Surgical Innovations Share Discussion Threads

[bashor] 04/11/2019 17:10

And relax the pension rules for surgeons so maybe they can work a few more NHS hours doing keyhole surgery

[jmf69] 04/11/2019 17:00

Hopefully whichever new government comes in will pump some much needed cash into the NHS.

[bashor] 04/11/2019 16:13

I live in hope, no trades showing as yet today

[jmf69] 04/11/2019 14:35

Been a number of steady ticks up recently

[bashor] 31/10/2019 10:47

Could it be that trading has improved ever so slightly?

[bashor] 26/10/2019 07:59

It’s nice to see a positive gesture

[jmf69] 25/10/2019 16:51

Director buying provides a little positive consolation

[multibagger] 13/10/2019 16:27

A "SUN BB posts Excision and Total Clearance" aka POST REMOVED has been carried out by the unfailingly logical one...using a YelloPort Elite Keyboard !

To remove all BB evidence before the SUN cash CPR or Post-Mortem !!!

[gbh2] 01/10/2019 11:27

On Line spread for 50K 1.856 / 2.1

[bashor] 01/10/2019 10:29

Something is odd as well as the spread

[jmf69] 01/10/2019 09:47

The spread is ridiculous right now

[bashor] 27/9/2019 11:30

Certainly is! anyone here or possibly BGF reversing out?

[mandate] 27/9/2019 10:28

That's a lot to dump in one go!

[gnnmartin] 26/9/2019 15:29

Because market makers aren't gamblers, they only want to hold stock that they think people want to buy. The ask price hasn't moved, the bid price has moved up a bit, because market makers are a little more confident that they will be able to sell what they buy (as long as they don't buy too much!).

[bashor] 26/9/2019 15:09

Why would the bid price move north by 11% on such low volume

[buywell2] 22/9/2019 09:56

............... Tender for the supply of surgical cutting blades .............


How difficult is it to get some prices ? This took me less than 10 mins
A telephone enquiry would be helpful before the tender document.
The company I chose at random and without any research other than looking for a smallish UK based company that does work for the medical industry and works to advertised close tolerances using modern Computer numerical control (CNC) machines .




a) This is a tender to provide surgical cutting blades as shown on the drawing supplied and the samples provided.

b) The type of material used shall be surgical grade stainless steel type xxx yyy

c) The tolerances shall be 0.01mm for any turned operation and 0.001 mm for any ground surface

d) Please quote prices for the following order sizes

1) 100 units
1) 1,000 units
2) 5,000 units
3) 10,000 units

e) Please indicate time for the completion of the above orders after receipt of tender. It is anticipated that a small order for 100 units would be placed initially to be followed by a larger order subject to assessment and testing.


f) Finished blades shall be individually separated from each other by means of a clean paper membrane so that cutting edges do NOT become compromised against each other.

Completed orders shall be boxed in batches of 50 units of the same type per box such that damage will not take placed during transit .
Please indicate courier and type of delivery proposed before sending completed items.





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I believe Surgical Innovations have a clean area where surgical blades are decontaminated/sterilised and cleaned to hospital standards before packaging takes place. I assume that surgical blades are packaged in vacuum sealed packages again at Leeds in a clean room environment.


This area would presumably also have to be kept in house to allow SI to maintain and meet their quality control requirements.


IMO there is NO reason whatsoever why the machining operations themselves could not be outsourced to TWO engineering companies at the same time = duality in case of a problem with one eg factory fire or close down.


I have not mentioned any quality standards in the above , these could be added, however the fact that SI can provide samples of the cutters , graspers, dissectors, or any other type of MIS and surgical metal part should make the manufacture process quite easy. A drawing however is also recommended and required by any engineer worth their salt.


There is always a telephone number with a contact name suppled by such smaller engineering companies , the one above employs circa 42 people. Ringing this gent should determine within less than 10 minutes if they can do the work and are interested on quoting.

