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Tubing Extrusion Trends

Service Becomes Key as Vendors Are Asked To Manage More Than Just Their Products

By: Stacey L. Bell

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At a time when many businesses are cutting staff to shore up balance sheets, tubing and extrusion companies are adding to their payrolls. In recent years, their OEM customers have been shifting duties they formerly handled-such as inventory control, product inspections and supplier management-to their tubing and extrusion contractors. As OEMs have cut capabilities, their tubing and extrusion counterparts have assumed the responsibilities.

Also picking up is sales growth. Companies interviewed by Medical Product Outsourcing report annual growth of 10-25%. (Two companies saw 50%-plus increases in sales due to new customers.)

“Customers are outsourcing more of their manufacturing now,” said Geary Havran, president of NDH Medical, Inc. in St. Petersburg, FL. “They’re also outsourcing other requirements peripheral to manufacturing-requesting more design services, related materials expertise, services related to logistics and inventory control.”

Contractors expect strong growth to continue for the foreseeable future. After all, as the population continues to age, demand for innovative, minimally invasive medical products is expected to soar. As OEMs gear up for increased sales, they’re asking their outsourcing partners to meet greater expectations and needs. Several key trends have emerged.

Quality systems are now de rigueur. “Ten years ago, OEMs didn’t really ask if you were ISO or FDA registered,” recalled Mark Saab, president of Advanced Polymers, Inc. in Salem, NH. “Five years ago, only the cream of the crop were registered. Today, it’s almost a given. To produce products for OEMs, you must have solid quality systems in place.”



Audits Are Essential

Photo courtesy of Advanced Polymers.

A second part of this trend is OEMs’ increased interest in conducting audits of their outsourcing partners’ facilities. During these audits, customers review the components of the quality system, cleanliness of the facilities and the capabilities offered. In the past, according to Saab, such audits rarely occurred. Today, they’re to be expected at least every few years, especially if a contractor is producing a new component or high-volume runs or has had one or more shipments out of spec within a 12-month period.

Inventory and supplier management are now contractor responsibilities. Whether they refer to shift as just-in-time manufacturing, lean manufacturing or kanban (the Japanese concept for just-in-time manufacturing), OEMs want contractors to manage their inventory to cut the cost of doing it themselves. Manufacturers are receiving blanket orders for 3-12-month periods, and it is up to them to ensure an adequate supply of materials to keep sufficient stock on the shelves.

If an OEM uses its last components, it expects replacements to arrive the following day. In the case of Judson Smith Co. in Boyertown, PA, account managers are linked into major customers’ material review board (MRB) systems. When a product level is reached, it is often the responsibility of the supplier to replenish the stock based on MRB demands.



Pitfalls to Consider
Just-in-time manufacturing has its drawbacks. For one, many manufacturers must rely on their customers to provide accurate information on the amount of product they’ll need. Secondly, inventory management can be an expensive undertaking no matter who handles it, even though contractors strive to keep just one to three months of supply on hand.

Havran noted that the logistics of inventory management have evolved over time. In the first phase, the customer holds the inventory and replenishes it from the supplier. In the second phase, the customer shifts the burden to the supplier. In the third phase, the customer and supplier work together to avoid having to hold inventory at all, and the process becomes truly just-in-time manufacturing. Observers say the medical device industry is just starting to enter this third phase.
Photo courtesy of Advanced Polymers.
Supplier management also can be time consuming. While in the past contractors sold OEMs just a component of a final product, some customers are now asking them to work with printers, tippers, molders and other secondary operations manufacturers to produce a semi-finished product, noted Apur Lathiya, director of sales and marketing for ExtruMed, Inc. in Placentia, CA.

“I establish relationships with the customers’ approved vendors and then roll their pricing into mine,” Lathiya explained. “It’s up to us to make sure the customers’ needs are met. We’ve implemented receiving inspection to meet that need-to ensure that all specifications for tubing and secondary operations are met.”

“One of the trends that we have noted is an increase in the reliance on channel partners to perform multiple sourcing functions,” said Robert Jennings, vice president of medical sales and marketing for Zeus, Inc. in Orangeburg, SC. “This results in a more integrated manufacturing chain spreading risk and reducing capital expenditure while allowing the primary manufacturer to focus on its core competencies. Outsourcing extrusions and adding value is a natural extension of this trend.”

