Forging coalitions: net-shape forging grows in popularity as raw materials become more expensive.
Cobalt chrome, for example, was priced at an all-time high in March, according to a recent article from Dow Jones. Since 2003, the cost of this alloy mix steadily has risen and hit a 30-year high during the early spring, when prices were nearly 60% higher than the previous year. One orthopedic supplier told Dow Jones that it was paying approximately $63/pound for a 2-inch bar of cobalt chrome, representing a 50% increase from what the company paid a year ago.
Titanium, another metal commonly used in large-joint (and other) implants, also reached as high as $50/pound at its highest point in the past year, according to Dave Tenison, senior vice president and general manager of FPD Company, a fully integrated manufacturing and engineering facility in McMurray, PA. In the past month or so, the price has fallen to about $35/pound (as of press time), Tenison said, but supply and demand most likely will drive the price upward yet again in the near future.
Although the cost of metal doesn't factor heavily into the final price of an implant--large quantities aren't needed to produce a single device component--orthopedic executives remain mindful that any increase in any part of a manufacturing operation can shrink final profits.
That is just one reason that forging, a process by which metal is pressed, pounded or squeezed under great pressure to create a part, remains a critical method used in orthopedic manufacturing operations today.
Indeed, the ancient art of forging remains a popular option for making items such as hip stems and tibial trays because of the cost-saving benefits it offers, as well as the strong microstructure a forged part contains that other processes may not be able to duplicate. For comparison's sake, casting (the art of pouring molten metal into a wax mold) certainly has gained ground for some applications because it reduces the amount of scrap metal left over (among other benefits), but castings may contain internal defects in their microstructure that are less likely to be found in a forging. And machining a part from scratch is not without its disadvantages in terms of cost, since the process involves chipping and cutting bars of metal to produce a part--ie, the more machining needed to finish a part, the longer (and, likely, more money) it will take to complete.
All processes have their benefits and drawbacks in orthopedic manufacturing. But given inflation and other economic issues at stake, cost is a major driver of decision-making during device development, and forging can save money--something every OEM wants to hear.
How Forgers Save Customers Money
Professionals serving the forging industry told ODT they have been enjoying double-digit gains in recent years--even as some of their OEM customers only see year-over-year gains in their operations in the single digits--and they don't foresee any change in their own growth opportunities ahead. After all, OEMs are constantly busy at work designing new implants to address such issues as wear debris, implant longevity, the growth of minimally invasive procedures and the need for more modular hip and knee components and instrumentation to accommodate these surgeries. As a result, forging operations are finding that as product lifecycles shorten and the need for more outside expertise widens, a win-win situation not only is possible, but likely for those who offer good service and stay adept at being flexible to serve shifting customer needs.
The biggest shift occurring right now in orthopedic manufacturing, some experts believe, is less reliance on machining to create a final part from a gross forging and more use of net-shape forging. This method, also known as precision forging, has gained a lot of attention because it can dramatically reduce finishing costs by decreasing the amount of machining needed after forging--and this reduces both the amount of stock machined away (ie, fewer scrap metals equal less wasted material) as well as the machining time (ie, increased throughput/capacity and quicker finish time).
"We're able to reduce the amount of materials we're putting into net-shape forging, and that material isn't just scrap and chips going into the hopper," explained Ken Tuchel, senior vice president of implant sales and marketing for Symmetry Medical's Lansing, MI-based implant division. "We've seen a continued emergence of people going to a net-shape forging. Where some customers said, 'We've used gross-shape forgings forever,' it's a matter of convincing them of the benefits of net shape--it can save them money on materials and time.
"A lot of our OEMs have internal machining in their manufacturing operations," he continued, "and it allows them to be able to take that part and put it into their fixturing and reduce the amount of machining hours needed to make a part."
These attributes are important, particularly when working with materials such as cobalt chrome, according to Matt Burba, vice president of operations for Orchid Orthopedic Solutions in Holt, MI. "Cobalt chrome is very difficult to machine and timely and costly because of the amount of cutters you go through. The more near-net shape you go to with forging, the more you save material and machining time. Whenever we quote projects, we're trying to make it as 'near net' as possible," he said.
Although most products being forged in orthopedics are related to hip and knee implants, the product mix is slowly changing, Tuchel said, noting that trauma and spine products now are being forged more often than in years past.
"People are seeing the advantages, and the mindset has changed a bit," Tuchel explained. "For example, if it takes an hour to make a gross forging ... if you can get a net-shape forging, it may be a bit more expensive, but if it can save 50% of the time needed to make the part, then you can increase your [manufacturing] capacity and throughput."
Net-shape forgings aren't the only money-savers offered by forging providers today. FPD, which has been in operation since the 1980s, also offers "generic" forgings for customers to help save time needed to get to market. "We have generic tooling and shells--hip stems and tibial forgings--that we developed for low-volume customers that they can use without a tooling charge if they're manufactured here," Tenison reported.
Other Improvements Add Savings
Even though advances in forging can reduce machining requirements, no forging operation can dismiss the importance of having a good ancillary machine and tool shop to achieve an optimum finished part. Thus, many forging providers have looked to improve other areas of their service offerings as a means of maintaining quality and increasing value--whether it be in the form of time or cost savings, or both.
One area that's been improved is tooling. Today, the experts said, advances enable tooling divisions to produce never-seen-before tolerances in forging. Tolerance obviously varies depending on a part's configuration, but Tuchel said advances in tooling have brought tolerances as tight as [+ or -] 3/1,000" in some designs.
