Apr 04

Dunlee’s Unique Approach to CT Tubes Drives Value, Long-Term Success
Q & A by Julie E. Williamson

For more information about Dunlee:
Worldwide Headquarters:
555 North Commerce St.
Aurora, IL 60504 USA
Tel: 800.238.3780 in USA
630.585.2100
Fax: 630.585.2125
www.dunlee.com

For nearly 60 years, medical imaging customers have depended on Dunlee for high performance, reliable and cost-effective replacement tubes and related components. And for good reason: When it comes to CT and radiographic applications, Dunlee leads the way with more selection, locations and technical support than any other imaging components supplier.

As a wholly owned subsidiary of Philips Medical Systems, Dunlee offers the very best in tube technology, with 160 years of combined tube design and manufacturing experience. Through the companies’ joint resources, Dunlee has achieved more technological breakthroughs in tube development than any other tube manufacturer. Whether it’s GE, Toshiba, Philips, Shimadzu, Elscint, Siemens or Picker, Dunlee has the right replacement tubes for all popular systems. Purchasing tubes from Dunlee gives customers freedom from original equipment manufacturer prices and contracts – and access to quality replacements that meet or exceed original OEM specifications. Here David Kuehn, director of marketing and sales for Dunlee, discusses the company’s unique approach to consistently providing top quality, cost-effective replacement tubes, the impact their products have on the medical equipment dealer market, and how current market trends are shaping the industry.

Q: How does Dunlee differ from its competitors?

A: From the service standpoint, Dunlee is very different. We offer technical support 24 hours a day, 7 days a week. Our technicians aren’t just tube engineers – they are CT service engineers. That means when a customer needs help troubleshooting a problem, our people have the broad background necessary to troubleshoot down to the root cause, regardless of whether it’s a tube or system-related problem. That is extremely helpful because there is no way of knowing if the tube is the problem unless you have highly proficient and experienced troubleshooters. We also have 24/7 order and delivery capabilities. With CT, we make every effort to ship the tube to the customer within four to six hours because overnight usually isn’t good enough when dealing with a downed CT scanner. In addition, we have remote stocking locations around the country so we can achieve that four to six hour window. We stock key products in many major metropolitan areas where we have customers, so we can ship them from our airport locations as soon as we receive an order.

Our products also set us apart. Dunlee has pioneered the CT replacement business by approaching it differently. In the past, tube companies used to make an insert to reload into the old housing. They would take the original manufacturer’s housing, try to reuse some of the parts, and then add the insert. Dunlee builds the insert as well as the housing. We don’t reuse old parts or housings from the OEM. This gives us the flexibility to keep inventory around the world because we’re not reliant on getting old housings back from the field. Everything is new when it leaves our facility. It also has pushed quality up another level. By building the housings, we found we were capable of building a tube replacement that actually exceeded the original OEM’s life and performance.

Q: Dunlee has introduced many new products over the past several years. How does Dunlee approach new product development—and how is it able to introduce products so quickly?

A: Our most recent product that has gained global acceptance is the replacement for the GE LightSpeed family of scanners (generally referred to as the Performix tube). This tube has been on the market for more than a year, and we have had great success with it in ISOs and hospitals. We have a complete range of replacement tubes for virtually every GE CT scanner on the market. GE’s install base is quite large, which is why we have focused on those products. In order to decide what we’re going to develop, we look to see where we can add the most value. If there’s a very popular scanner from GE, Siemens or Toshiba, for example, those are the tubes we’ll make replacements for because that’s what the market wants. We also have a unique approach in that we have engineers dedicated to building X-ray tubes for our core family of Philips products. We also have dedicated engineering resources to explore third-party market opportunities to support ISOs, refurbishing companies, service providers and in-house biomedical groups. We never sacrifice one project for the other; we have dedicated resources to pursue both opportunities at the same time.

Dunlee is also unique because we have two X-ray tube manufacturing and development centers – one in Aurora, Illinois, and the other in Hamburg, Germany. In combination, we have about 160 years of X-ray tube design experience, which surpasses anyone else in the industry. Our two development teams work together to bring products to the marketplace more quickly. We leverage our supply chain around the world so we can cut the lead-times on piece parts and bring the overall tube assembly to the market faster.

Q: How does Dunlee distribute its products?