Solid statistical sampling is now a core competency for contractors. Lathiya touched on another trend in the sector: contractors are now expected to certify that a product meets OEM specifications. Customers want contractors who can deliver dock to stock, Saab noted. Statistical sampling is a part of that process.

“For some of the tubes we make, it takes us longer to inspect them than to make them,” Saab said. Some companies, including Advanced Polymers, have hired quality systems experts to help streamline the process.


The Foreign Factor
Pressure on costs continues. OEMs are continuously working with their supplier base on process improvements with the ultimate goal of becoming as efficient and competitive as possible, said John Shields, sales and marketing manager for Judson Smith. Shields and others said that the challenge for the foreseeable future would be to ensure that revenue growth can support the capital needs of technological growth.
Advanced Polymers extrudes some of the smallest tubing in the industry.
Overseas competitors exacerbate pricing pressures. Increased pricing competition from offshore manufacturers is translating into an emphasis by U.S. contractors to shore up their intellectual property to gain a competitive advantage.

“The whole issue of offshore manufacturing will become more of a threat to the industry,” Havran said. “But it will be interesting to see if there’s a liability or regulatory backlash.”

He cited one incident in which a company issued an RFP for companies to provide labor rates of $1.50 an hour or less. No U.S.-based companies could meet that request so the contract went to an offshore manufacturer. A few years later, however, the OEM experienced malfunctioning devices and faced legal and regulatory trouble.


Novel Products
In the meantime, U.S. contractors are expanding their intellectual property and developing new and novel products and processes. For instance, NDH Medical recently filed a patent for a new extrusion process that produces a multi-lumen catheter tube whose wall thickness varies down the length of the tube. The new technology is being used in a hemodialysis catheter.

 Advanced Polymers, Inc. developed an ultra-thin-walled, heat-shrinkable tubing that the company said is typically 10 times thinner than other commercially available plastic tubing. The tubing’s wall thickness measures .0005 inch or less, five times thinner than a human hair, noted Saab. “We can hold it to a .0001-inch tolerance when the typical industry tolerance in plastic is considered tight at .001-inch,” Saab said.

Jeff Warden, vice president of marketing for Superior Tube Co. in Collegeville, PA, said he expects titanium biopsy needles to be a new growth area. “With the newer, more powerful MRI machines being introduced during the past year, iron-free biopsy needles are being required. Titanium is an excellent choice for these needle gauge sizes. It requires a combination of compressive and tensile-reduction techniques to make the sizes in a variety of titanium-based alloys,” Warden said.


Value of Alliances
Strategic alliances are becoming more common. Another way in which contractors differentiate themselves from overseas and domestic counterparts is in the way they approach risk. It’s becoming more popular for contractors to form strategic alliances with both their OEM customers and suppliers to develop new, innovative materials, processes and products, said Bob Poirier, director of sales and marketing for Putnam Plastics Corp. in Dayville, CT.

Thinner walls and tighter tolerances are the demands from tubing customers these days. Above, PEEK tubing from Zeus, Inc. (Photo courtsey of Zeus).
More communication is key, particularly in meeting tighter time lines. In addition to seeking advice about materials and manufacturability from their suppliers, today’s OEMs also need more interaction with their contractors because of increasing product complexity. Further, they want same-day responses to their calls and e-mails, which is replacing faxing as the top communications tool.

ExtruMed’s Lathiya noted that project time lines have shrunk dramatically in recent years. Five years ago, a four-week delivery time for an R&D project was the norm; today customers are looking for deliveries within two weeks.


Shortened Deadlines
 Lead times for prototyping have fallen, too. To better serve this need, in 2003 Microspec Corp. launched EJS Extrusion, a company housed under the same roof. The company is staffed with two extrusion experts and one designer. Tim Steele, Microspec’s president, said that because the staff is devoted to prototyping and communicates regularly with customers during extrusion runs, lead times have dropped significantly. A product’s development time used to average 8-10 weeks; today, they can be as short as two weeks.

 While growth in the tubing and extrusion sector appears strong for the next several years, contractors will continue to face challenges. With growing competition, pricing will be a concern. In addition, devices continue to become more sophisticated and will make greater demands on materials and equipment in the future.

