Molding an Expanded Business Model
Today's Medical Molding Companies Offer Much More Than Traditional Services
Stacey L. Bell - Editor at Large
Photo courtesy of Vesta
Business as usual is now anything but for medical molders. While a decade ago they focused their efforts on molding alone, today they are expanding their business models to offer numerous value-added services.
"The days of business as usual are long gone," reported Tim Reis, vice president of healthcare markets for GW Plastics in Bethel, VT. "The entire breadth of what our healthcare customers want is moving in both directions away from traditional injection molding to encompass all parts of production from the design phase to the finished product, including manufacturing, packaging and sterilization."
Tom Caron, vice president of sales and marketing for Donatelle Plastics in New Brighton, MN, agreed. "Ten years ago, we were a molder and tool building facility," he said. "Today, we're a contract manufacturer. We design for manufacturability, offer quick-turn prototyping, handle final packaging and manage sterilization, in addition to offering metal component molding and liquid silicone rubber molding."
Why the shift? OEMs, trying to cut costs and redirect valuable resources, have focused their priorities on product development and marketing. They've chosen to outsource all other phases of the production process to outside experts who can draw on their own core competencies to get products to market faster.
In response to this trend, manufacturers increasingly are bringing new areas of expertise in-house or creating strategic alliances so that they can offer OEMs one-stop shopping.
The Art of the Possible
Perhaps the most popular value-added service is design assistance. After all, the earlier the molder is involved in the process, the sooner design for manufacturing considerations can be incorporated into a device's design, allowing for improved functionality, quality, throughput and ROI.
GW Plastics said it has seen a large portion of customers seeking help in this area, so the company has partnered with several design firms. "We'll eventually bring design services in-house because it is such a big trend," Reis said.
Micromolding is making solid gains in the medical device industry, particularly in the cardiovascular, neurosurgery and implant areas. Shot sizes as small as 3-10 CC are capable of producing extremely fine parts. Above, an example of micromolded products includes a punctal plug, a medical device used by ophthalmic practitioners to plug up tear ducts. Photo courtesy of Helix Medical.
Early involvement by both the OEM and molder in the design phase nearly always results in cost-saving parts consolidation or the elimination of secondary operations as well as suggestions for processes or materials that will improve the device's performance. Therefore, more OEMs are involving molders near the conception of a product idea.
The payback can be huge, Reis noted. A decade ago, when few companies worked together in this way, engineering changes could add 50% of the cost of tooling to a project and increase production time by half. Today, early collaboration means OEMs typically spend just 5-10% on engineering changes. A customer who 10 years ago spent $500,000 to fix a million-dollar tooling program because the product design couldn't be manufactured today would spend just $50,000 to $100,000 for minor tweaks, Reis explained.
Design help also can tweak or eliminate other problems. For example, Reis noted that one customer was shipping a polypropylene part in a silicone sleeve. The product required hand assembly and often fell apart during transit, which annoyed end users. His company suggested a one-piece design that could be created with two-shot molding. Hand assembly and the product breakup problem disappeared, and end users' satisfaction increased dramatically.
Phillips Plastics, based in Hudson, WI, shared a similar success story. One customer's product had experienced numerous recalls due to leakage.
Two-shot molded parts such as this settling chamber used in diagnostics are gaining popularity. A cost- and time-saving molding process, two-shot technology helped GW Plastics assist its customers to make products that are easier to use while providing more accuracy. Photo courtesy of GW Plastics.
"We took a part that used to be molded, assembled and hard coated and converted it into one two-shot part with one secondary operation step," explained Dave Thoreson, plant manager for Phillips Plastics Corp., Medical Molding & Assembly. By eliminating the product's major failure mode through its in-house design development center, the company said it saved the OEM more than $250,000 annually in manufacturing costs as well as significant costs associated with product recalls and customer complaints.
Many molding providers echo the same sentiments. "Often, customers bring a design to us that is basically at the 30 yard line. With our partnerships with design firms, we can help them create a more robust design that uses the most appropriate materials and processes to get them into the end zone fast," said Tom Podesta, vice president of healthcare for The Tech Group of Scottsdale, AZ. The company was recently acquired by West Pharmaceutical Services in Lionville, PA, another major healthcare molding service provider (see p. 12 for story).
A number of molding techniques are piquing medtech firms' interest, experts said.
• Two-shot/multishot molding Experts noted that two-shot molding has posted double-digit growth in recent years-largely due to the technology's time- and money-saving advantages. Suppliers can overmold a material with numerous shots of other materials or colors in one press with one mold, eliminating the need to move components from one press to another and build additional molds, as is the case with transfer molding. It also can dispense with some secondary operations such as pad printing.
"Three years ago, customers were interested in two-shot molding for its functional side; it adds value to internal components such as seals," explained Reis. "Today, there's more interest in its aesthetic value. Two-shot molding can add a soft-touch material to handles or a different-colored material to help differentiate a product from its competition."
