Welch Allyn is glad to be in America. One hundred years after its founding in Upstate New York, the company still produces the bulk of its products right there. “Our owners have taken great pride through the generations to maintain a legacy that has been very significant to them,” says John Tierney, president, Americas.
“I definitely think it is a competitive differentiator,” says Tierney, speaking about the company’s tradition of building the bulk of its products in Skaneateles Falls, N.Y. “It’s a value-add, but not something we lead with. In today’s world, customers look at a lot of other things first. They expect high levels of quality, and the right feature set for what they need from a medical instrument.” But in a tight, competitive market situation, “made in the USA” can give Welch Allyn and its distributors an edge.
“It’s kind of like the ‘green’ initiative,’” says Tierney. “For some people, that is of paramount importance. It may not be something they would pay a 10 percent premium for, but, all things being equal, it might be a differentiator.
“It comes down to this: You have to know your customer. You have to really understand their priorities. You [make an effort to] understand what they’re looking for and how they make their decisions, then you do your best to match up and meet those things.”
Over the past 10 years, Welch Allyn – like other companies in the medical device industry – has faced its share of challenges. One of them is globalization, something that non-healthcare companies have faced far longer, says Tierney. “Combine that pressure with the increased regulatory environment and the overarching impact of the Affordable Care Act, and it definitely has everyone thinking more than ever about where you manufacture your goods, and why.”
There’s another reason the company has been rethinking its manufacturing strategy: Risk management. “We started looking at this really seriously 10 or 15 years ago,” says Tierney. A natural disaster – tornado, flood, etc. – can cripple a company with just one plant. “It seemed that a more bifurcated supply chain would be more prudent,” he says. So, approximately 10 years ago, Welch Allyn opened a plant in Mexico, which today manufactures primarily disposables. “We’re very, very proud of that facility,” he says, adding that it has been voted one of the best places to work in Mexico several times.
In the past year, the company opened a small manufacturing line in China, which the company intends to use as a pillar to grow its Asian/Pacific business. “As a global company, we need to think broadly,” says Tierney.