One would imagine that IF work carried out is satisfactory , other orders could follow , as volumes increase for other metal parts , one would expect unit costs to fall further as SI became a larger customer.

buywell has had no contact with the company mentioned and has no financial interest in it.

It has been selected purely by carrying out a web search for UK providers of precision milling and grinding services, as an example of what is out there and to demonstrate just how quickly SI could start to outsource to cut costs in a meaningful way.


dyor


Addendum:

Folks may remember SI acquired some assets of Surgical Dynamics , (who are still trading)

One of those assets was a metal injection moulding machine. Assuming this machine is operational at SI Leeds machine shop , it could be used to supply the various metal blank shaped jaws ( cutters/claspers etc) to be finished/ground to final sharpness/profile .

However IMO this machine will also be available at various outsourcing enterprises eg


IMO this process is another that can be outsourced.

[buywell2] 21/9/2019 10:19

It would seem that the new BOD are in the early stages of cost cutting:


I refer to a couple of snippets from the recent financial report that give me some hope that much more is to come regarding cutting production costs ie outsourcing where it is possible and makes commercial sense to do so.


1) ''Gross margin up by 4.1% to 43.1% (2018H1: 39.0%) due to manufacturing efficiencies''

comment:

A 4.1% increase on margins does indeed seem to have been achieved by 'manufacturing efficiencies' which IMO comes from the fall in cost of sales of 322K .

Cost of sales 2019(2.90M) .... 2018(3.22M)



2) ''Identifying opportunities to simplify processes and methods''

comment:

IMO 'simplify processes' might equate to outsourcing a manufacturing process .


3) ''Targeting faster time to market,lower unit costs ''

comment:

'lower unit costs' IMO can only be achieved by lowering manufacturing costs .





IF the bulk of the work done in the Leeds machine shop can be outsourced then that would mean a much more smaller premises/office could be leased or acquired in Leeds if that is a 'must' location.

Design QA and RA plus perhaps some machines to do prototype works for new devices plus to begin with the retention of the 'clean area' where required cleaning/sterilisation and final quality checks are made before packaging and dispatch .


IMO SI needs to shave off another 1,500,000 pounds on top of the 322K it has just managed to do.

If 322k = 4.1% margin increase then :

Pro rata a further 1,500,000 saving along the same lines would equate to a further margin improvement of 18.9%

Gross Margin could then rise to 62% which is what is needed IMO as a target.
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--------------------- Distalmotion and Dexter -----------------------

IMO a game changer for SUN if CE approval is obtained by Distalmotion who to put it bluntly IMO are falling behind with previous dates given.

Clearly IMO there are some issues that need sorting and in the meantime others are entering that potentially NHS lucrative robotic surgical space and probably getting a head start on SUN now .

dyor

[buywell2] 21/9/2019 10:19

POST REMOVED

[buywell3] 20/9/2019 07:44

I think what he is getting at can be summed up as

Grow your roses and trim your weeds

Concentrate monies spent on growing the good products and services and most profitable areas of expertise within the company.

Certainly some cost cutting would IMO not go amiss over the next year or two.

I would like to think that the BOD had already explored outsourcing production or at least some of it.

Machine technology however has come on in leaps and bounds over recent years so maybe it should be explored again,perhaps within the UK first as a trial.

Wouldn't hurt to get some indicative tenders in just for cost comparison

[bashor] 19/9/2019 19:06

Buywell you should be a CEO

[buywell2] 18/9/2019 16:51

Have you watched the above video and seen the size of the 'machine shop' ?

Just answer that one first

IMO running an engineering machine shop is not where it is at , anybody can do such machine type work.

Cutting edge design and development of innovative surgical devices is where it is at as most can't..

Keeping control and maximising sales of those devices , their quality and obtaining approvals , compliance and certification also a must.

