By Sebastian Huelck – CEO at tec5USA
Contract manufacturing has a rich history that most executives and engineers are completely unaware of. Its novel background actually originated here in the United States. Interestingly enough, it began in the dawn of the space age with an entrepreneurial idea sparked by Olin King, a Huntsville, Alabama business man. In King’s basement, King and two friends founded Space Craft Inc. (SCI) in 1961, which built satellites and communications gear for NASA, the U.S. Navy, and other government agencies.
When government funding dried up in the early 1970’s, King realized he had to pivot to survive. He took advantage of the relationships he had forged with OEMs while working on the space programs and decided to leverage all the capabilities in his tool box. With people, processes, and systems already established, King went to large companies like IBM and offered to build whatever they needed. IBM took him up on the offer and the rest is history. IBM began bringing in scattered boxes of parts and some sketchy drawings which eventually grew into the IBM PC1. King later changed his company name to SCI Systems which was acquired by Sanmina in 2001 for about $6 billion. SCI essentially pioneered contract manufacturing by being the first company ever to build another firm’s designs.
Contract manufacturing as a term became officially recognized in 1989, and today the global Contract Manufacturing Organization (CMO) market is projected to reach nearly $200 billion by 2026 with CAGR of about 10%.
Alongside contract manufacturing, manufacturing in general, has changed drastically in the last 50 years. Demand volatility is skyrocketing as customers put extreme pressure on companies as they seek personalized products to be delivered in record time. Products and manufacturing operations are becoming more complex as industry 4.0 technologies add new and more complicated dimensions to an already fierce globally competitive market. New startup companies face a vertical learning curve and a risky investment horizon bringing manufacturing in-house. What is the best way to proceed with manufacturing in today’s daunting environments? Contract manufacturing is the answer.
In the following paragraphs, we will illuminate tec5USA’s contract manufacturing’s benefits, values, and competitive advantages for your medtech organization.
The flagship tec5USA product base is firmly grounded in its roots as a leading designer and manufacturer of tailored inline process spectrometers (UV-VIS-NIR, LIBS and Raman) across a wide swath of major industries. Our contract manufacturing division is a natural extension of our current photonics expertise and focuses on photonics devices for the life sciences, medical devices, and lab analyzer instrumentation space. By leveraging our production capabilities in photonics and spectroscopy related devices, we are the ideal contract manufacturing partner for adjacent medical devices.
tec5USA is the North American affiliate of tec5 AG, founded in 1993 and located in Germany, operating through subsidiaries and partners worldwide. We are a member of the international photonics group, Nynomic AG, and supported by a team of global scientists, developers, and engineers dedicated to delivering unique solutions for our customers.
Since 2001, industry giants such as 3M, BASF, Albemarle, Buckman, Merck, Sanofi, and many others have trusted us with their R&D and manufacturing needs based on our sterling reputation. Clients across the world have experienced the distinct advantages we offer through our rare blend of American ingenuity coupled with German quality.
tec5USA’s contract manufacturing division has leveraged the very same natural skill progression that King and SCI followed back in the 1970’s. Recognized as an internationally renowned and well-established spectroscopy partner, we have taken our collective expertise from process spectroscopy and expanded into the contract manufacturing space offering tremendous opportunities for medtech companies.
With tec5USA, contract manufacturing is a core competency. The foundation for our contract manufacturing services originates from our team of renowned Applications, Engineering, and Manufacturing professionals with deep and rich expertise in the design, engineering, and high-volume production of complex opto-electronics devices, sensors, electronics, firmware and software of OEM spectroscopy and analytical instrumentation. We are backed by the strength of the 425+ employees of the Nynomic Group, with the flexibility, response time, and the lower overhead cost of a smaller facility.
How does tec5USA’s overall expertise translate into contract manufacturing benefits for your organization? We have implemented trusted and specific testing protocols pertaining to photonics related devices that guarantee outstanding results. Our expertise, proficiency, and rich experience in sensors, optoelectronics, spectroscopy, light sources from UV to Vis to NIR include laser technology, metrology-grade fiber, firmware, software, and industry automation makes us a logical partner to produce adjacent medical devices and ensure state-of-the-art quality. For over twenty years, we have served the semicon and medical technology markets with tailored spectrometers including unique multiplexing capabilities for cost reduction. Our production team has been extensively trained on high-precision semiconductor metrology related equipment and is deeply familiar with Copy Exactly! Guidelines. We have implemented ISO9001:2015 and are currently in process with ISO13485:2016, GMP, and FDA registration. The option for cleanroom operation is available for the manufacturing of specific medical devices. We also have the ability to automate parts of the manufacturing process to improve production efficiency and lower the costs. In order to ensure full quality compliance, First Article Inspection (FAI) is being conducted and FAIR reports can be generated during the pre-production run.
