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10 to Know

Industry trends owners should know

Karl Freimuth: Let’s shift gears to talk through risk from each of your perspectives. The medtech industry continues to grow at a rapid pace with aging demographics, international competition, an evolving regulatory environment, and rapid technological development from a device and a component perspective. That introduces opportunity and risk in managing your respective businesses or investments. How do you manage the key risks in your business?

Chris Witham:  The thing that keeps me up most at night is a lack of available skilled labor. I would highly recommend if somebody doesn’t want to attend college to learn a skilled trade. You will have a job forever. I truly believe that. Our company does very unique things. We don't have other competitors in the area that we can draw talent from. So we have to train every single person that walks in the door. I had a conversation with a gentleman last week who is running a robotics program and he talked about a 16-year-old kid who joined the program and he had never held a screwdriver in his life and that is a problem. That's a true story. So that's where we struggle is to find people who have a mechanical aptitude to be able to do what we need to have done from a technical standpoint.

In addition, regulatory headwinds also represent a risk factor. Drastic changes in policy or the ability to get products to market based on uncertainty or variation like we're seeing in Europe –requiring additional verifications and validations which constantly changes our product development process.

Hunter Craig: The regulatory environment is only intensifying and that's something we are certainly evaluating at the board level.  We are hiring incremental quality personnel across the Resonetics organization to keep up with the evolving regulatory environment.  In addition, we are constantly evaluating customer product concentration. We're always trying to manage product concentration risk and make sure to avoid getting too beholden to any one customer or program. 

Steve Sundberg: I think the risk for a midsize CMO is not keeping up with regulatory and technological changes. If we get stuck in the trap of doing it lithe way we always have, we’re dead. We’ve already talked about the need to increase numbers and upgrade the talent of our quality & regulatory organizations, but I see the same needing to be done in the engineering ranks, as well. In many cases, the OEMs do not have the talent in house to understand how best to manufacture their product. 

Devices are becoming more complex. We are making instruments today with tolerances much tighter than we’ve ever seen. This requires us to have the technical talent on our side to better consult and guide the OEM in Design for Manufacturability, to create the strategies for manufacturing the product, and finally the skills to determine how best to inspect the product. We have transformed our company from being a job shop we built to print, into a medical device manufacturing firm that has the technical talent to interact with the customer as a valued partner in their commercialization strategy.

Karl Freimuth: Additive manufacturing tends to be a hot topic in the advanced manufacturing circles versus traditional subtractive manufacturing methods. How do you view additive manufacturing as a risk, and similarly as an opportunity for your business? 

Chris Witham: With the type of process capabilities that we have, additive manufacturing is on my radar, but quite honestly, I don't view it as a risk. As far as 3D printing, it is actually a benefit for us from a tooling standpoint. It all comes down to customer satisfaction and customer satisfaction for us is driven by speed. We can drive speed by some of the latest technologies out there where we can make a tool or a fixture on a printer versus going through our tool room.

Kevin Cordero: It is a very big focus and a big opportunity right now. The customer is looking for personalized medicine and patient-specific types of implants that we create now. But newer manufacturing processes can allow for newer innovations and efficiencies in both design and production.  3D printing has been talked about a lot. I think there are going to be applications that are very well-suited for additive manufacturing and then there are certain areas that it really won't make inroads; in particular, surgical situations where the time to manufacture an implant doesn’t meet the urgent need for intervention or where the cost compared to alternative standard implants can’t be justified.

Topic II

Risks facing medtech

Panel topics

Medtech industry consolidation

Risks facing medtech

Medtech growth opportunities

Market conditions & outlook

Outlook for the sector

Topic I: Medtech industry consolidationTopic II: Risks facing medtechTopic III: Medtech growth opportunitiesTopic IV: Market conditions & outlook

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