“OEMs are expecting their product to perform more functions, and I expect in the future we’ll see ‘smart’ devices in which tubes will analyze fluid and determine how often more fluid or medicine should be added. The industry will move away from tubing that ‘just’ delivers fluid,” predicted Havran.

Looking to strategic alliances and placing an emphasis on innovation, tubing and extrusion contractors are poised to meet future challenges with aplomb.


About The Author
Stacey L. Bell is a freelance writer based in Tampa, FL, who specializes in business and marketing issues.
In Tubing, Tighter Tolerances and Thinner Walls Are the Trends
A new extrusion process incorporated by NDH Medical, Inc. permits the wall thickness of one of the lumens to change, allowing the thin end of one lumen to be folded over the other, reducing the cross sectional area of the tube. Photo courtesy of NDH Medical.
In addition to asking their tubing and extrusion contractors to take on new responsibilities, OEMs have continued to raise the bar in terms of product quality.

“An increasing extrusion trend I have noticed in the past few years is that OEMs want tighter tolerances, thinner walls and softer materials,” said Apur Lathiya, director of sales and marketing for ExtruMed, Inc. in Placentia, CA. “Those requirements are especially challenging when they’re all to be used in one product.”
As late as the 1980s, catheter tubing tolerances of +/- .005-inch were common, noted Tim Steele, president of Microspec Corp. in Jaffrey, NH. Today, tolerances are at +/- .001 inch, and OEMs also looking for wall thicknesses of .001-inch or thinner.

Complicating matters is that OEMs also are seeking additional technical features on many products. For example, Steele noted, customers often require radio-opaque stripes or wires placed within the walls of a tube, and when finished ODs are less than a millimeter, that can be a challenge. There is also increased interest in tip forming, eyeholes, printing on tubing, overmolding parts with the tube and sterilizing, packaging and shipping the product directly to end users.

Multi-layer extrusions, particularly tri-layer extrusions, are becoming more popular, too, noted Bob Poirier, director of sales and marketing for Putnam Plastics Corp. in Dayville, CT. Some tubing has a wall thickness of .0025-inch but includes three layers of materials, he explained.
Jeff Warden, vice president of marketing for Superior Tube Co. in Collegeville, PA, noted that OEMs also want suppliers to dial in tight mechanical properties such as tensile strength, yield strength, elongation and grain size.

While OEMs want materials to meet more demands, there haven’t been significant changes in offerings in recent years, suppliers say. Stainless 316 continues to be the most popular metal used; however, interest in cobalt chrome and titanium is increasing as OEMs develop products with better radio-opacity to show up on X-rays and other imaging technologies. Nickel titanium, nitinol, shape-memory alloys and exotics are popular as well.

On the plastics side, nylons and alloys such as polyurethane and polycarbonates continue to see the most use, but engineered resins including PEEK are gaining. A number of OEMs seems to be moving from metal to plastic for some of their products due to plastic’s smaller price tag and its ability to be used with imaging technologies. However, some industry designers say that metals hold tighter tolerances than plastics, so a change in materials isn’t possible for many products.

Some materials—notably polyvinylchloride (PVC), nickel and natural latex—may be phased out in coming years due to potential health risks. (PVC has been identified as a possible carcinogen, and some people are severely allergic to nickel and natural latex.) Materials specialists are refining current metals and plastics to eliminate the use of these controversial components.

One of the biggest trends in materials, according to Geary Havran, president of NDH Medical, Inc. in St. Petersburg, FL, is customers looking for suppliers to provide expertise on new materials to allow a reduction in the number of parts needed. For example, he noted, OEMs used to order braid-reinforced tube. Now they want one stronger tube—a single material that replaces the complexity of previous designs.
Havran said he expects such requirements to only increase with time. “As the medical device industry continues to be challenged to produce even more sophisticated, smaller devices, we as their contractors will be challenged to continue to develop materials and processes to meet ever tougher demands in years to come,” Havran said.

Finally, experts note that developing new materials and processes is what will help tubing and extrusion companies stand out from the crowd in the market place.

“Developing innovative and customized physical properties is becoming a key differentiator for many OEMs as they select a channel partner,” added Robert Jennings, vice president of medical sales and marketing for Zeus, Inc. in Orangeburg, SC. “In the next 12 to 24 months, we expect to see an increase in market demand for nylon-based extrusions and a continued growth in fluoropolymers.”

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