Hamme recently retired from medical device manufacturer BD, number 332 on the Fortune 500 list, where he served for more than 20 years in various procurement roles. He spent the last 14 years at BD as Global Strategic Sourcing Manager, responsible for managing capital equipment purchases and sourcing strategies at all captive BD plastic injection molding operations worldwide. In other words, he knows the medical device business inside out and has a keen sense of what contract molders need to do to keep their medtech customers satisfied. Here are four key areas to keep front of mind.
Make a difference
Medical device companies are bullish on differentiating their brands and product lines, said Hamme, "and they are looking to suppliers to bring ideas to the table." Materials can play a significant role in achieving differentiation, he added. As examples, Hamme cited combination products that use polymers as drug carriers, antimicrobial compounds, and nano-scale reinforcements to enhance the physical properties of polymers. Innovation and creativity will get you a seat at the table.
While pricing is no longer the single-most important selection criteria for choosing a supplier—quality, service, and reliability also play significant roles these days—medical device companies are wrestling with cost containment issues, and contract molders can help. High-cavitation molds, fast cycle times, and thin-walled parts, resulting in less resin usage, are ways to bend down the cost curve, said Hamme.
Be the best that you can be
Supplier rationalization programs—in many cases, a euphemism for reducing the number of contract suppliers—have been popular in all industries since the 1990s, noted Hamme. "Some companies, especially in North America, have reduced their supplier base by as much as 90%," said Hamme. "At BD, we went from around 20 to four preferred mold suppliers." This trend will continue, Hamme added, albeit at a more modest rate. How does a supplier make it to the final four? Simple--know what your customer wants and deliver it.
Foster a real partnership
The term partnership has a negative connotation among suppliers, acknowledged Hamme, and for good reason. For procurement professionals, it can be viewed as a way to get better deals without reciprocation. "We had a tremendous partnership with Engel when I was at BD," said Hamme, "with great access to senior management. I wonder if Engel had the same level of access to BD's senior management?" he asked with a wry smile.
The key foundations of a true partnership are trust, time, and mutual benefit, with the understanding that it won't be an evenly split win-win. "One party may benefit a little more than the other," said Hamme, and that's fine as long as the ratio is not wildly off kilter.
Never underestimate the value of communication, he added, not just to exchange information but to share in the decision-making process.
Of course, the ball is in the OEM's court on that one.