The Rest of the Story …

Molding experts weigh in on cost, quality, changing economics and healthcare reform.

Christopher Delporte

Molding providers are upbeat despite a downward economy. The medical device space has offered firms at least a marginal shield against slumping market performance. For molding companies in the automotive industry—as well as others hard hit by the current recession—the medical device business offers a viable means to grow their business, provided molders are positioned to respond to the very specific and demanding needs of medtech manufacturers and aren’t looking for a quick fix for an ailing bottom line.

In the June issue ofMPO,molding experts outlined some of their concerns, and predictions about the state of the current marketplace. Cost, quality, changing economics and healthcare reform were among the many topics addressed. To expand on the conversation and explore some of the thoughts not addressed in print, we’re including some noteworthy quotes in this expanded online installment.

Excerpts include comments from the following:

Kevin Bradley, director of the medical business unit for Mack Molding in Arlington, Vt.
“In our environment, we’re actually seeing an increase in demand for molding services, primarily being driven by an aging population. There’s a strong push for disposable products. We’re also seeing a lot of new business in orthopedics. The development cycles are so long, and given the financial condition of many companies, medical device OEMs are really taking a hard look at their supply base and who’s going to be around and who is stable. That’s helping us gain new business opportunities. Our medical business is actually growing. Sales are up. And the pipeline is very full.”

“OEMs are getting us involved more up front. Having the regulatory competence has been critical. OEMs are looking to bring people in upfront to help them with the whole process. We have to be as knowledgeable about the regulations as our customers. If we’re not, it puts them at risk.”

Dave Thoreson, general manager of the Phillips Medical division of Hudson, Wis.–based Phillips Plastics Corp.
“There’s serious pricing pressures in the healthcare industry. So there’s a need for lean manufacturing throughout the whole supply chain that starts from the hospital through to the medical device manufacturers and to the contract manufacturers. There’s a need for Lean manufacturing through that whole supply chain. We recently listened to a speaker at Medtronic who talked about lean manufacturing in the hospital setting. They’re value-streaming the process, calling it “door to balloon time”—the time from when a patient walks in the door to the time a doctor uses balloon angioplasty to clear the blocked artery. They’re using Lean manufacturing practices within a hospital setting.”

Scott Herbert, president and founder of Rapidwerks Inc. in Pleasanton, Calif.
“I see a fair bit of business coming back from Asia and other countries. And I think’ it’s helping the industry. OEMs are concerned about quality issues. Prices of fuel last year didn’t help shipping costs. So I think people have avoided the issue and are having things made here at home.”

“The envelope of our technology is always being challenged. The economic challenge today is how to be cost effective and competitive. In that regard, we can compete. There are companies that are a little older and set in their ways, and the key thing about going through this difficult time is that you have to learn how to change. And with that change you have to learn to change your business model a little bit and move with the market. Today, there’s a tremendous amount of pressure to automate processes and ensure that there’s very little labor content in a product that’s being molded. I think the communication between the OEM and the molder is increasingly more important. The demand compared today from 20 years ago is significantly different. Twenty years ago, it was all about molding the size of your hand or bigger. Now you’re talking about shooting components that are the size of a grain of rice with geometry on it and they need to be assembled into something else. So molders have an opportunity to grow their business. That’s why change is important. If you embrace that, there’s lots of opportunity.”

John Pfaff, vice president of U.S. Operations for the MedTech Group in South Plainfield, N.J.
“I was at a large OEM’s supplier breakfast recently, and their chairman said he’s concerned there are two major things coming up. One is the [medical device] safety act, and the other is that Medicare is refusing to pay hospitals or doctors for mistakes. That’s going to cause the hospitals to push back on their suppliers. The other thing is the overall cost pressures are going to be even bigger going forward. People are going to continue to want lower prices. But you have to take a big-picture view. We’re in this thing together. Every major OEM we work with—particularly the ones that are supplier friendly and true partners—don’t want to lower prices for the sake of it, but to lower total cost. That’s the key.”

“Companies are looking—especially larger more sophisticated companies—are looking for more help going forward—more value-added activities, more R&D, and the possibility of a low-cost country option. Customers want to know if you can provide molded components or devices to their plants whether they’re in Latin America or Asia. They want to know if you have plants in China or Costa Rica. They’re looking for fewer suppliers than can do more—build other parts and perform assembly. Customers also want you to have a good supply chain system of your own in place and be able to handle risk mitigation.”

Jim Fitzgerald, vice president of sales and marketing for Franklin, Wis.-based Vesta Inc.
“The exciting part about our healthcare system today is the number of medical conditions that are being treated today that were previously untreatable. New technologies are introducing products and procedures that continue to push the limits of what is possible, and it makes for some very exciting discussions with our engineering team, and the R&D teams from our customers. We continue to see a push for smaller products, or products with clinical features such as antimicrobial properties to assist in the focus on patient care. It is well understood that the goal for most surgical procedures is to become less invasive, and we spend a great deal of time working with our customers to discuss manufacturing options that can contribute to that cause. At the same time, quality continues to be our first priority, and companies understand the risk to their brand if a quality failure would result in patient harm or a product recall. We only see this pressure increasing, which requires more involvement from our customers to understand our processes and to work with them on risk mitigation programs.”

Dan Tasseff, director of sales and marketing for FloMet LLC in DeLand, Fla
“Since we do metal injection molding we don’t have the same type of issues as plastic molders. We are more in line with precision machining suppliers. Having said that, we have seen some slowdown in the elective procedure markets but not in the medical surgical markets. The biggest issue we have seen from the current economic climate is the lack of capital available for new projects and tooling. Everyone is very cautious of spending capital dollars on new projects.”

“One of the most recent trends has been for micro molding. We have seen a push for nanotechnology over the past few years. In the medical market smaller is better. Non-invasive surgery continues to dominate the market and now natural orifice surgery has become a growing trend. This is the concept of using a natural entry into the body instead of an incision site. This requires smaller components that could be made using micro molding.”