WHY A STRATEGIC PARTNERSHIP IS THE PERFECT MEDICINE FOR PERMEDICABusiness has been growing so quickly for Italian medical implant manufacturer Permedica that it can barely keep up with demand. However, a new strategy for its CNC department, in partnership with Seco Tools, has started to make a powerful increase to its productivity.
Fagersta, June 2023 – Business has been growing so quickly for Italian medical implant manufacturer Permedica that it can barely keep up with demand. However, a new strategy for its CNC department, in partnership with Seco Tools, has started to make a powerful increase to its productivity.
The global market in medical implants is booming. One estimate says that the compound annual growth rate (CAGR) between 2022 and 2030 will be 5.4%, increasing the overall value from $95.1 billion to $145.6 billion.1
Over the past decade, this constant upward trend has seen Italian-based implant manufacturer Permedica transform itself from being a well-respected name in its native market to becoming an international business. The company now has subsidiaries in Switzerland, Germany, India, Austria, South Korea, Australia, and France, with plans for expansion to the UK and US in the pipeline. Export now makes up 60% of its €35 million annual turnover.
But Permedica’s rapid growth has posed what the company’s Sales Manager Federico Perego calls “extreme challenges” to its productivity.
“Many distributors, partners and surgeons love our products for their design and quality, so they keep demanding more and more. Unfortunately, we can’t keep up with current demand, and how the CAGR rate is increasing in our sector,” says Federico, the son of Permedica’s founder and President, Marco Perego.
Initially, the management tried to address this by increasing resources. “We were trying to solve the problems internally by investing in more people for our company and streamlining the training process to perform a better method of manufacturing,” says Federico.
“However, it was a problem of multiple issues that characterise our complex operational structure. And the family nature of our business makes it important for us to solve problems because we haven’t got the time or resources to do everything.”
The turning point came when the parent of one of the company’s distributors suggested a meeting with Seco in 2022. That began an improvement journey, and a partnership, that continue to gather momentum to this day.
After an initial assessment of the factory by South Europe Cluster Manager Steven Bell, Permedica and Seco Tools Italy agreed to start a pilot to address a key productivity bottleneck in Permedica’s CNC department that was creating problems for the supply chain in its hip cup products.
“One of our machines could not operate at night due to the programming and the kinds of tools we were using. The material was overheating, which was stopping the machine and meaning that it couldn’t be programmed to operate automatically during the night,” Federico explains.
“Due to Steven being so clear and practical in his assessment of the problem, and because he had a team and a structured proposal to manage the issue, I automatically trusted them with a pilot. Steven and Seco were always very direct in relation to the issue and in proposing a better solution. They didn’t make a promise they couldn’t keep, and they didn’t just try to sell us tools. Instead, they helped us to solve what was an important issue for Permedica.”
One of the Seco Tools Italy team working with Permedica, Manufacturing Transformation Manager Matteo Foglietta, adds, “We were able to address swarf issues that were a big problem for the night shift.
“So Permedica has gained not only more productivity in terms of a shorter cycle time, but also an increase in capacity of the machine during the night in the unmanned shift. This is also thanks to the global competence from our innovation hub that we can bring to the customer side through the local and technical expertise here in Italy.”
Federico Perego estimates that this initial success has helped to increase Permedica’s productivity by more than 40%. Now further initiatives, including the installation of tool vending machines to help with warehouse management, are underway.
“So far, we are very satisfied,” says Federico. “There are still headaches to solve, but I hope we can continue with this great start and achieve important things together because there is a lot of complexity in our business, and we need many resources to support this. Permedica is reacting to the help being provided by Seco by placing more orders for tools, so it’s a win-win relationship.”
He adds, “This is just the beginning of a partnership we are going to create together because our intention is to grow our business as much as possible – there is huge potential for us. And for Seco the medical sector in which we operate is one of the strategic areas where it wants to grow. I think that there are all the bases for a long-term partnership.”
1 Medical Implants Market Size to Surpass USD 145.6 Bn by 2030 (precedenceresearch.com)
Family-owned medical implants business Permedica was founded by Marco Perego in northern Italy in 1986 and introduced its first prosthesis to the market in 1992. The company quickly established itself in its home territory as a manufacturer of well-designed, high-quality products.
Over the past decade, the boom in the medical implants sector has seen Permedica’s business grow rapidly, and the company is now present in 25 countries, with 40 international distributors.
“We can become a million-customer company,” says Sales Manager Federico Perego.