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Supply, Cost and Quality Lead Concerns among Raw Materials Providers

Concerns about availability, cost containment and quality will likely surface in conversations between OEMs and material suppliers in 2016 as uncertainties continue over supply and demand, top-down price pressure and enhanced regulatory scrutiny. These are generalities—starting points, if you will, in the conversations to come regarding materials.

BONEZONE reached out to the 27 raw material companies exhibiting at OMTEC 2016 to identify what you should be aware of as you embark on your R&D initiatives, as well as important follow-on topics influencing this portion of the supply chain. Three themes arose from an array of materials suppliers: inventory, pricing and quality. Here’s what they had to say.  

On inventory and availability:

Bill Brebrick, U.S. Sales Manager, Zapp Precision Metals: Regarding [increased demand for] localized manufacturing, we have some OEM customers that are seeking suppliers located within their same geographic region. The aim is to be able to reduce delivery times and provide a higher level of customer service.

Michael Kell, Business Development Manager, Total Plastics: Stocking locations for polymer/plastic materials could be beneficial to orthopaedic OEMs this year, as demand [for polymers] is on the rise. Availability will be the key issue as several materials have changed from a supply standpoint, most notably Celcon M25, the medical grade acetal copolymer from Celanese. Many of the colors they produce now require high minimum orders, and some diameters of rod in these colors are becoming scarce. 

Mary Moynihan-Downes, Marketing Director, Titanium Industries: We have seen some extended lead times for a select segment of our raw material products. I suggest that the supplier and manufacturer maintain an open line of communication with information flowing both ways, so as changes occur—either on the supply or the demand side—both have an opportunity to react.

Dennis Rahill, Medical Products Manager, Vulcanium Metals International: Pay attention to what’s going on in aerospace, because aerospace has been busy lately; medical applications seem to get put to the background because aerospace represents so much volume. We see significant lead time increases in titanium sheet and in some cases, plate product, too. I think that’s a challenge both for our customers and for us, because lead time spikes can happen very quickly and that should be discussed when they see something beginning to stretch out.

  Propylux HS 400x267
  Medical grade Propylux HS made from an FDA, USP VI
polypropylene resin (Courtesy of Westlake Plastics)

Steve Smith, President, Edge International: 
I’ve noticed, from a distributor standpoint, that most of the manufacturing mills of titanium, cobalt and stainless steel are now holding less finished goods inventory than they used to. It seems now that they are concentrating more on efficiency improvement. Their investment lies in the equipment for manufacturing, so they need to prove the return on that investment. In order to do so, they’ve got to be more efficient in what they produce, which means that they need to supply full quantities to customers, not bits and pieces or small quantities.

OEMs should give the contract manufacturers more notice of what they’re going to be expecting from them, so that everybody can work together and get materials in stock.



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