Pandemic-prompted reshoring creates growth for medical injection molders

Detroit — The COVID-19 pandemic is still affecting trends for medical injection molders as their customers continue to reshore manufacturing due to supply chain interruptions and require more design support for new medical components and products.

"So much of the business is trying to come back to the United States from China," Megan Tzanoukakis vice president of supply chains at Sussex IM, said at the Injection Molding & Design Expo in Detroit. "We're seeing it in a lot of the large programs we're bidding on now.

Companies want a "shorter supply chain," Tzanoukakis said. "They don't want volatile freight cost and lead times."

After supply chain interruptions from the pandemic, companies are prioritizing "reliability," she said. "If [the product is] stuck on a boat waiting to be unloaded, you're not making any money. Especially for seasonal products if it has to be in the store at a certain time. Our customers are willing to pay a little more to have that reliable supply."

"We're seeing some … reshoring," Christian Herrild, director of growth strategies for Teel Plastics LLC, said during the expo. "We're also seeing where some programs seem to be reaching a kind of end-of-life phase. They're quoting [the projects] differently or quoting replacement parts that are — or can be — made locally or domestically, and not just trying to get the same thing in a low-cost-of-production country."

During the pandemic, Herrild said, companies found "that low cost might be fine in a status-quo, no-issues kind of environment," but, "by the time you add in supply chain disruptions, shipping costs and the possibility of material availability going down, if there's engineering issues or quality issues … as soon as something goes wrong, there's added cost and time.

Companies were already starting to reshore manufacturing before the pandemic, he said.

"My feeling is the pandemic sort of collapsed what was probably a five-to-seven-year trend to a two-year trend," Herrild added. "That's not to say everything is going to come back. But the default position of manufacturing outside the U.S., for some of the larger players, seems to be going away."

"A lot of our bigger customers are localizing their facilities as well," John Budreau, director of new business at PTI Engineered Plastics Inc. said during the expo. "It makes sense to manufacture [domestically] and stop shipping things, increasing the global [carbon] footprint for what might be an attractive early price."

Its customers are also requiring design support "early on," Budreau said.

Staffing PTI with skilled management and quality engineering teams is intregal to "being able to maintain" the rigorous validation process required for medical injection molding, he added.

The company also incorporated "collaborative robots" and "inspection methods … to minimize the validation process," Budreau said.

Adding automation can help customers save money when they choose U.S. manufacturing, Tzanoukakis said.

Automation also offers more high-skill jobs rather than "just putting parts in a box," she added.

"You have to have a team that can work in both … quality systems and engineering. Especially from the beginning, when the design starts, so that it's a product that can be injection molded. It has to be designed for engineering."

"Now that you can collect all of this data off of [production] lines, more customers want to make quality or measurement statements," Herrild said. "That requires a different skillset from the engineering and operator's side than it would have been just picking up parts and putting them in a box, or just slapping labels on things."

The pandemic also created opportunities for the industry to make "new, different parts … like test kits, that were never being made before," Tzanoukakis said.

"The pandemic took people a little bit by surprise, because they thought that what the medical field was capable of or had available for diagnostics testing was well beyond what the reality of the situation was," Herrild said. "One of the Superbowl commercials was for a [COVID-19] diagnostic test kit. I don't think anyone would have guessed that, even two years ago, that would have been primetime commercial material."

Teel Plastics is still seeing growth in diagnostics, he said, after the company expanded production and was given funds from the U.S. Department of Defense to make COVID-19 test kit swab sticks amid the height of the pandemic.

Customers are also expecting medical injection molders to have faster speed to market, Herrild said.

"They're interested in getting products approved more quickly and getting materials developed more quickly," he said. "Things that used to take 18 months or more to bring to market, [are now being brought to market] within 6 months or less. Our feeling is that trend is going to continue."

That speed will require "more use of larger teams and concurrent engineering," he added.