Medical manufacturing Industry at-a-glance

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Medical manufacturing

by Tim Wilson

The $7.1 billion medical device manufacturing industry is not as large as the automotive or aerospace manufacturing industries in Canada, but for those companies considering this market or expanding their presence in it, it holds much promise.

There are more than 1,200 medical device manufacturing and development facilities in the country, according to the latest data from Industry Canada and Statistics Canada. The companies in this sector are generally small in size; more than half of the companies identified in a government analysis have fewer than 25 employees and 37 per cent have between 25 and 49 people. Approximately four per cent employ 50 to 150 employees and less than one per cent are classified as large companies with more than 150 employees.

Of particular note is that approximately 90 per cent of the medical device facilities in Canada are Canadian owned. While medical device manufacturing exists across the country, the industry is concentrated in Ontario (42 per cent) and Quebec (32 per cent). Twenty-two per cent are located in Western Canada and four per cent operate in Atlantic Canada. 

This industry faces the same challenges as other manufacturing sectors—the growing influence of manufactured imports from low-cost labour countries in the Far East. Despite these challenges though, the industry continues to grow. Exports increased at a compound annual growth rate (CAGR) of 5.5 per cent from 2000 to 2009. The US is the primary export market with approximately 71 per cent of all medical device products destined for that country. Of particular note is that the industry is diversifying. In 2009, three countries emerged as other leading export markets for Canada: Germany (4.1 per cent), the UK (3.4 per cent) and the Netherlands (2.0) per cent.

 Laser Perfect
When it comes to cutting small parts for the medical sector, lasers can have an important role to play. Proof of that comes from KJ Laser Micromachining, a company in Toronto.

“A company will come to us with a design, and we can cut to its specifications,” says Derek Carroll, a VP at KJ Laser Micromachining. “We have 14 different lasers for all types of laser cutting, marking and welding applications covering all materials and spectrums.”

One interesting example is when KJ Laser helped make a component for an innovative safety scalpel system, which started with a prototype.

“We then went to a small run and ended up with a production cycle for 250,000 units,” says Carroll.

The scalpel system itself is being made by Southmedic, which is based in Barrie, ON. Southmedic is one of Canada’s biggest suppliers of operating room products.

“Southmedic specified the material, the cut tolerance, and the design,” says Carroll. “It was developing the scalpel blade system which was like a Mach 3 disposable razor, where the blade was disposable and each physician could use their favourite handle. We made a component that would fit into this device to secure the various handles.”

This is a medical innovation that a small company like KJ Laser Micromachining can produce while also adding value to the medical device industry.

“The component had a quick release off the scalpel plate,” says Carroll. “This way the physicians could keep their preferred handle and just clip on a blade.”

Typically, to get started in a job like this, Carroll says KJ Laser would have a conversation with a potential customer to discuss price points, the development fee and where the customer intends to go with regard to scalability.

“We let our customers know that we can do small runs cost-effectively and take their product from prototyping through to production quantities” says Carroll. “We are doing well, making inroads into Europe, which is surprising and encouraging because for micromachining, Europe is viewed as the global leader.”

Facts & Stats
-$7.1 billion. The market value of Canada’s growing medical device manufacturing industry. 
-October 24-25 2012. Dates for the Medical Manufacturing Innovation international trade fair for the medical and pharma sector at the International Centre in Mississauga, Ontario.
-26,000. Number of attendees at last year’s event.
-A survey conducted by the Society of Manufacturing Engineers in January and February 2012, and published in March 2012, had the following findings:
• Assembly and Validation of equipment were named as the biggest challenges.
• 87% of medical manufacturers said process innovation was important.

 A model manufacturing plant
The Federal Government released a report on the medical devices industry in 2011, outlining the profile of a typical medical device manufacturing facility in the country. The model enterprise profile is a medical device manufacturing plant with 150 employees, most of whom work in an industrial facility, with others located in a downtown office.

Cost Factor and Usage Amount
Total occupancy (downtown office): 1,200 meters squared 
Total occupancy (industrial facility): 62,150 meters squared 

Electricity: 38,400,100 kilowatts
Industrial gas: 54,480 meters cubed 

Employee Type and Profile Head Count 
Logistics and Purchasing
Warehouse and distribution operatives:

Head of manufacturing: 1
Production manager: 1
Production operative (highly skilled): 10
Production operative (skilled): 35
Production operative (unskilled): 70
Quality control manager: 2
Quality control specialist:

Engineers: 15 


Total: 150

Tim Wilson is a contributing editor based in Peterborough, ON.
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