The world of medical device manufacturing has seen many upheavals in recent years as a result of the fallout from the pandemic. MD+DI recently caught up with Andrew Gilliard and Don Bonitati of Trelleborg to discuss some of the biggest trends in medical device manufacturing.
Gaillard is Senior Global Commercial Director for Trelleborg Healthcare & Medical. It partners with customers to design, develop, manufacture and bring to market engineered solutions for medical device, biotechnology and pharmaceutical applications.
Bonitati is Trelleborg’s Healthcare & Medical Segment Director for the Americas. In this role, he manages key growth initiatives such as the expansion of Trelleborg’s biopharmaceutical capabilities in the US and Asia and the growth of Active Pharmaceutical Ingredients (API) in blended products.
MD+DI: Let’s dive into some of the current trends in medical device manufacturing. We’re seeing a lot of layoffs at big tech companies and with a lot of the OEMs. Are you seeing this too?
Galliard: Overall business has remained consistent and growing. we are not seeing [a downturn] right now. One of the advantages is that, at least in January, we started to see applicants in our factories go up. This is because of layoffs that may be taking place in other industries.
MD+DI: Are we seeing medical device manufacturing cool down a bit? Is there any slowdown due to supply chain constraints?
Galliard: We’re back to our pre-pandemic levels, but because of growth and expansion we need more people… and obviously I’m talking about the 50,000-foot view here. The one space where we’re starting to see a little bit of a slowdown seems to be more in what I would call the pharmaceutical/biopharmaceutical manufacturing space. My instinct from our conversations with customers is that this isn’t happening because of our economy. It’s because COVID-19 vaccines took off so fast and they asked for so much. Vaccines are not [in demand as much] and the volumes are flattening out and stabilizing…
We’ve had some clients that have doubled their business two years in a row and now they’re back to growing 20%, which is fantastic, but different. We still have supply chain constraints in the silicon feedstock space, specifically. But it is improving and it seems that it is moving more to labor issues than to supplying them with raw material.
Bonitati: 18 months ago, we saw a lot of customers getting nervous about the supply chain and labor and they started placing orders that were 24 months away. This didn’t help because it made the situation worse by generating more demand for material than the market was absorbing. This meant that companies that manufacture silicon did not have this capability. We can’t turn on that additional capacity because it takes years to build that additional capacity for a silicon maker. This led to a lot of delays that caused us and everyone else in the industry to fall into a lot of lead times because we needed more manpower and required advance notice to increase allocations with material suppliers and increase that capacity to be able to manufacture these components.
So now I think what we’re looking at is a set of levels. We’re getting more material now, we’re getting more manpower, and we’re starting to chew through that reserve, but the question will be whether customers will continue to consume that in the market. That might correct itself in the next quarter or two and then we’ll see more of that steady growth instead of the spike that we would see where customers were doubling their volume orders over previous years.
MD+DI: It seems that the last few years have seen more manufacturing facilities being built. Could you talk a little bit about that?
Bonitati: There is definitely a demand for products that is increasing. There’s been a little change that I’ve seen in certain markets – for example, there’s a lot more focus on what we do in diagnostics than there was two years ago. And this is real. This will continue. There is more demand for this product. They are stocking stock.
Galliard: The diagnostics and biopharmaceutical space seems to be where a lot of that manufacturing capability has been added. I don’t know that – so it’s pure speculation, but it seems to me that it’s also to face some of the challenges in 2020 where you couldn’t get supplies from their one site, so now they’re doing it region to region.
MD+DI: Do you think this is sustainable for medical device manufacturing in the long term?
Galliard: Yes. I think everybody got burned in 2020 and they really want region-to-region type supply chains because you couldn’t get stuff.
Bonitati: It’s not as common anymore for rows of devices to be in a facility, they’re starting to spread them out. They may have a US line; may have a line in Ireland; they might have a line in Puerto Rico. They are starting to mitigate supply chain risk, but also serve their regional manufacturing and distribution needs.”
MD+DI: Let’s switch gears for a second and talk about miniaturization. What are some of the trends you are seeing?
Galliard: Patients want to see a device that is less visible, less uncomfortable, which in many cases means smaller. As the years go by, you see more and more escalation. I used to work at Medtronic and the pacemaker was the size of a silver dollar, now it’s one the size of your pinky. It’s going in that direction, which means that we, as manufacturers of these parts, need to get better and better at micro-molding. Not only that, we do extrusions. One can imagine a tube. We have some that are extremely thin – maybe two pieces of dental floss together in terms of thickness. The entire industry is moving in this direction. This requires innovation. You can’t do that with the normal pross size, you can’t do that with the normal injection/needle. Continually advancing in this space is an important focus for us as a company.
One of the things we’re doing is two or three shots, where you inject silicon or plastic, for example. So imagine if you have a mold and you inject the silicon first and then you rotate and inject the plastic – or the other way around depending on what you are doing, maybe you have an inspection part and then it comes out. And it will go on and on, right? This allows you to have a little more control. We’re starting to see more of that in the medical space. It is quite common in other industries.
MD+DI: Inflation has been a big topic in almost every industry. How is Trelleborg handling this? Is it a factor?
Galliard: Costs are going up. Our raw material suppliers are charging us more because of this. Our electricity, utilities… it’s all going up. It’s definitely a factor, but it’s not as pronounced as it is in 2021. In terms of the scale of the changes. It’s still more than the last five years. Our raw material suppliers are having difficult conversations with us and we are having difficult conversations.
Bonitati: It’s not exclusive to us, right. Everyone is feeling the same impact when trying to retain labor or pull labor from another organization. This is the only way to continue to grow and meet your manufacturing needs.
MD+DI: Are any of these headwinds impeding innovation? Do you see any slowdown or pullback in innovation because of the current scenario?
Galliard: I think in 2021 innovation was put on hold when everyone struggled to get the parts when they needed them. I think towards the end of 2021 people started to see the light and started to put more focus on innovation and it’s coming again.
Bonitati: I’ve never seen customers take their foot off the innovation accelerator. I think when you’re talking about evolutionary changes, they’re still moving forward, fast. But if you’re talking about revolutionary changes – something that’s not on the market today – that might take longer than before. Just because maybe the technology needed wasn’t as accessible as it used to be.
MD+DIKatie Hobbins Managing Editor contributed to this report.