Despite typical supply chain woes, Founder and CEO Hunt Dabney and COO and General Manager Jon Schmidt expect the medical product manufacturer to continue its impressive growth trajectory.
Dabney was a sophomore in high school when he developed his first medical product: an electrosurgical generator system for a company that belonged to the father of one of his friends. When he founded Hunt Dabney and Associates in 1982, he planned to provide engineering consulting services. But over the years, his business — now known as HDA Technology — slowly shifted towards the specialty of developing and manufacturing Class I, II, and III medical devices.
“Originally, my goal was to kind of be an engineering department for companies that didn’t have electronics and software,” Dabney says. “But the needs of clients have changed quite a bit. At this point, we’re pretty much a full turnkey medical product development and contract manufacturing organization.”
HDA Technology, which is FDA and California FDB registered and ISO 13485 certified, is housed in a 10,000-square-foot facility in Orange County’s Lake Forest. Dabney’s organization works with everyone from small medical startups to leading medical device manufacturers and offers production volume ranges from five to 50 compliant pilot units for clinical testing to hundreds of thousands of units for commercial production.
“We work with BD, Bard, Johnson and Johnson, and folks like that,” Dabney says. “And we have a number of active programs in-house right now. A couple of them are with companies on that list and a couple are with early-stage startups where we’re developing the first version of what they’re intending to ultimately produce.”
Schmidt notes that products HDA Technology plays a role in developing and manufacturing can be quite incredible. “It’s very beneficial to people,” he continues. “You’re creating stuff that helps people, and it’s just very gratifying to do that. As an example, we’re currently working in areas that will affect improving radiation treatment efficacy for cancer patients. And we’re working on a program that is intended to improve orthopedists’ ability to diagnose conditions much more readily and accessibly than what they currently do, which is use MRI. It’s fun stuff.”
The company makes frequent reinvestments in equipment to support the state-of-the-art development and production its clients’ projects require.
“We’re constantly buying new equipment out of necessity and out of desire,” Schmidt explains, “because a product that we take on may need a piece of equipment that we don’t have. It’s pretty common for us to reinvest into our capital equipment periodically throughout the year.”
“That’s true of engineering, test equipment, and software tools, too,” Dabney adds. “We’re vigilant and proactive about making sure we’re efficiently and properly equipped to do what we need to do.”
In most cases, the clients HDA Technology works with on product development projects stick around for production as well. “We sort of adopted a policy a few years ago that if we’re going to develop a product, it needs to be one that we will be manufacturing at least initially for the client,” Dabney explains. “The kind of stuff we build is durable goods or capital equipment. It’s pieces of therapeutic equipment that are bought one time and used for a long time. It’s not small, disposable stuff.”
Schmidt notes that there are few other manufacturers in the U.S. that are the size of HDA Technology and able to offer the same services.
“There are very, very few that are not humongous — with dozens and dozens or even 100 or 200 employees — who have the ability to interact with the customer the way that we do,” he continues “We have no problem whatsoever dealing with a startup customer or smaller customer as an example. We’re trending towards larger volume production deals as much as we can, of course, but have no problem dealing with the smaller customers that larger companies simply won’t talk to. And we’ve been told this by people who know what they’re talking about in the industry: there are less than 10 companies like us in the United States at our size who have the ability, registrations, experience, and number of years in the business that we have.”
Challenges: “We have the challenges every other company on the planet has,” says Schmidt, “which is supply chain issues. If we look at them as compared to three years ago, they’re five times more difficult than they were.”
While HDA Technology’s volume grew nearly 300 percent over the last two years — despite the pandemic — and Dabney and Schmidt are optimistic that they’ll be able to maintain last year’s growth and add to it, the aforementioned supply chain challenges could prove to be a serious bottleneck.
“You can book all the business in the world,” Dabney says, “but if you can’t get one critical part, you can’t do the work. We have a lot of potential stuff that should lead to a moderate amount of growth this year over last year, but only if we can get parts and the things that we have lined up to do can be provisioned.”
Opportunities: “The complexion of business and the way it works throughout the world and here in the United States in this market segment that we’re in has changed a lot,” Schmidt says. “It has given us an opportunity to be seen in a different light, and to let the expertise and the abilities that we have really shine and be utilized by companies that normally wouldn’t utilize resources like us. It’s changed dramatically from that perspective, so that’s a great opportunity for us.”
Needs: “We’ve been working hard to try and build our staff,” Dabney says. “That will be a limiting factor if we don’t see some improvement. But I’ve talked to a lot of other guys with businesses, and I think an awful lot of engineering and software development people with high levels of expertise are in their 40s and 50s. And a think a very large number of them have discovered that they could rearrange their lives, simplify them, and not go to work anymore but just retire early or freelance remotely from somewhere else. A whole lot of the labor pool that we would normally draw from seems to have gone off the market.”
But the workforce shortage isn’t all bad — at least not for Dabney. “A side effect of this is that I’m having fun because I love doing this work,” he continues. “I haven’t been as active in design and working in the lab myself in the last few years. As we’ve grown, I’ve been more managerial. So lately, I’ve been getting up real early, coming in here, working in the lab, and trying to get all the other work done, too.”
