What SSP Learned at MD&M West 2019
Specialty Silicone Products (SSP) recently attended MD&M West 2019, the world’s largest annual event for medical device manufacturing. From February 5 to 7, 2019, we met with companies from across the medical device supply chain who were eager to talk about product development, manufacturing, and materials. In case you weren’t able to join us, we’d like to share what we learned at this industry-leading tradeshow in Anaheim, California. The lessons fall into three major areas.
Compliance and Contract Review
Medical device manufacturers told us that compliance and contract reviews are bottlenecking projects. Small but flexible companies who can usually turn-around samples quickly can’t get started because of these issues. Part of the problem is that many smaller manufacturers don’t have a full-time compliance department. These medical device companies then ask employees who are already busy to review terms, conditions, contracts, and compliance-related requirements.
Some larger companies also issue purchase orders with as many as 10 pages of P.O. terms. This places a heavy burden on smaller suppliers who need to meet all of these conditions. Salespeople at these firms work hard to win orders, but their own companies can create wait times that make customers question the supplier’s reliability. Larger companies may also send smaller firms one-sided NDAs that place all of the risk on the smaller business. Complying with REACH, RoHS, and Proposition 65 can also be challenging.
Silicone Supply and Pricing
At MD&M West 2019, medical molders and die cutters expressed frustration with the global shortage of silicone rubber and the price increases that have ensued. The silicone shortage isn’t new, but there doesn’t seem to be an end in sight. The recent declaration of force majeure at a Wacker Chemie A.G. product line in Germany underscores the scarcity of silicone in today’s global markets. Even with the addition of more manufacturing capacity in the United States, the medical device industry is concerned.
Is there any good news on the horizon? Wacker, one of the world’s largest silicone suppliers, has announced plans to raise capacities by about 40,000 metric tons each year through 2021. Dow Chemical Co. is also planning to invest more in its silicones business over the next few years. Still, it’s important to remain realistic. As SSP’s president, Paul DiCaprio, recently told Rubber & Plastics News, “It is a 12–24 month lead time from when investment begins to hit the market, so it will not help much in 2019.”
Skilled Labor Shortage
Finally, the skilled labor shortage was a frequent topic of conversation at MD&M West 2019. Unfortunately, “ghosting” isn’t just happening when a job candidate agrees to an interview and then never shows up. New employees are also becoming no-shows after reporting to work for a few days. For medical device manufacturers who need to meet red-hot demand, getting this cold shoulder can be frustrating.