This page is a new feature on our website. Its purpose is to turn the spotlight on the practices and challenges being faced on a daily basis by various TMTA member. It will feature a different TMTA member company every month or so.

Our first featured company is Southmedic, a new TMTA member who joined the Association early this spring. The article being quoted is taken from the April 2008 issue of Canadian Plastics Magazine.

By: Umair Abdul, Assistant Editor to Canadian Plastics Magazine

Southmedic turns 25

Working as a nurse in cardiac and trauma units, Lee McDonald witnessed firsthand an urgent need for a solution. At the time, the anesthesia machines included a manifold capable of accommodating two mounted canisters. But when the drug companies added a third vaporizing canister, there was no room left for interlocking.

McDonald noted that interlocks were needed on vaporizers to control the delivery of volatile anesthetics to the patient. She got to work on what would become the Anaeslock, a patented vaporizer interlock system. McDonald outsourced her new project to a local machine shop, but quickly realized that she wouldn't be able to go it alone.

"In medical, you can't sell to hospitals without incorporating, you can't sell to hospitals without Health Canada approval, FDA registration or a formalized process," she explained. "Individuals cannot sell medical devices to hospital operating rooms, corporate registrations are needed." McDonald's new company, Southmedic Inc., was incorporated in 1983. And the rest, as they say, is history.

The importance of being clean

The company, which turned 25 years old this March, now operates out of a 60,000 square foot facility in Barrie, Ont. and employs 110 people. McDonald has grown the company from its humble beginnings, and Southmedic now consists of three divisions. The manufacturing division produces Southmedic's proprietary products and offers third-party medical contract manufacturing services.

The company's Canadian distribution division specializes in the sale of Southmedic's products and other third-party operating room products represented by the company. Additionally, the research and development division focuses on innovating and bringing new products to market.

Southmedic's Barrie facility includes three cleanrooms and 15 production lines, with molding machines ranging from 35 to 300 tons. Since the company specializes in products for the medical, drug and personal health industry, McDonald notes that sterile and controlled environments are of the utmost importance.

The cleanrooms are specially engineered to have a lower particulate count -- or, in simpler terms, the level of microscopic dust on the part -- in order to meet sterilization and clean room standards. The stringent requirements also mean that operators have to be careful about what they add to the environment.

"You wouldn't put cardboard inside a cleanroom," explained McDonald, noting that the fibrous particles would pollute and add to the bio-burden count in the environment and subsequently on the parts. "And you wouldn't keep older [injection molding] machines in the cleanroom." Mold lubricants also require specific attention to avoid particulate generation through degradation.

Lean journey

Given the nature of its business, Southmedic mostly works with polymers with ultra hardness, high performance characteristics and flame retardancy. Aside from the complex requirements and standards, McDonald says medical manufacturing operates on a different business model than the mass customization many molders have become accustomed to.

"Contrary to other industries, medical molding tends to be low volume, high diversity," she said. "Most medical parts are manufactured in a number of sizes and often colour-coded, requiring many tool changes in a shift." The low volume nature of the business also changes the way you measure the organization's leanness. Southmedic began its lean journey last summer. By focusing on the value streams of its business, Southmedic was able to identify waste within its various operations.

A focus on 5S and reorganizing of the workplace was undertaken, and the manufacturing process was moved from a "batch and store" operation to "one-piece-flow" over a period of six months. As well, low level error proofing was implemented in Southmedic's assembly processes.

The result has been dramatic: despite reductions in working capital, on-time delivery levels have improved along with improving end item quality. The improvements in local efficiencies have also resulted in a more competitive cost model that has allowed Southmedic to shrug off a lot of the economic impact associated with U. S. dollar movements and compete head to head with offshore manufacturers.

Regulated industry

In comparison to slowdowns and production shifts in markets like the automotive sector, McDonald says the medical segment is relatively stable. For one, many of the standards relating to medical products are internationally accepted, making it relatively easier to sell to foreign markets. (Southmedic's products have been exported to more than 60 different countries.)

"Your ebbs and flows are somewhat controlled -- products are long lasting and do not undergo frequent changes to avoid the need for new regulatory filings worldwide...we still have products that we ran here in 1985," explained McDonald. "Regulations worldwide are identical, you have a longer shelf life for a product, and you have a much broad diverse marketplace."

But as an industry veteran, she also warns processors from jumping at the opportunity without a second thought. McDonald says people should familiarize themselves with the industry's standards and the medical sector's lexicon before making the case for medical work.

"One of the things that happens in medical is that it is very regulation intensive. You can't turn around tomorrow morning and decide to be in this industry without the required national registrations," she argued. "There is a whole language, a whole infrastructure of market and end use. It really is its own industry."

Now in its 25th year, Southmedic has no plan to slow down its momentum. McDonald says the company's innovation division is at work on new patented Open Oxygen Systems, and the distribution division hopes to continue to expand.

This article is quoted from the April 2008 issue of Canadian Plastics Magazine.