A: We have a very open and above board form of distribution: essentially, we distribute to anyone in the marketplace who needs our products. This includes ISOs; where we do third party service after the original warranty has expired through the OEM, as well as refurbishing companies that restore scanners back to original standards. We sell to in-house groups and hospitals that are looking for an OEM partner to provide the parts and services they need. We also obviously sell through our parent company, Philips Medical Systems. We not only have OEM business for new systems going into the market, but we sell to independent OEMs in the marketplace as well.

Q: What advantages are there for medical equipment dealers?

A: Having access to alternative tubes is really what makes third party service possible. If only the OEM tubes were available, there would be no value equation for a third party to service that equipment. They would have to buy the tube from the original OEM at list price, which negates potential savings for the ISO or hospital.

Q: Is a Dunlee tube as good as the original OEM tube?

A: Dunlee tubes are often better than the original OEM tube. That’s a strong statement, but it’s true. For product development, we bring the original OEM CT scanner into our factory to help us complete the development, testing and validation process and ensure that our tube is either as good as or exceeds the quality of the original OEM tube. We have found that, on average, our tubes last 20-30% longer than the original OEM tube. In CT, that’s extremely important because the cost of the tube can’t be measured just in terms of the initial purchase price. It’s also measured in terms of cost-per-slice. Dunlee isn’t always the least expensive option on the market, but if the Dunlee tube translates into 50,000 more scans in tube life, then it’s well worth using our tube.

Q: What should an ISO consider when choosing a medical component supplier?

A: What advantages can the medical component supplier provide? We have tried over the last few years to expand beyond being just an X-ray tube company. We’ve made some significant acquisitions, which allow us to offer a complete line of glassware -- not just CT, but also a complete family of X-ray tubes, image intensifiers and camera systems. We have three service centers of excellence in the US. Our Aurora, IL, factory is where all CT tube reloading occurs. Dunlee’s-Tubemaster facility in Arlington, TX, focuses entirely on X-ray tube reloading. Our third center of excellence in Richmond, VA, handles all our image intensifier and camera system business.

Q: What is Dunlee’s relationship with Philips?

A: We are a separate business unit within Philips Medical Systems. We see the value in tubes, and within Philips, we view tubes as a business, generating several hundreds of millions of dollars in sales. One out of every two tubes that comes out of our Aurora factory is for the third party customer. That means 50% of our business is geared toward Philips and 50% is for independent companies. Being organized as a separate business unit gives us great deal of flexibility, both in terms of development and in marketing our products. It also gives us the ability to personally develop relationships with customers in the industry.

Q: What’s next for Dunlee?

A: We’ll continue to grow our business by developing new replacement tubes to meet market demands. There are tubes in our product line that we’ve had for six or seven years that our competitors are just now developing. We have brought tremendous value to the marketplace by being the market innovator, and by changing the cost equation for hospitals very early in the product life cycle. We don’t wait until ten years after a scanner has been on the market. We’re right on the heels of the original manufacturer with a replacement that is as good or better. That’s really been the key to the success of our business and will continue to drive our ongoing success. Image intensifier and X-ray replacements are a great complement because customers have the convenience of one source that offers it all.

To ensure business growth, we will be adding more local sales and service facilities worldwide. In 2002, we opened Dunlee Medical Components in Dusseldorf, Germany, and soon we’ll be opening up a service facility in Recife, Brazil.

Q: What new products are on Dunlee’s horizon?

A: We are very close to having replacement tubes for several very popular CT scanners that are being sold in high volumes. We plan to have these new replacements available within this calendar year. Hospitals are looking for these alternatives, and we’re preparing to deliver them very shortly.

Q: What are the current market trends in this industry?

A: There has been a great deal of consolidation. Our competition has dwindled over the past five or ten years. Only the strong can survive in this marketplace. Being linked to a leading OEM makes us strong and gives us stability in terms of financial resources and baseline business. Component manufacturers that don’t have that same advantage may have a more difficult time as the market continues to contract. Tube life is increasing. All of the major manufacturers are building higher quality tubes that last longer and deliver more value to the customer. However, the technology threshold associated with making these tubes has also gone up. That means the small companies that were making tubes are either gone or won’t likely be around long because just don’t have the technology to meet the challenge. With our resources and technology, Dunlee is stronger than ever and well positioned for the future.