How does your specific expertise in photonics and relevant testing protocols benefit my future projects? Adjacent devices such as hematology analyzers, microscopes, opthalmology (diagnosis and treatment of eye disorders, e.g. OCT (Optical Coherence Tomography), laser surgery devices, medical imaging, oncology treatment devices based on light, flow cytometers, optical fiber based devices (e.g. endoscopy), DNA sequencers, etc. require specfic and deep knowledge as well as rich expertise in photonics which we are able to provide.
We offer reduced time to market through our manufacturing readiness for companies of all sizes. If you are a small start-up or even a larger organization lacking the manufacturing capabilities, shop floor space, and production team for a new device, our contract manufacturing provides the perfect plug ‘n play solution. Hiring qualified people and training them in highly specific product manufacturing and testing is even more challenging due to the Covid-19 pandemic. Once you have production in place, you should ensure a 90% utilization as a minimum to be really profitable – which is not always possible.
Additionally, most big Electronics Manufacturing Services (EMS) and CMOs concentrate on low-mix, high volume orders. In contrast, tec5USA’s expertise also favors high-mix, low-volume orders expanding opportunites for medtech companies of all sizes. Our capabilities include: optical, opto-mechanical, opto-electronics, electronics, sensor assemblies, active alignment, smart fixturing, high-mix, low volume, and small to large batches.
What about my IP and Confidential information? Your IP and Confidential Information are 100% safe with us. And we provide true cost transparency on your products. Companies can easily reduce their time to market, optimize manufacturing, achieve cost savings on capital, experience economies-of-scale in acquiring raw materials and components, and reduce operational risks. Additionally, our clients gain access to an expert production team and specific industry knowledge, have protection through Comprehensive Total Quality Management (TQM), meet regulatory requirements and enjoy the freedom that is necessary to focus on core functions such as product design and sales and marketing. We apply the same elite level of care and due diligence to your projects as we do to thousands of our own products and scientific instrumentation we manufacture every year.
How does tec5USA handle logistics? Our clients receive the tremendous added value of our highly refined supply chain management. We offer a flexible approach to procurement – your selected suppliers or ours, which will be continually audited and qualified. Our streamlined supply chain provides access to a worldwide network of strategic suppliers and key partners for electronics, sensors, mechanical and optical components that leverages the Nynomic Group of Companies’ significant buying power. We deploy careful obsolescence and inventory management by our Operations and Purchasing teams accessing our curated network of existing relationships in the electronics supply world. Raw materials inventory stock, finished good safety stock, consignment and Kanban agreements are available on demand.
Solid Business Continuity and Disaster Recovery Plans exist to ensure high availablity and uninterrupted production. Our international teams of skilled engineers and technicians exist for the continuous exchange of knowedge and cross-training. We offer a tailored approach to your needs with international distribution. Our North American office has been located in Plainview, New York, since 2001, which positions us in one of the world’s largest concentration of biotechnology and life sciences companies. We currently have three production areas that can be flexibly extended by another three dedicated areas for clients.
What about Quality and Efficiency? Our state-of-the art manufacturing expertise, lean prinicples, disciplined execution, and agile methodologies already in place for the core tec5USA product line are also ensured in the Contract manufacturing division. Our culture of continuous improvement and fierce dedication to regulatory compliance with ISO-certified quality management systems provides the very highest quality and efficiency for our clients. We have the expertise you need to design, build, and deliver premier quality products at scale and faster than our competition. We guarantee the performance of the instruments that we design and manufacture. Let tec5USA become the trusted company behind your brand.
Are you ready to transfer from your engineering department to our production floor? Experience the collaborative effort in the design, engineering, and refinement of your products for a flawless and successful execution and release. Consider tec5USA as a complement to your operations. We strive to become a long-term trusted partner and technical advisor, so that you can focus on your company’s core competencies. Free up your facility and allocate resources for your core IP and let us handle the production.
Let’s talk today about your contract manufacturing needs! Please contact me at email@example.com to discuss this in more detail!
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