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Where medicine, manufacturing meet to expand area commerce
West Michigan’s medical device sector is at once new and old, small and large, and is ready to unite to garner notice from the larger market, according to the West Michigan Medical Device Consortium.
“West Michigan in general is a very positive place right now if you’re trying to develop a medical device company,” MedBio President Chris Williams said. “If you need something medical or biotech, the Grand Rapids area has enough companies that we can handle it, from the time you’re developing a concept all the way to the time you’re distributing your product.
“Just in the two associations we have here in Grand Rapids, there are people that do just design work, just consulting work, manufacturing, injection molding, metal work, electronics — all for the medical device industry — foams, adhesives, sterilization, assembly. The Grand Rapids area has the capacity to pretty much do anything — which is a little unusual.
Grand Rapids is an area where you can get everything done, soup to nuts.”
The WMMDC provides a platform for the wide variety of local companies in the sector to market themselves as a cohesive whole.
“The consortium members can create a virtual company,” said Linda Chamberlain, executive director of the West Michigan Science and Technology Initiative, which is home to the WMMDC.
At two years old, the WMMDC has 38 members and has exhibited twice at a major conference and exposition: Medical Design & Manufacturing Minneapolis.
“It’s the vision of the medical device consortium to be a nationally recognized resource for medical devices,” Chamberlain said. “The mission of the consortium, however, is profitable business growth. It’s all about business development and growing our local business base here.”
National marketing is out of reach for the many small companies that comprise the bulk of West Michigan’s medical device industry, Chamberlain noted. Together, their message is stronger, she said.
“The nature of the industry is much more of a small business supply basis, where having the resources to be able to market on a national level is a challenge,” she said. “The secondary reason why we sort of birthed the consortium was to be able to have a collective presence around the marketing effort for the smaller industry base in the region.”
Dean Smith is president and CEO of Specialty Heat Treating Inc., which has plants in Grand Rapids, Holland and Elkhart, Ind. The family-owned company was established in 1973 and employs 80 people, 35 of them in Grand Rapids.
Specialty Heat Treating provides a variety of processes for parts produced by the automotive, aerospace, heavy equipment, tool and die, metal stamping and medical device industries, using furnaces that get as hot as 2,400 degrees. While today about half of the company’s business is automotive, it used to comprise about 80 percent to 90 percent.
About seven years ago, when the handwriting appeared on the wall for automakers, Smith said his customers began to diversify.
“We saw a number of manufacturers in West Michigan begin diversifying their products into aerospace, medical, consumer products, heavy equipment,” Smith said. “We haven’t necessarily diversified our customer base; our customer base diversified the products they are doing. We’ve had to adapt.”
The medical device industry requires precise, small volume work, in contrast to the high-volume parts the company treats for automotive use, Smith said. Medical devices make up about 10 percent of the firm’s business, he said, but he thinks that could grow.
“The biggest challenge we personally have run into is breaking into a field that has historically been very protective,” he said. “There are a number of significant-sized manufacturers who have always done things the same way, used the same supply base for a number of years. For their own reasons, they are not real quick to change and adapt.
“Our biggest challenge, as a group of manufacturers, is to be able to get an ear with the end user — those that dictate what products are going to be made — and open their eyes to some of the manufacturing techniques we have available to them.”
Williams, meanwhile, said he is excited about the investment into Michigan Street’s Medical Mile.
“The amount of money that’s being poured into the area — we think there’s going to be a lot of opportunity coming up, and specifically opportunity being generated by some of the stuff happening on the hill. When money like that is being devoted to a community, it generates a lot of business opportunities, and I think that West Michigan is going to be a great place for medical device opportunity in the future,” Williams said.
He said that the business potential includes working with local doctors and other inventors to bring their ideas for new devices through development stages and perhaps even to manufacturing. The Medical Mile also provides ready market for locally produced devices that meet its special needs, he said. WMSTI and WMMDC both are working to formalize ties between local medical device businesses and the players on the Medical Mile, he added.
“The ability to have world-class facilities right in your backyard — that’s a concrete thing that you can go to right away as far as how can you help out companies in the area,” Williams said.
MedBio is primarily an injection molder, making disposable medical devices and items used in diagnostics. It provides secondary services as well, such as hot stamping, ultrasonic welding and assembly. Its customers are major manufacturers and Tier One suppliers.
Unlike Smith, who had to learn about medical devices from scratch, it is a sector that Williams knew. His family previously owned DLP in Grand Rapids, a manufacturer of cardiac devices that was sold for $128 million in 1994 to Minneapolis giant Medtronic. Williams purchased MedBio with his father and a third partner from founder Roosevelt Tillman about four years ago. The company employs 42 people in Grand Rapids.
“We knew the business and we knew how to operate in the medical device space,” Williams added.
MedBio recently purchased two new machines. One will allow the company to add liquid silicone injection molding to its thermoplastics processing capabilities. The second is used for precise measurements and puts the company “on the leading edge of technology for measurement capabilities.”
The bad economy has produced good prices for manufacturers from suppliers who are desperate for work, he added, ironically making the state more competitive in non-automotive manufacturing.
“We have, in particular, the ability to get tools built and things like that at an extremely competitive cost right now, because the Michigan economy is just hurting so badly that tool and die makers are very anxious to work with us,” Williams added. “Hopefully, the people that we work with are going to be around, because it’s a very tough environment for these folks right now.”
Keystone Solutions Group, a 20-employee firm with locations in Grand Rapids and Kalamazoo, added manufacturing to its consulting business about three years ago, said co-owner Mike Zamora. Keystone serves the aerospace and automotive industries as well as the medical device sector, while manufacturing is strictly in medical devices. Services include supply chain management, contract assembly, packaging, sterility management, logistics, warehousing, customer service and order fulfillment.
“We saw the need for contract medical manufacturing in the area,” Zamora said. “Over the years, we developed all these products and we were asked to quote the manufacturing, as well. In the past, we would turn it down. We realized we needed to be filling that need for those customers.”
He said that during 2010, Keystone expects to add 10 assembly and support staff jobs to the eight currently located in Grand Rapids.
Zamora said the decline of the automotive industry is an opportunity to let West Michigan’s other manufacturing sectors shine.
“One of the really key elements we have here is a very strong manufacturing supply base,” he said. “There is not much we can’t do here in West Michigan. We’ve got great suppliers, and a lot them are already used to doing medical products. This area is almost like a well-kept secret.”