It is ALL about added value to the product and money spent

SUN needs to get a control on its costs IMO and sooner the better

dyor

[mandate] 18/9/2019 15:06

@buywell - were you around quite a few years ago when they did exactly the opposite of what you're proposing in order to control quality and costs? A favourable upturn in demand will get those machines rolling again. I think the last thing they need is the upheaval of another move.

[buywell2] 18/9/2019 13:29

POST REMOVED

[buywell2] 18/9/2019 13:24

2019 - A NEW STRATEGY FOR GROWTH IS NOW NEEDED



................... SUN AND TIME FOR A NEW STRATEGY FOR GROWTH ...............



About 3 years ago Surgical Innovations had just over 50 people after shedding some staff in order to get back to profitability


After the Elemental Healthcare acquisition staff numbers were up to around 75


In the latest results staff numbers are now at 100 .... DOUBLE what it was around 3 years ago.


With the adoption of IFRS 16 , leasing costs for Leeds is hitting the numbers as well as increased overheads due to the much increased headcount.

Profits have suffered to the extent that there were none. SUN made a loss again , IMO too many staff and too little turnover = a bad situation to be.


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--------- RADICAL CHANGE IS NEEDED IMO TO GET BACK INTO PROFITS --------

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When buywell says RADICAL he means just that.
IMO SUN needs to implement changes that can save/make money to the amount of around £1.5M and at the SAME TIME up margins from a lowly 40% to a minimum 60%.

Put bluntly SI are IMO employing a workforce of machine operators operating in a very large workshop engaged in various machine operations .

This is low tech stuff and NOT where the money is at IMO. Please now click on the youtube link below to view the workshop of which buywell speaks and at the same time here the old CEO say:

' 80% of turnover comes from outside of the UK'
SI has gone the other direction and IMO close to 80% of turnover is coming from inside the UK.
SI needs to address IMO the US market because again as the old CEO made the point 50% of the world MIS market for which SI designs and develops medical devices is in America.
Sure SI is making some inroads into the US via the OR Company but too slowly IMO.
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What sort of changes could be made and how ?


IMO this is largely dependent upon when Surgical Innovations can exit from their lease obligation/s at Leeds HQ, because IMO the BOD should consider the following:


1) Investigate outsourcing ALL production in a staged and staggered manner over say a 2 year period.


2) This could be done by the use of say 2 other companies to carry out the work on a 50/50% split so that any problems with one of them could be picked up by increased production with the other, as a new second supplier was found.

3) IMO there are many small but well established engineering companies in the UK that would like to tender for some of the Leeds production work however:

4) Alternative production suppliers might be found for example in India, South Korea or Taiwan to name but three countries.

5) Quality of course is key , but with the right contract in place and regular checks this should not prove to be insurmountable .

6) IMO work could be outsource phased away from Leeds in a controlled manner once quality and continuity of supply had been established and order numbers ramped up as I said over say a 2 year window.

7) The object of this would be to get rid of Leeds HQ and the lease costs and work from Elemental Healthcare premises once ALL production had been outsourced.

8) Headcount could then reduce IMO to include SI and Elemental Healthcare sales , design staff who could work from home and quality control plus recent other management personnel required to meet compliance issues .



Surgical Innovations IMO need to come up with a strategy to cut £1.5 Million OFF the present costs of doing business


This company is a micro cap listed on AIM

It has an impressive list of Institutional investors

It needs to be driven back to profitability by controlled cost cutting measures whilst sales orders remain tight.


Look at this older video and see the size of the SI machine shop and number of different machines , many of which seem to be idle.



Imagine how much money was spent on installing these using original float monies and any early fund raises.

Imagine the replacement cost today it would be huge IMO and how old are the machines ?


IMO Surgical Innovations needs to get away from engineering production and associated manpower costs and problems eg sickness, strikes , breakdowns.

IMO SI would be better served in development, design and sales of new medical devices NOT the production of them , it is proving too costly .

[multibagger] 17/9/2019 17:23

Yes you are right Pugugly that incisional hernias are a well known complication of abdominal surgery (in general).