BATTLE CREEK — As someone who has served on a hospital board for more than a decade, Erick Stewart is keenly aware of the financial challenges associated with these health care organizations.
The issues those companies face have become even more crippling as the country trudges through the COVID-19 pandemic.
“When you’re on a hospital board, you’re in the room and you understand the challenges — especially the financial challenges — of a hospital,” said Stewart, the president of Battle Creek-based STEWART Industries LLC who has served on the Bronson Battle Creek Hospital board for 13 years, as well as its financial investment committee. “That’s a hard business and now you put a pandemic on top of that, where you need more money going out the door than maybe you have.”
Stewart looks to help address those challenges by leveraging the existing capabilities at his company to launch a new division called STEWART Medical.
The medical device division of STEWART Industries specializes in manufacturing and distributing medical equipment such as disposable heat and moisture exchangers, three-ply surgical masks, natural sanitizers and other forms of personal protection equipment.
Stewart wants this new venture to help curb the price-gouging epidemic that hospitals and medical organizations often face because they are beholden to antiquated purchasing systems that leave them at the mercy of gougers once their normal supply chain has run dry. During the pandemic, that supply ran dry almost immediately.
“I take it as my personal responsibility as someone who understands how a hospital system works both inside and out, to give the hospitals, health care agencies and other places that needed vetted, proper equipment an opportunity to get just that without being worried about being taken advantage of,” Stewart said.
The new division was less of a pivot and more of a refocusing of the capabilities STEWART Industries already had in its facility.
Established in 2000, STEWART Industries is a minority-owned business that specializes in assembly, inspection and new product innovations for a host of sectors, including the automotive and aerospace industries.
In 2017, STEWART Industries enhanced its quality management system by achieving ISO-13485 certification for the medical device industry, which meant that the company has been working with clients in the medical space long before the COVID-19 pandemic descended on the country.
The new STEWART Medical division also looks to leverage the company’s Foreign Trade Zone certification, which was granted in 2019 and offers tariff reduction and duty elimination for imports.
In fact, when STEWART encountered clients that wanted to use the FTZ to import medical supplies, that’s when Stewart and his staff identified the potential niche.
Stewart said his team was immediately welcomed by many hospitals and health care agencies, standing as a credible, local business to help with supply chain needs as opposed to the many shadowy businesses looking to charge top dollar even though they were unable to ensure the quality or integrity of the supplies.
“We were able to use our supply chain expertise and go out into the market and qualify different sources using the same standards we use for aerospace, automotive and our medical customers,” Stewart said. “We came across guys, who I think are in their basements, saying I have a warehouse of whatever. That’s what (hospitals and health care agencies) were afraid of.”
“I talked to a couple hospitals and they were like ‘Oh, you’re a real company?’ and I was like ‘Yeah,’” Stewart added. “(We can tell them that) we have vetted and certified that a product is real and that it meets quality standards that are suited for you and we can get them in your hands.”
The COVID-19 pandemic has ignited an understandable surge in demand, but even after the pandemic subsides, Stewart still sees his new division filling a great need in the market.
Having conversations with hospitals and other medical establishments highlighted the fact that many of the staple supplies and PPE aren’t made in America.
“We’re not making a whole lot of medical products in the United States is what we’re finding out,” Stewart said. “I’ve had a lot of hospitals say, ‘Man, if you could make something we can buy from you, we’d much rather buy local now.’
“For the past three months, we have been working toward looking at specific products that we can distribute and establish relationships (with clients) and start manufacturing certain types of medical products here at STEWART Industries. My ultimate goal is to have STEWART Medical-marketed items that we can do in our own country to add value to our own hospital systems.”
While the medical division is poised to spur business for STEWART Industries, Stewart emphasized that his company has weathered through many of the same pains as fellow small businesses in the local community.
“STEWART, as a small business, is in the same boat as everyone else trying to survive this COVID thing,” he said.
“We’re back to work,” Stewart added. “Our customers have come back online — they may not be at the same quantity, but at the end of the day, we are working. The struggle is protecting folks at work and making sure they’re following the proper protocols and protecting themselves.”