future, noted DuPont's Michael Scholla.
"The No. 1 challenge is increasing revenue in line with volume," Scholla asserted. He noted that during the past decade, volume has risen substantially while profits have not. Consolidation in the medical device industry has given OEMs price-negotiating power, and contract packagers will need to find ways to shore up their own bottom lines.
A second challenge comes from overseas. More OEMs are shipping manufacturing operations offshore, which presents a problem for domestic packagers.
Finally, new hybrid devices and biological products will broaden the market. In-vitro diagnostic tests, synthetic skin and other biological products will create new opportunities and challenges in their packaging needs.
While the challenge to "Pack It. Ship It. Trust It." have become more daunting, packaging innovation and emphasis on customer service are helping packaging suppliers ensure they conform to the motto.
About The Author
Stacey L. Bell is a freelance writer based in Tampa, FL who specializes in business and marketing issues.