The Tech Group recognized two-shot molding's promise and devised a way to make the technology even more appealing to a broader base of OEMs.
Podesta said medical OEMs want ways to consolidate parts and add features to enable more product functionality, so the company has turned to multipart molding. He added that it improves the cost, functionality and robustness of design, but historically, the method was most cost effective only with high-volume products. To help customers with mid-volume products take advantage of the technology, the company in the past year has developed a multishot tooling base.
"We place cavity stacks into the base to replicate what we want to accomplish in the production process, and it drives 30% of the cost and time out of the process," Podesta said. Customers previously had to buy the whole mold; now they purchase only the cavity stacks.
• Liquid injection molding Another area enjoying double-digit growth is LIM. "We're seeing development of new and innovative products for implants, and many of these customers are turning to LIM," said Dan Pastrick, vice president of operations for Carpinteria, CA-based Helix Medical, Inc., which specializes in platinum-cured silicones for implants. "LIM is attractive to customers due to its manufacturability. It is used in a closed system, so contamination isn't an issue, and it offers a 30-50% faster cycle time because you don't have to premix gum stock on a mill and cut it into sizes and weigh it before you mold. LIM eliminates all that. It also makes difficult geometry a non-issue. It flows more easily around corners, creates fewer voids and air bubbles, and you can use a vacuum with it."
In the past year, SMC Ltd. Molding and Manufacturing in Somerset, WI has added liquid silicone molding to its offerings. Because of its low equipment costs, the technology is suitable for lower volume runs. Liquid molding also boasts a cycle time in seconds as opposed to the minutes required by transfer molding. "So while it has a higher initial cost, high-volume runs also benefit from the much improved throughput and consistent quality," said Jim Meier, SMC vice president of marketing.
As part of its molding offering, the company provides a fast-track service for new tooling, which combines high-speed machining equipment with a 24-hour parallel path workflow. This enables the company to have single-cavity silicone production tools built and running in four weeks, Meier said. He added that interest in this area and two-shot molding are so strong that SMC is opening another 100,000-square-foot plant on July 1.
• Micromolding This process is making solid gains as well, particularly in the cardiovascular, neurosurgery and implant areas, said Tom Vassallo, Helix business unit manager. The company recently acquired micromolding capabilities that incorporate a custom-designed, vertical LIM press capable of both micro- and macro-insert molding with shot sizes ranging from 3-10 cc.
Donatelle's Caron pointed out that today's technology can make parts even more minute-between 1.1 gram and .001 grams-than what customers may realize. He added that micromolding's continuing advances are transforming the way in which components are designed, molded and processed.
"The parts are so small, you can't handle them. You need to automate the entire process, including inspection, assembly and packaging. Materials are a huge concern as well. Instead of being concerned with lot-to-lot variation, we're concerned about pellet-to-pellet variation. Therefore, we're working more closely with raw materials suppliers," Caron said.
• Pressure transducers Gaining popularity, these devices are placed in the mold cavity to monitor injection pressure and melt viscosity and warn operators if readings stray from pre-set boundaries. In addition, machine vision, whereby parts are inspected throughout the production phase by programmed robots, and automated reject controls, through which robots reject out-of-spec items, allow for more precision and control over the entire molding process, noted Thoreson.
• Cold runner molding With material costs escalating, technologies that can cut or even fully eradicate material waste are seeing increased interest. Cold runner molding, which eliminates all the material waste of traditional molding techniques, is one such technology. Since acquiring cold runner technology leader KSIL in 2001, Vesta, Inc. of Franklin, WI has expanded those offerings.
"The cold runner process injects silicone rubber directly into the part cavity rather than going through the traditional sprue and runners system, allowing for a significant reduction in material waste," explained Charles Heide Jr., Vesta market development manager. "It's ideal for high-volume runs of products such as shaft seals, cassette diaphragm seals and baby bottle nipples."
Medical molders also are bringing in-house more secondary operations to streamline production time and gain control over final results.
In 2002, Helix Medical brought in cryogenic deflashing. "The best company we'd found to perform this process is located on the East Coast. Since we're in California, sending work to them added weeks to the process," Vassallo explained.
In the past year, Helix also has added pad printing. It considered silkscreen printing, but that technology gets only 3,000 to 5,000 strikes per screen, requires near-constant cleaning of the screens and its presses require skilled operators. In comparison, pad printing allows about 30,000 strikes per pad, is environmentally friendly and its machinery is easy to operate. As a result, customers save money by using the latter method.
Thoreson pointed out that Phillips Plastics' OEM customers, in their quest for more control over product data and speed, increasingly are turning to Datamatrix laser printing. Previously lot coding had been pad printed or included on a label on the shipping box. Datamatrix laser printing etches coding directly into the raw resin, offering a more precise way of tracking individual components or products.
Expanded design, molding and secondary operation services aside, medical molders also have broadened their involvement in back-end and overriding operations.
