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Cost-Cutting Trends Impacting Medical Molders


WESTLAKE, OHIO (April 20, 1:30 p.m. ET) -- Although the financial impact of health-care reform legislation on U.S.-based medical plastics manufacturing is unclear, it will fit into a long-term pattern of cost-cutting already underway in the industry, two experts said at the Plastics in Medical Devices 2010 conference.


“The key [to low-cost manufacturing] is operational excellence. The key is driving costs out of the system.” Tom Houdeshell, president of Atek Plastics of Kerrville, Texas, said in an April 14 presentation at the event, held April 12-14 in Westlake.


Atek Plastics, which has 30 injection molding machines of 45 tons to 1,000 tons, has had 100 percent on-time deliveries of its medical, consumer, automotive and industrial parts for four years running, and in 2009 shipped in excess of 150 million parts with a defective parts per million rate of 16.7, Houdeshell said - thanks to investments in automation and decoupled, systematic molding.


Through computer monitoring, Atek Plastics has realized labor savings, better quality and repeatability of its processes, lower costs (including in mold repairs) and optimized inventory control — with data that can be tracked over time, he said. Chris Oleksy, president of molder Atek Medical of Grand Rapids, Mich., - a sister company to Atek Plastics — said in an April 14 speech at the conference that his firm likewise invested heavily in automation and has managed to keep jobs in North America.


“There’s a tremendous amount of jobs to keep in this country, by being able to automate [production] and take [labor] costs out of these devices,” he said.


Atek Medical produces Food and Drug Administration class I, II and III disposable, implantable, and electro-mechanical medical devices at plants in Grand Rapids and Heredia, Costa Rica. It has projected sales of $78 million for 2010 and employs about 375.


Oleksy said in his 25 years in the medical device industry, he has seen a shift in patient care away from therapy-focused treatments to procedures that are aimed at reducing costs: “Clearly, it’s no longer as it was 25 years ago, where the primary focus was thinking about inventing new therapies; it’s clearly shifting more and more to how we do it more efficiently, cheaper, etc.


“This doesn’t mean that there’s therapies and product leadership and innovation and things that need to take place. Clearly there are hundreds if not thousands of technologies that have yet to be invented,” he said.


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