BB&T Contributing Writer
GRAND RAPIDS, Michigan — With a goal of doubling sales volumes over the next five years, seven manufacturers of medical device components in the Grand Rapids area have unveiled a consortium to collaborate rather than compete for contract production and outsourcing for original equipment manufacturers (OEMs). The founding members of the newly formed West Michigan Medical Device Consortium (WMMDC) collectively account for more than $100 million in annual sales, Linda Chamberlain, executive director of the West Michigan Science & Technology Initiative, told Biomedical Business & Technology.
She said another 15 medical device manufacturers in the region, representing another $150 million in sales, were “knocking down our door” to sign the charter agreement hammered out by the founding companies.
WMMDC members, based in Grand Rapids or surrounding communities, are ATEK Medical, Autocam Medical, Emerald Medical Devices and Supplies, Inrad, MedBio, Cascade Life Solutions and Surge Medical, all privately held. Company executives say the cooperative business model holds a potential to capture up to $500 million in sales over the next three to five years, she said.
Autocam and Cascade, are offshoots of companies better known as suppliers of components to the automotive industry who in recent years have diversified manufacturing as that industry continues a downward spiral of consolidation. Most other consortium members also generate significant sales volumes through automotive design or machining in a region that relies heavily on manufacturing as a base of employment.
Tom O’Mara, executive VP of Autocam, said, “The advanced skills in lean manufacturing, continuous improvement and cost-effective processing can be competitive with any region, both nationally and internationally.”
“Being competitive in the global marketplace means cooperation between businesses,” said Dr. Martin Zagermann, director of the competence center program.
Two of the WMMDC members are spin-offs from device behemoth Medtronic (Minneapolis), which is a key customer for several companies in the region. In 2003, ATEK acquired Medtronic’s cardiac surgery plant located here, and Inrad, a manufacturer and distributor of devices for the radiology and biopsy markets, was divested from Medtronic in 1997.
Another core business base for WMMDC companies is Stryker (Kalamazoo, Michigan), located an hour south of Grand Rapids.
Two consortium members, Cascade and Surge, already cooperate through a joint venture for the design, development and distribution of cardiovascular surgical tools, emergency service products and medical accessories.
The initial focus for the consortium will be winning contract manufacturing and outsourcing programs for medical device components, Chamberlain said. With an expanded footprint of capabilities and cooperative agreements, the consortium initially will approach major neighboring OEMs such as Baxter International (Deerfield, Illinois) and Cardinal Health (Dublin, Ohio) to meet the shared objective of doubling business volumes, she said.