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Business Review Western MI
Business Review Western MI
Medical Devices
(2007-09-26)
(wgvu) -
Med devices pose opportunity, speakers say


Sept. 27, 2007

By Mark Sanchez
marks@mbusinessreview.com

Breaking into the medical device business isn't easy, though it is a
way for manufacturers to diversify and can occur if you offer a niche,
local industry players say.

Carving out a role in the industry doesn't mean you have to design
and develop your own medical device, speakers said during a panel
discussion last week in Grand Rapids.

Possessing a niche expertise in a specific stop along the manufacturing
chain can get you started, speakers said at the IGNITE Great Lakes show
put on by the Society of Manufacturing Engineers.

A manufacturer can carve out a role in the industry as a component or
service provider via engineering, prototyping, machining, fabricating,
injection molding, assembly or subassembly.

You don't need to enter with the latest widget, said Ron
Williams, president of MedBio Inc., a contract manufacturer, precision
molder and assembler in Grand Rapids. You can have a solution looking
for a problem. You have to go out and identify those needs.

Automotive suppliers, for example, can use their core expertise in a
number of disciplines to find a role in medical devices, said John
Bucham of Autocam Medical, a division of Kentwood-based Autocam Corp.

Expertise in lean-manufacturing technologies and quality control are
areas that transfer to producing medical devices or components, Bucham
said.

Those are things you can bring to the table, he said. You can
leverage that automotive capability to find space in medical.

Autocam got into the medical-device industry in 1992 through an
acquisition and expanded the business with the 2006 purchase of Sager
Precision Technologies, a maker of components for orthopedic and medical
devices and semiconductor manufacturing equipment.

The deeper move into medical devices stemmed from examining how Autocam
could use its core expertise to diversify, Bucham said.

Medical-device work accounts for 10 percent of Autocam's $380 million
in annual revenues, Bucham said. The company aims to grow that to 25
percent within five years.

Medical devices were an estimated $155 billion industry in 2005 and is
growing at a rate of 15 to 20 percent annually, according to Linda
Chamberlain, executive director of the West Michigan Science & Tech
nology Initiative. More than 15,000 companies in the United States are
involved in the industry, she said.

As Michigan makes the difficult transition to a knowledge-based
economy while the domestic auto industry declines, medical devices offer
significant long-term opportunities, Van Andel Institute Chairman and
CEO David Van Andel said.

Michigan's manufacturing expertise gives the state a leg up on others
targeting life sciences as a major economic sector, he said.

We really have the ability to get through this better than anybody
else, he said, urging a mix of old-fashioned risk-taking and
entrepreneurism to take advantage of a growing market demand that's
driven in part by aging baby boomers.

There's a lot of opportunities in that new economy for traditional
manufacturers if they get out of their comfort zones and go after these
opportunities, Van Andel said. Someone has to make these things,
someone has to supply these things and whoever steps up to the plate is
going to be rewarded.

Market entry can come at a vari ety of points, panelists said, such as
becoming a component supplier, service provider, assembler or
distributor. Among the options to pursue are joint ventures and
acquisitions, speakers said, though companies need to make sure they
fully research the business opportunity and secure the right talent to
lead the initiative.

It's taking a step back and really defining your strategy and then
identifying what that's going to do to your business, Chamberlain
said.

Finding the right niche at the right production volume that fits your
capabilities is key to entering the medical-device business, Williams
said.

Companies that have done all their homework and researched their
potential in the industry should not proceed passively, said Todd Grimm,
president of Rose Technologies Medical Manufacturing in Grand Rapids.

Don't walk into it charge the hill, Grimm said. Don't
just stick your toe into the water. Go after it.
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