Medical molders expect higher surgical device demand, supply chain reevaluations following pandemic shifts

Medical molders are seeing demand and supply chain trends shift again following the COVID-19 pandemic's impact on the health care industry and consumers' behavior over the last year.

After Vermont-based GW Plastics Inc.'s medical device production volume was negatively impacted due to elective surgeries being deferred last year, Brenan Riehl, president and CEO, told Plastics News, "hospitals learned how to treat patients safely during the pandemic."

Now, the company has started to see its surgical medical device business rebound.

"We think there's going to be a tremendous amount of pent-up demand for elective patient surgical care in the second half of 2021," Riehl said.

With 90 percent of its business in the health care marketplace, GW expects its diagnostics and drug delivery business, which saw increased demand amid the pandemic, to stay strong.

"We think there's going to be more emphasis going forward placed on diagnostics and drug delivery applications as a result of the pandemic," he said. "COVID-19 is likely to be around in some form or another for the foreseeable future.

"The health care business may not be recession-proof, but it sure is recession-resistant," he said. "But in this case, it was a pandemic, and how do you prepare for that?"

Charlton, Mass.-based MTD Micro Molding similarly saw a "pause" in orders for devices for elective surgeries from March until the fall of 2020, said Lindsay Mann, director of sales and marketing.

"These orders have returned to normalcy for the most part now," Mann added.

During the height of the pandemic, many people were fearful of going to a hospital or seeing their primary care physician in-office, Riehl said.

"I think we're going to see a shift to telemedicine and home care," he said. "There's going to be a need in self-diagnostic kits to support that shift. … I think the surgical space will see a greater adoption of robotics and minimally to noninvasive surgical techniques."

MTD also expects demand to increase for minimally invasive and point-of-care micromolding projects.

"Minimally invasive and point-of-care applications and devices go hand in hand as the intention is to get patients diagnosed, treated and fully recovered quicker and better than ever before," Gary Hulecki, executive vice president, told Plastics News.

Jeff Somple, president of Arlington, Vt.-based Mack Molding Co. Inc., said that even though the company expected "the worst" in 2020, it ended up having one of its "better years."

All of Mack's medical customers' orders increased, "in some cases, dramatically," Somple said.

"I think a lot of the customers were hedging their bets on the supply chain," he said. "Missing one plastic part could stop them from shipping a complete unit, so they were being safe and ordering a lot of parts."

It's "hard to know" if any of Mack's medical production increases will continue over the next couple of years, Somple said.

"Customers who built up stock to mitigate any pandemic-related disruptions may reduce their demand after reaching what they feel is a healthy surplus," he said. "Others may reshore more work, leading to increased demand."

"One of reasons Mack got into medical devices is because of its stability," Somple said. "There will always be work there, and I do not expect that to change."

Mack's medical production is its largest market segment, at about 35 percent.

"While we may see small fluctuations in either direction at any given time, we have diversified the markets we work in, in order to prevent significant swings in any one sector from destabilizing the business. This has held true even during the pandemic," Somple said.

As the pandemic made accessibility to the cross-border supply chain more challenging, OEMs and suppliers needed to find a more strategic and sustainable balance between performance and price, Riehl said.

"It shed a light on the fact that in the U.S., in some sectors, we were overly reliant on foreign supply sources and I think that's going to shift more towards the domestic model … with suppliers being geographically closer to customers," he said.

Although it's important to have a diverse, global supply chain, Riehl said, there will "likely be a re-evaluation of the importance of strategic supply chains … tilting the scale perhaps more to a focus on accessibility, agility, trust, performance and innovation vs. price."

"Those OEMs who continue to focus just on price will run the risk of losing supply prioritization during the next crisis," he said.

GW, which was acquired by the Nolato Group in September 2020, avoided supply chain issues by ordering ahead of personal protective equipment and materials shortages after it saw the effect of the pandemic on its operations in China.

Being a global company, Riehl said, "gives you a window into the world in terms of having an advanced look at emerging trends, both good and bad."

"Given the need for innovation and the capital-intensive nature of the contract manufacturing business, we're likely to see more strategic partners with OEMs as companies need scale and access to capital to compete on a global but local basis," Riehl said.

MTD saw non-COVID-19-related growth over the last year as it invested about $2.5 million to double its manufacturing space and added designated areas for assembly and packaging services, Hulecki said.

"The pandemic threw some wrenches into the construction process, understandably," he said. Construction of the expansion, which was supposed to be completed in July, did not finish until November.

"From materials and supplies to equipment, we have experienced delays with almost everything and are still experiencing these delays," Hulecki said. "Being flexible became key for 2020 as all timelines and planning for the expansion changed."

MTD is receiving more requests for custom assembly, final packaging solutions and more complex overmolding projects that can eliminate assembly operations, Hulecki said.

"We expect to see a continuing need from our medical device customers for a single source provider for their smallest, most critical implants and devices," he said. "The days of bulk packing tiny parts are becoming a thing of the past. We needed more space to handle the logistics of finished devices, as custom packaging solutions for our customer's parts are becoming more of a requirement for doing business.

"In the past, all of our clean room space was dedicated to our molding machines and part collection systems, with parts being bulk packed and shipped to our customers after inspection," he said. "With our shift towards finished devices, we have had to make changes to the workflow through the clean room."

The company "had been nearing capacity" in its existing footprint for a while, he added.

It is also seeing more requests from its customers to place products directly into finished packaging from the end-of-arm tooling (EOAT) that extracts the part from mold, he said.

MTD completely reformatted the way its molding cells are set up "to allow us the ability to add custom trays, gel packs or even using an auto-bagger to bag and seal the parts in desired quantities directly off the EOAT," he added.

Before the COVID-19 pandemic hit, Somple said he didn't always know what market some of Mack's products ended up in. As customers shared with the supplier that their business was essential last year, he learned some of its products went into ventilators, respirators, air purification units, pharmaceutical manufacturing, diagnostics and testing, and even battery cases for backup power supplies for hospitals and other health care sites.

"We were really surprised at the wide variety of products we're making that were really important," Somple said. "In a bizarre way, it was a good year — something we can all feel good about."