05.25.06
High Tech, Low Cost: The Promise of Precision Machining
Orthopedic OEMs can lower production costs through streamlined machining operations and high-tech equipment
Ursula Jones
Contributing Writer
A machinery operator checks profile tolerance of a forged and machined uni-condylar knee. Photo courtesy of Tecomet. |
Whether the manufacturing is per-formed in house or sent to a contract firm, a variety of cost-saving techniques can be employed. State-of-the-art equipment, quality suppliers and just-in-time manufacturing are just a few of the strategies companies can use to shave precious dollars from their ongoing machining operations and stay competitive in today’s market.
In-House vs Outsourcing
One of the first decisions an orthopedic manufacturer must make is whether to perform this work in house or contract it out to a qualified machine shop. But the choice is not always cut and dried.
“Companies have different philosophies on farming it out or doing it themselves,” said Mark Saalmuller, marketing and communications manager for machining equipment manufacturer Tornos Technologies US Corp. (Brookfield, CT). Every company is unique and will approach this decision from a different angle.
Often it’s simply a matter of the type of processing required by the job. Many OEMs have some type of machining capability in house, but they may not choose to invest in specialty equipment such as chemical machining, gun-drilling or EDM systems. Ultimately, orthopedic companies will bring in house those operations that make the most sense in terms of efficiency and profitability, and outsource those that don’t.
The decision also can depend on the type of part being produced. Some OEMs prefer to contract out their less technical products while doing the rest themselves. “In some cases, our customers are offloading parts that are extremely difficult to make, or ones that are made of different materials than what they’re currently using in house,” noted Andy Mead, president of Micro Precision Swiss, a contract machine shop based in Rancho Santa Margarita, CA.
Saalmuller agrees. “If it’s an implant, a lot of companies are very selective,” he said. “They may choose to keep it in house—just from a liability standpoint—so they can have better control on the material, maybe better quality control on the part itself.”
Thread whirling with burr-free results is an attractive hallmark of a Tornos machine. Photo courtesy of Tornos. |
In addition to the machining work, orthopedic implants and instruments often require various secondary operations, such as deburring, ultrasonic cleaning, stress relieving, heat-treating, electropolishing, coating and passivation. Implantable devices also will need to be laser-marked to ensure part traceability. If the orthopedic company isn’t already set up to perform these processes, it may make sense to outsource.
Machine shops do one thing and one thing only. Thus, the level of expertise can be considerably higher than that of most orthopedic manufacturers. Suppliers employ certified programmers and skilled operators who know how to get maximum efficiency and accuracy out of each machine. “It’s important to have a workforce in place that understands the requirements and the technical aspects of the job in order to produce a quality piece,” Mead explained.
A good machine shop will work closely with the OEM’s engineers to take their thoughts and ideas and make a viable design. “Sometimes they [customers] need that almost impossible part, and we’ll figure out how to build it,” Mead said. “That’s where having the machines and the smart technical staff pays off.”
Another benefit to farming out machining work is that many contract machine shops have in-house tool-making capabilities. This allows them to handle special part configurations that can’t be produced with off-the-shelf tooling. Machine shops also tend to have state-of-the-art inspection systems in place, so they may be able to maintain better quality control than certain OEMs can.
Of course, a major factor in the decision whether to outsource is cost. “Suppliers generally can run with a lower overhead than the OEMs, and we specialize just in machining or manufacturing as opposed to trying to do it all,” Mead explained.
But by keeping much of their machining work in house, OEMs can maintain their own quality control and inventory levels, which in turn can lower costs. “Sometimes a supplier may not be able to respond as quickly,” noted Saalmuller. “But in some cases, the opposite is true. Sometimes a supplier can hop faster than a very large OEM can.”
For some, it may come down to a matter of control. “Tolerances are so tight that you don’t want to send anything out if you don’t have to,” says Al Lavezzi, president of LaVezzi Precision, a contract machining company based in Glendale Heights, IL. “You have more control if you’ve got it in house.
Finding the Right Machine Shop
Once an orthopedic manufacturer has made the decision to contract out its machining processes, it must select the right partner. Generally speaking, established OEMs prefer to work with a proven pool of existing suppliers rather than put their projects out for bid. But start-up companies will need to start from scratch.
A variety of factors must be considered. The most obvious criteria are quality, capability and capacity. Does the supplier have the equipment and experience necessary to produce high-quality parts? Having the latest technology on-site is critical for contract machine shops. Newer equipment tends to have better controls, which helps achieve higher tolerances. State-of-the-art inspection equipment is equally important.
“Quality continues to be the driver on many projects,” reported Sean Stowik, sales and marketing manager for Preferred Tool & Die in Shelton, CT. “Companies need assurances that quality systems and documentation are there. That will continue to be a driving force as to who is awarded these contracts. You have to have a proven track record.”
Mead from Micro Precision Swiss agrees. “A good machine shop will have the quality systems in place to control the raw material across the machine, do the appropriate inspections and control the outside processes necessary to develop a finished product,” he said.
Another important criterion is the supplier’s corporate structure. Machine shops with the financial backing of a large parent company have the advantage of being able to purchase additional equipment when extra capacity is needed. Smaller independent firms may not have that luxury.