Similarly, automation continues to permeate the landscape as companies invest in this equipment to ensure repeatability and also achieve savings in areas such as material utilization.
"If you start with a hip stem, for example, we've got automated robotic drawing processes that draw the material down to a size that allows us to use a little less material and draw it. We can draw that material and put it into the process, which is more repeatable," Tuchel said. Symmetry already has invested approximately $2 million in automated equipment and most likely will spend a similar amount on additional equipment, he noted.
Simulation software also remains a valuable investment for forging firms. CAD/CAM and other software are used for everything from die design and production; billet handling and presses; heat treating; and machining determinations.
"We have invested heavily in forging simulation and process simulation-we have a cluster of five high-end PCs running parallel-process calculations for forging simulation, and we can do some very detailed simulations that are very accurate. You have to know how you're going to model friction, how you model heat transfer, [etc.]; you need years of experience to correlate the simulation software to reality," Tenison said. "We can model our entire manufacturing process from the forging process, tooling design, N/C tool paths and final CMM inspection programs on our customer's models prior to cutting a single chip."
The biggest push among forging outfits appears to be a business model founded on Lean manufacturing. In the past, many firms only provided forging and then shipped the part to the OEM for finishing, but today most of the companies serving the orthopedic community offer forging, machining, coating and other finishing services, and then ship the complete product to a customer.
"We're constantly focused on adding value to our customers, whether it be cost-reduction programs or handling more of the value chain or eliminating points in the value stream," Burba of Orchid explained. "We're very focused on Lean; it has helped us focus on where we needed to add resources and meet demands of the industry."
Tenison agreed, noting that his company also has used Lean to increase throughput and productivity. One area where FPD may differ from some forging providers is in the makeup of its manufacturing space--the company houses both forging and machining equipment in one space (versus, perhaps, two adjacent buildings or entirely different companies).
"We can design our own forgings in very low-volume applications and then do more machining, or in a very high-volume application we can design more complex net-shape forgings and do less machining. We can trade off pretty fast. When we combine those technologies to the optimal point, we tend to win work that way," he said.
Volume remains an issue to any OEM concerned about inventory--and forging experts said that word is on everyone's mind when cost comes into the discussion. Therefore, companies such as Orchid are looking beyond the forging vs. machining (or casting) equation and are trying to add value in other ways that make sense for customers.
"We've put in an implant kanban system for some of our major customers," Burba reported. "There's less work to do internally, and we get the same product out by tying our operating systems in more closely." To enhance its operating system, Orchid also expanded its facility by 30,000 square feet last year, he added.
With all these investments and dedication to identifying and serving customer needs, it's clear that providers of forging expect no slowdown in business anytime soon. They believe forging is one of those processes that won't be replaced by other manufacturing options, even as newer materials emerge in implant products. After all, ceramic has excellent performance characteristics, but it's still expensive, and plastics still tend to be used mostly in components and likely won't be found in larger parts such as hip stems.
"We've been hearing about ceramics and carbon composites and a lot of technologies, but orthopedics will need metal to carry high-load applications for a long time," Tenison asserted.
In addition, although providers of injection molding and other common manufacturing processes used in orthopedics have seen an influx of competitors for medical business coming from automotive or other industries, forging operators aren't too worried about the same trend occurring in their field, simply because the number of forging providers in the United States is relatively small (and many operators from other fields lack necessary quality certifications to compete in the medical arena). And though many contract manufacturers have been adding new services to become one-stop shops for orthopedic OEMs, forging experts said they don't anticipate forging to become one of those offerings for all but a few companies (such as Orchid and Symmetry).
"If you're a machine shop, to buy a forging press and all the facilities and experience, it would be a gigantic investment. Forging is a unique industry and is based on a lot of experience--it's also a very proprietary industry. You can't just buy a press and run it. You need experienced operators and engineers," said Tenison.
Most of the industry outsources forging today and will continue to do so, the experts agreed, even as some OEMs--such as Zimmer, which purchased its in-house forging operation--prefer not to do so.
The need for a forger's expertise is high, according to those who provide the service. Along with the cost rationale for outsourcing the task, Tuchel said he has found that many engineers never learned how to "design in" a forged product but, instead, only know how to design a finished product. Therefore, forging experts have a great opportunity to help product engineers evaluate their designs and make suggestions that can improve the final product and keep costs reasonable.
One possible threat to US-based forging operations is globalization, according to a recent report by the Forging Industry Association. However, the experts who spoke with ODT said they do not necessarily agree with this assessment.
"There is quite a bit of fear and trepidation about going to other countries where they don't have the controls and validations we do [in the United States]," said Burba of Orchid. "If we can be cost competitive, our customers would be more than happy to stick with us."
Ultimately, he concluded, "We want to be as good as our customers are in anything they do."
DID YOU KNOW?
Forged components are used in many applications other than orthopedics--everything from hammers to garden rakes and high-precision components found in airplanes and rockets (more than 18,000 forgings are contained in a single Boeing 747). Forgings are found in more than 20% of the products that comprise the gross domestic product of the United States.
Source: The Forging Industry Association (www.forging.org)
EMPLOYMENT IN THE FORGING INDUSTRY
Approximately 45,000 people in are employed in the US and Canadian forging industry. Most forging plants are small businesses that employ approximately 50-100 employees, but a few larger facilities employ more than 1,000 people.
Source: The Forging Industry Association (www.forging.org)
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|Publication:||Orthopedic Design & Technology|
|Date:||Jul 1, 2008|
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