Anaheim, CA—In response to customer requests and the market’s strength, Jabil Circuit will expand its reach into the medical market, creating a single-use device (SUD) business unit. Making the announcement at Medical Design & Manufacturing West (MD&M; organized by MPW parent Canon Communications), Tony Allan, Jabil’s VP global business units, told MPW that his company’s existing exposure to medical has increased since 2000, with annual revenues from the sector growing from $24 million at that time to $800 million today. As a whole, Jabil’s revenue is $2.4 billion, with the remainder coming from its electronics manufacturing services (EMS).
In addition to offering medical electronics customers a single-source supplier, Allan says Jabil can provide competitive pricing. “Part of what [our customers] were looking at were guys in the existing supply chain,” Allan said, adding that the company’s Asian presence, greatly expanded with the 2007 acquisition of Taiwan Green Point Enterprises Co. Ltd., allows it to “offer customers significant cost reductions.”
At the time it closed, the purchase of Green Point for about $880 million gave Jabil nine Asian plants, seven in China and one each in Taiwan and Malaysia. The new SUD unit will have facilities in Malaysia, China, Austria, and Ukraine, as well as Mexico through a partner. The molding sites in Malaysia and China are ISO 13485, and the company also has ISO 13485 design centers in Shanghai and Austria. The Asian SUD sites cover 500,000 sq ft and run “hundreds” of machines, according to Allan. In Europe and the Americas, the SUD sites are around 100,000 sq ft. All sites have toolmaking capabilities with some 200 tooling engineers company wide.
Allan said SUD’s goal is a mix of exports and supply to local markets, with plans to use acquisitions to expand reach, particularly in Europe. Allan said that as a company, Jabil has enjoyed 15% growth, with medical expanding by 35% last year, down from 50%. In spite of broader difficulties in the economy, Allan believes outsourcing gains momentum in difficult times. “The outsourcing model sells better in a tough economy,” Allan said, explaining that OEMs will examine all their fixed costs and develop ways to reduce them.
Gaet Tyranski, business unit director for medical, estimated that only 10% of SUDs are outsourced at this time, leaving substantial room for growth. “It’s not the same as PCs and TVs that are all outsourced today,” Tyranski said. The company plans to apply the knowledge of finishes, thinwall design, and inmold decoration gained from electronics work, particularly mobile phone housings, to the SUD market.
Jabil claims 20 years of medical design and manufacturing experience, bolstered in 2004 with the acquisition of Varian Electronics Manufacturing. The company says it designs, assembles, tests, fulfills, and services electric, electronic, and electromechanical assemblies for more than 25 medical and instrumentation OEMs, including patient and cardiac monitoring systems, as well as ventilators, dental equipment, in vitro diagnostics, oncology therapy, and mobility products. —[email protected]