Consider R&D. Meier noted that one of SMC's top priorities is to study refinements to molding procedures. "We're working on our own and in close collaboration with key customers to identify ways to drive waste and cost out of the system. Sometimes we can do some real magic," he said.
Heide noted that Vesta has developed advanced manufacturing cells for the production of silicone rubber-fabricated assemblies to provide increased integration and more cost-efficient, timely production runs.
"Since not all production runs are continuous-some are just once a quarter or less frequently-we've developed work stations that are flexible enough to run short-run, medium and continuous cycles in the most efficient ways possible," he noted. "We're constantly studying how best to improve our operations."
Supply Chain Management
In addition, suppliers today often take the lead in establishing the communication timetable and content. "We're more proactive in taking control of communications and setting the agenda," said the Tech Group's Podesta. "We're as invested in making sure our customers meet all of their milestones as they are, so we want our project team on the phone with their project team every week, and we go through an agenda in which we discuss timelines, action items, deliverables and who's responsible for what and their status, etc."
Customers also expect suppliers to provide a wide range of advice and establish a network of service providers. In effect, suppliers are becoming supply chain managers, overseeing many vendors for customers.
"There is a major trend to whittle down the supply chain list and have fewer vendors handle all supply chain management," said Daniel Draper, vice president of sales and marketing for PTG Global in Santa Ana, CA. "Years ago, a half-billion-dollar company might list 400 vendors in its vendor pool, and today it's down to 80. Customers want a one-stop, integrated solution."
In addition to supply chain management, more medical molders are also managing inventory for their customers. Helix Medical will maintain inventories of finished goods, work in process and raw materials for its customers who complete a quarterly forecast. Phillips Plastics offers dock to stock; all lot release and testing are performed at the company, and it retains the paperwork and releases product directly to the customer for final assembly.
Phillips' Thoreson said he also has noticed a big push toward EDI (electronic data interchange) systems. "We can see when people are pulling product from the warehouse, and we can replenish their supplies and bill them per pre-set specifications. It eliminates customers having to track inventory and process purchase orders," he said.
Even as medical molders continue to expand their service offerings to meet customers' expectations, they're experiencing strong growth in the need for molding.
"Between the increase in the number of geriatric patients and their increased needs for medical devices, the effects of biomedicine, the growth of the bariatric marketplace and the treatment of obesity, and the surge in more home care tests and devices, we expect to see continued need for increased capacity in medical molding," reported Reis.
Molding Overseas: OEMs Seek Partners with Capabilities Abroad, But Some Say Gap in Costs Is Seen to Narrow in Recent Years
Not only are U.S. medical molders expanding the number of services they offer, they also are expanding their reach into other parts of the world.
"OEMs today want a company that has the scale to bring solutions. They need the size and geographic reach into lower-cost regions to be able to offer their customers a variety of options," said Tom Podesta, vice president of healthcare for The Tech Group in Scottsdale, AZ. Facilities in Latin America, Mexico and Puerto Rico continue to be strong draws for OEMs, and access to Asia will be increasingly important in the long term.
"Even if you don't have a presence in these areas, customers want to know you have relationships, connections and know what's going on in those regions," Podesta said.
Indeed, many companies that approach PTG Global of Santa Ana, CA inquire about the benefits of offshore manufacturing in China or other locations characterized by lower labor costs. However, many are fearful to make the manufacturing transition, said Daniel Draper, global vice president of sales and marketing for PTG, which has multiple manufacturing alliances in Shenzhen, China.
"We're seeing a little recoil in offshore medical manufacturing now due to protection of intellectual properties (IP) and piracy concerns. Additional concerns surround the tenuous socio-political environment of Taiwan and China. Asia is enjoying a booming economy right now, but reliable economists report that a fall, or a 'cooling' adjustment, is inevitable, and customers want to make certain their operations won't suffer."
Certainly, piracy does occur, but U.S. suppliers have taken steps to ensure that IP and production operations-will remain secure.
Further, PTG Global offers a service to provide two sets of tooling for one price to customers who decide to move part of their operations offshore.
"We're investing in tools that are intended as backup tools, or clones, that are to be kept in the U.S. The backups are made to do limited runs-50,000 to 100,000 shots, not 5 million-but they give great comfort to our customers. They know that if an economic correction, dock strike or political fallout that will affect the flow of product through the supply chain occurs, we'll be able to pick up production right away," he explained.
Draper added that a few years ago the cost to manufacture in China was 60-55% cheaper, but today the differential has fallen to 40% or less, particularly after adding in the cost of sending staff overseas throughout the cycle to oversee progress, qualify tools and inspect first articles. Production runs of 250,000 to 500,000 used to be the tipping point to consider overseas production; today the trigger is more than 5 million pieces, he said.
To compare the costs and considerations about molding in the U.S. versus overseas, order a free copy of "Know the True Costs of Your Molds" from the American Mold Builders Association at (630) 980-7667 or e-mail firstname.lastname@example.org.