The world of medical device manufacturing has gone through many twists and turns over the past few years as a result of the fallout from the pandemic. MD+DI recently caught up with Trelleborg’s Andrew Gaillard and Don Bonitati to discuss some of the biggest trends in medical device manufacturing.
Gaillard is Senior Global Commercial Director for Trelleborg Healthcare & Medical. He forms customer partnerships to design, develop, manufacture, and bring to market engineered solutions for medical device, biotech, 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) within combination products.
MD+DI: Let’s dive into some of the current trends in medical device manufacturing. We’re seeing a lot of layoffs in big tech companies and with many of the OEMs. Are you seeing this too?
Gaillard: Business overall has remained consistent and growing. We’re not seeing [a downturn] right now. One of the plusses is, at least in January, we started seeing the applicants in our factories go up. That's because of layoffs that may be occurring in other industries.
MD+DI: Are we seeing medical device manufacturing cool off a bit? Is there any slowdown because of supply chain constraints?
Gaillard: We have gotten back to our pre-pandemic levels but because of growth and expansion we need more people … and I’m obviously talking at the 50,000-foot view here. The only space that we’re starting to see a little bit of slowdown seems to be in more of what I would call the pharmaceutical/biopharmaceutical manufacturing space. My gut from our customer conversations is this isn't happening because of our economy. It’s because the COVID-19 vaccines took off so fast and they ordered so much. Vaccines aren’t [in demand as much] and volumes are flattening and plateauing...
We had some customers double business for two years in a row and now they’re back to 20% growth, which is fantastic but it’s different. We do still have supply chain constraints in the silicon raw materials space, specifically. But it’s getting better, and it seems like it’s moving to more labor issues than raw material supplies for them.
Bonitati: 18 months ago, we saw a lot of customers getting nervous about the supply chain and labor and they were starting to put orders in that were 24 months out. That didn’t help because it compounded the situation by driving more demand for material than the market was absorbing. That caused companies that are manufacturing silicon to not have that capacity. We can’t turn on that additional capacity because it takes years to build that additional capacity for a silicon manufacturer. That drove a lot of backlogs that made us and everybody else in the industry fall on a lot of lead times because we required more labor and we required advanced notice to increase allocations with material suppliers and increase that capacity to be able to make those components.
So now I think what we’re seeing is a level set. We’re getting more material now, we’re getting more laborforce, and we’re starting to chew away at that backlog, but the question is going to be can the customers continue to consume that in the market. That may right itself in the next quarter or two and then we’ll see more of that steady growth instead of that spike that we would see where customers were doubling their volume requests over previous years.
MD+DI: It seems like over the past few years we’ve seen more manufacturing facilities being built. Could you speak to this a bit?
Bonitati: There’s definitely a demand out there for products that are ramping. There’s been a little bit of a shift that I’ve seen in certain markets – for instance, there’s a lot more focus of what we do in diagnostics than what we did two years ago. And that’s real. That’s going to continue. There’s more of a demand for that product. They’re stocking inventory.
Gaillard: The diagnostic and biopharmaceutical space seem to be where a lot of that manufacturing capacity was added. I don’t know this – so it’s pure speculation, but it feels to me is that it’s also to address some of the challenges in 2020 where you couldn’t get supply out of your one site, so now they’re doing from region to region.
MD+DI: Do you think that’s sustainable for medical device manufacturing in the long-term?
Gaillard: Yes. I think everyone 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 device lines to be in one facility, they’re starting to spread them out. They may have a line in the U.S. they may have a line in Ireland; they may have a line in Puerto Rico. They’re starting to mitigate that supply chain risk but also address 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’re seeing?
Gaillard: The patients want to see a less visible, less uncomfortable device, which in many cases means smaller. Over the years you just see further and further escalation. I used to work at Medtronic and the pacemaker was the size of a silver dollar, now there’s one the size of your pinky. It’s going in that direction, which means we as manufacturers of those parts need to get better and better about micro-molding. It’s not just that, we do extrusions. If can imagine a tube. We have some that are extremely thin – maybe two pieces of dental floss together in terms of thickness. The whole industry is going that way. That requires innovation. You can’t do it with the normal pross size, you can’t do it with the normal injection/needle. Continually advancing in that space is a major focus for us as a company.
One of the things we’re doing is two-shot or three-shot where you inject silicon or a plastic as an example. So, imagine if there’s one mold and you inject first the silicon and then you rotate and inject the plastic – or the other way around depending on what you’re doing, maybe there’s an inspection piece and then it gets removed. And it’ll keep going nonstop, right? That allows you a little bit more of control. We’re starting to see more of that in the medical space. It's fairly common in other industries.
MD+DI: Inflation has been a big topic in nearly every industry. How is Trelleborg handling it? Is it a factor?
Gaillard: Costs are going up. Our raw material suppliers are charging us more because of it. Our electricity, utilities… it’s all going up. It’s definitely playing 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 it had been in the last five years. Our raw material suppliers are having tough conversations with us and we’re having tough conversations.
Bonitati: It’s not unique to us right. Everybody is feeling the same impact on trying to retain labor or pull labor from another organization. That’s the only way you’re able to continue to grow and fulfill your manufacturing requirements.
MD+DI: Are any of these headwinds hindering innovation? Do you see any slowdown or retraction of innovation because of the current landscape?
Gaillard: I think in 2021 innovation was put on hold when everyone fought to get the parts when they needed them. I think at the end of 2021 people started seeing the light and started putting more focus on innovation and it’s coming again.
Bonitati: I haven’t seen customers take their foot off that innovation throttle. I think when you’re talking about evolutionary changes they’re still moving forward, fast. But if you’re talking revolutionary changes – something that is not on the market today – that may take longer than it once did. Just because maybe the technology that is needed wasn’t as accessible as it was before.
MD+DI's Managing Editor Katie Hobbins contributed to this report.