Many OEMs prefer to use one supplier with a complete range of capabilities rather than ship their components to several different facilities. Suppliers that offer forging, casting, post-machining processes and even packaging services often have a distinct advantage over their competitors. “If they’ve got to bring in a part and then send it out for plating or marking, for example, it’s a hassle for the purchasing agent and also for his or her inspection department,” said LaVezzi.
Jean-Paul Burtin, vice president of marketing and international sales for Tecomet, based in Woburn, MA, added that, “It also helps to be able to offer the instruments necessary for the surgery as well as the delivery systems.” His company recently acquired a firm that manufactures surgical instruments so Tecomet can bundle the entire product for its customers.
“Once you do that, of course, you become bigger,” Burtin warned. “When you’re bigger, you become less flexible. You have to coordinate all the different operations that you have in different plants, which can sometimes create some gaps and problems.”
Many customers want their contract manufacturer to work closely with them during product development to ensure a robust design. “We will review the design for ease and cost to manufacture, work with the engineers to make any appropriate design changes and then produce prototype pieces for reviewing,” said Tom Zajac, sales and marketing rep for Alden Tool in Berlin, CT. “Orthopedic products are changing all the time and getting more complicated, so technical support is critical.”
In orthopedic manufacturing, time is almost always of the essence. Suppliers that can deliver high-quality products on time will be the most successful. “Many companies are working on projects for a long time, and when they launch they need it tomorrow,” said Stowik.
Al LaVezzi agrees. “Designs are constantly changing, and there is so much input from orthopedic surgeons, so manufacturers want to get something in their hands right away to show them that this is the product they should be using,” he said. “If a part has to be remade because it wasn’t done to specification and then has to be sent back and reworked, that really hurts [the manufacturer].”
More than ever before, orthopedic companies are ordering components in smaller batches and with shorter lead times to keep inventory levels low and reduce their costs. To meet this demand, machine shops are turning to just-in-time manufacturing models. “We used to get orders for 1,000 implants, but we don’t anymore,” reported Burtin. “We still get the same quantity or more per year, but now we get smaller orders.”
Keeping costs down is always a concern for OEMs, but it may not necessarily be the primary one. Its importance often depends on the type of product being manufactured. In highly competitive areas such as bone screws, cost is more important. The same is true for disposable instruments. But for more critical components, such as spinal implants, quality tends to be the driving factor.
Orthopedic parts such as these can be completely and accurately machined in one setup, without secondary operations. Photo courtesy of Tornos. |
Tweaking the product’s design often can lead to a significant cost savings. “We can help customers decide where they can open up their tolerances and whether a certain feature is needed, because that’s what’s driving their cycle times and their cost,” explained Bob Lamson, vice president of business development for MicroGroup in Medway, MA. “There are tradeoffs that people can make. Certain features may not need as tight a tolerance as they think, or in some cases they may not need a particular feature altogether.”
Investing in Equipment Can Pay Off
State-of-the-art machining equipment is another great way to achieve significant cost savings. Today’s machines tend to combine multiple processes into a single machine, which offers many benefits. “We offer multi-axis machines that are all independent,” said Tornos Technologies’ Mark Saalmuller. “That allows us to overlap operations so we get much better cycle times. We’ve been able to cut cycle times in half for some parts.”
Saalmuller noted that his company will help develop customized equipment for specific applications. One of his customers manufactures intricate lag screws used in hip-replacement surgery. “Most people use four or five different machines to make that one part,” he explained. “We sold some equipment recently by which the customer can make that part complete on a single machine.” Even though the process development took almost three months, Saalmuller said his customer was willing to accept that because of the ultimate cost savings.
The OEM also may achieve savings by expanding its machining operations to include what some consider a specialty process. For instance, deep-hole drilling (or gun-drilling) is a process that has typically been contracted out. But according to Neil Ryall, sales manager for gun-drilling equipment maker Kays Engineering (Marshall, MO), the process is much simpler than people imagine. He reported that this type of equipment can pay for itself in as little as one year.
“A lot of orthopedic companies are still contracting out this work,” Ryall said. “But contract drillers are expensive because they are specialists.” Because his equipment can be placed alongside other machines, labor overhead is minimal and OEMs can better control their lead times. His company will work with the part specifications to program the machine and perform part run-offs in his facility as well as the OEM’s facility to ensure proper setup. Kays Engineering will also perform contract services on a limited basis for companies that are considering investing in this type of equipment.
Orthopedic manufacturers are not the only ones that can benefit from state-of-the-art equipment. Contract machining companies that purchase newer equipment often pass the cost savings onto the OEM. Many machine shops are investing in sophisticated multitasking machines that can replace several pieces of equipment on the shop floor. By reducing the total number of machines needed to finish a part, the savings can be substantial. And by eliminating multiple setups, human intervention is eliminated and part handling is reduced. These machines can also improve the accuracy of the machining work by eliminating unnecessary work piece transfer.
Tecomet, for example, has purchased several Mazak machines that perform turning, milling and grinding on one machine. “With our Mazak equipment, we’re able to reduce the number of operators for a given pool of machines,” said Burtin. “We used to have one operator per machine, but now we have one operator for as many as three machines.” By reducing labor costs, his company can pass along those savings to their customers.
Ultimately, orthopedic companies have a number of options at their disposal for reducing their machining costs. But there is no one-size-fits-all solution. In the end, the most successful companies will be those that remain flexible and, therefore, better able to respond to the changing demands of this highly competitive market.