ANAHEIM, Calif.—It's no secret, health care costs are rising.
And a byproduct is more pressure to reduce costs throughout the supply chain.
Hospitals, clinics and doctors' offices are looking for ways to mitigate rising costs everywhere, including through its network of original equipment device manufacturers. In turn, suppliers to those companies feel it too.
It's a primary reason why the landscape has changed so drastically among suppliers during the last few years.
"There's only so much you can do in terms of manufacturing processes, so OEMs are looking to consolidate their supply chain," said Drew Rogers, global director for medical at Trelleborg Sealing Solutions. "One OEM we deal with had been working with more than 350 different suppliers, they were given a mandate to cut that down to 50."
Rogers knows better than most, as immediately prior to his current role with Trelleborg he was part of a company called Specialty Silicone Fabricators, a producer of high-precision silicone components for the medical industry.
SSF gave Trelleborg plants in Paso Robles, Calif., and Elk Rapids, Mich., that brought very innovative processes for complex drug-device combination processes. Trelleborg brought a global manufacturing footprint, scope and diverse polymer technologies that SSF lacked.
The combination has proven fruitful so far. Trelleborg/SSF does assembly, packaging and sterilization for medical devices. On the upstream side, Rogers said Trelleborg brings a mastery of supply chain management.
"The survivors still have to provide more of what they do," Rogers said. "It's fortunate for SSF that it was acquired by Trelleborg when it was. Even though SSF has really high grades for quality and innovation, as a one-off supplier of silicone they may have been a supplier that got left in the dark. But now that we're leveraging all of that within Trelleborg, we have a lot more to offer and OEM customers are recognizing that."
The phrase 'one-stop shop' has been used to describe the current trend of suppliers joining forces to add capabilities.
Some of the recent deals include FMI L.L.C.'s recent acquisition of Medron Inc. in December 2016 to enhance the silicone manufacturer's presence on the thermoplastics side. It also added outsourcing services such as high-volume manufacturing, customer private label capability, design engineering, product development and prototyping. It works with a variety of materials, primarily urethanes, silicones and thermoplastics.