Perspectives on the Medical Cable Assembly Industry

Steve Sundberg is the president and CEO of Technical Services for Electronics Inc. (TSE), a leading manufacturer of cable assemblies for the medical device industry. Steve joined TSE in 2006. He has more than 30 years experience in the interconnect industry.

David Pheteplace, CableAssemblySupplier.com: 2009 was a tough year for many companies, even in the medical devices industry. How did TSE fare in 2009?

Steve Sundberg: 2009 was a good year for TSE. We grew revenues and profitability, acquired an exciting portfolio of fine wire capabilities, and, the thing I am probably most proud of, we increased the number of people we employ. It was apparent mid-year that we wouldn’t achieve our original revenue forecast, but our management team, and really, all of our employees, focused on controlling costs and improving efficiencies. We were able to meet our profit goals in spite of missing our top-line goals.

CAS.com: What main forces are driving the medical cable assembly market today?

Sundberg: As it applies to electronic interconnects, we would need to overlay Bishop & Associates’ contention that miniaturization, globalization, and outsourcing are the trends driving interconnects, in general. The following are medical trends I have noticed: lower-cost disposables are being used to better control infectious disease; wireless and/or networking of systems for better digital management of patient records; and lower costs, in response to the U.S. healthcare policy—and the OEM’s insatiable desire to do business with suppliers that are immersed in their unique needs, as imposed by the U.S. FDA and other regulatory bodies.

CAS.com: How is TSE responding to these factors?

Sundberg: TSE’s responses have been focused in four areas.

First, we have almost an exclusive focus on the medical market, with more than 90 percent of 2009 revenues generated with medical device OEMs. We believe this focus forces us to truly understand the needs of our medical device customers and the unique regulatory environment in which they live. It goes beyond being certified to ISO 13485:2003, which all of our facilities are, but means we understand “why” process change controls are so critical, “why” risk assessment is such a hot topic for our customers, and the responsibility we have to educate our second- and third-tier suppliers on the nuances of being a supplier to the medical device industry.

Second, we have trained and equipped customer-focused teams that are cross-functional in membership (including account management, customer care, development engineering, manufacturing engineering, sourcing specialists, and quality engineering) and empowered them to own the interaction with their set of customers. The result has been a closer, more efficient product development process and better management of the entire supply chain, delivering exceptional customer satisfaction levels. We need to continue to push ourselves to get better, to be even more valuable resources to our customers, and our “voice of the customer” feedback suggests we are on the right track.

Third, we have expanded our services. The medical device OEMs want their suppliers to do more than simple assembly. To that end, we have increased our investments in packaging and sterilization of disposable interconnects; added cleanroom capacity; invested in equipment for quick-turnaround prototypes to shorten our customer’s time to market; and increased our engineering staff in our Asian operations for more local interaction with the Asian supply chain.

Last, specifically to address the trend to miniaturize, as well as to better address the emerging low-cost segment in the ultrasound probe cable assembly market and intravascular catheters, TSE acquired a Portland, Oregon, manufacturer of fine wire coax and twisted pairs, with the capability to produce products as small as AWG 50.

CAS.com: How do you see the still-developing Health Care Reform Act impacting the medical cable assembly industry?

Sundberg: It’s probably still too early to really know, but at this point, we are anticipating an increased focus on lowering the costs of designing and developing the devices, and ultimately, the components that go into them. The cost of the interconnects we provide are often an insignificant contributor to the total cost of the device, but the cost associated with designing, developing, and qualifying that component are not. Suppliers will need to become better partners with the medical device OEMs in managing the development costs, shortening their time to market, and no doubt, in lowering the costs of the components they supply, too.

CAS.com: Do you foresee the major medical device companies regionalizing their manufacturing?

Sundberg: Yes, this is already starting to happen and will likely only increase. Medical device OEMs have been reluctant to manufacture off shore, but that is changing, not only because of regionalization, but also in response to their need to lower costs.

CAS.com: How will TSE approach the trend of regionalization in the medical cable assembly market?

We are increasing our investment in our operations in Asia. We expanded engineering and manufacturing capacity in the region in 2009. Currently we are researching locations to open our next Asian manufacturing facility, which we hope to do later this year.

The Technical Perspective:
New materials, techniques, and requirements in medical assemblies

Kirk Mikkelsen is the director of engineering for Technical Services fore Electronics Inc. (TSE). He joined TSE in 2007, and has been in his current role since October of 2009. Kirk has more than 25 years of engineering experience. 

David Pheteplace, CableAssemblySupplier.com: What are the five technical factors that are driving medical cable assemblies today?

Kirk Mikkelsen, TSE: This is what we are seeing at TSE. I will list them in no particular order:

RoHS continues to have a significant impact on existing and new designs in the medical market. In the U.S. medical industry, the conversion to RoHS-compliant components has lagged behind the rest of the world. However, it has become more critical, as component availability is becoming a problem, and access to international markets for non-RoHS assemblies is restricted. The picture (right) is an ultrasound probe printed circuit board assembly, in which the use of the higher-temperature RoHS-compliant solder makes the process a bit more difficult.

Miniaturization with high-conductor count and high-density connectors and assemblies are both a challenge. These very-fine-pitch assemblies require careful handling and special assembly techniques.

Hybrid connections are becoming more common. These assemblies may mix electronic signals with fiber optic imaging, lighting, and hydraulics. These technologies each require special assembly techniques.

Electrical and mechanical design of antennas for communication with wireless devices—such as wireless implanted devices—is growing. The picture (above right) depicts an external antenna used for programming a pacemaker.

We are seeing more assemblies that must be defibrillation-resistant. There can be no arching between conductors. This is a bigger challenge when the assembly is also a high-density interconnection.

CAS.com: What new termination and material technologies is TSE employing?

Mikkelsen: TSE has a broad spectrum of technologies to support our customer’s needs. In addition to many well-established technologies, we have expanded our capabilities with several newer technologies.

We utilize several proprietary fine wire processes at our Portland, Oregon, facility. The picture, right, is a cable containing 128 coax, 50-ohm conductors at 48 AWG conductor size.

Laser marking, laser striping, and laser welding are used on many assemblies.

We are using resistance welding processes for tight-tolerance, fine-feature components, constructed from dissimilar materials.

Silicone molding focused on high adhesion between components and silicone material has become an important capability, and we are also investigating the appropriate use of antimicrobial materials.

CAS.com: What are the major design issues that must be considered with medical cable assemblies?

Mikkelsen: The major design issues that TSE considers are identical to what our medical customers consider as important:

• Reliability

• Safety

• Ergonomics

• Clean-ability

• Sterilization

• Biocompatibility

• Cost

• Time to Market

• Regulatory Issues

CAS.com: What future changes do you anticipate from regulatory agencies, like the U.S. Food and Drug Administration (FDA)?

Mikkelsen: The FDA will continue to push regulatory control further down the supply change. It is hoped that the FDA will work harder at differentiating between and defining the requirements for major and minor product/process changes.