For medical device companies, supply chain disruptions are more than just an operational headache—they’re a direct threat to patient care. In an industry where regulatory compliance is non-negotiable and quality standards are among the world’s highest, the ability to deliver products on time isn’t just about maintaining margins; it’s about ensuring that hospitals, surgeons, and patients get the life-saving tools they depend on.

Unfortunately, the pressures on medtech supply chains are only increasing. Global trade volatility, geopolitical instability, climate-related disruptions, and rapid technological shifts are converging, making it more challenging than ever to build a stable, predictable manufacturing pipeline.

However, for medtech manufacturers, one challenge rises above the rest: balancing supply chain resilience with strict regulatory compliance. Unlike other industries, where supply chain pivots can be executed relatively quickly, medical devices require stringent validation, testing, and regulatory approvals. This means companies can’t simply shift production overnight in response to trade policy changes or supply chain bottlenecks.

To stay ahead, medtech leaders need a proactive approach to supply chain strategy—one that prioritizes diversification, risk mitigation, and flexibility at every level. The old model of optimizing for cost and efficiency alone no longer works. The companies that will thrive in this new landscape will not only be able to react quickly to disruptions—they’ll also be able to build resilience into their supply chains before disruptions occur.

Navigating regulatory and trade policies isn’t just a compliance exercise—it’s a core part of maintaining a stable and resilient supply chain. Compounding stringent validation processes, U.S. Food and Drug Administration (FDA) and EU Medical Device Regulation (MDR) oversight, and long lead times for supplier qualification, as well as any shift in trade policy, tariffs, or regional regulations can have far-reaching consequences, from cost increases to supply chain bottlenecks that could delay critical medical innovations from reaching patients.

Trade policies are in flux, and medtech companies must keep pace with evolving regulations in key markets like the United States, the European Union, and Asia. Tariffs, new compliance requirements, and regional trade agreements can significantly impact manufacturing costs and supplier relationships.

The Trump Administration’s on-again, off-again tariffs have validated last year’s concerns about escalating trade wars among 89% of manufacturing and supply chain leaders. With new levies possible on imports from most of America’s trade partners, U.S.-based medical device manufacturers face increased costs on everything from precision components to raw materials. Meanwhile, retaliatory tariffs from other countries could disrupt access to critical inputs needed for production. Companies that rely heavily on a single country for sourcing—whether for medical-grade polymers, surgical instrument components, or electronics—are particularly vulnerable.

In response, medtech manufacturers can implement several strategies to reduce the impact of tariffs and trade policy changes:

• First Sale: Allows businesses to reduce imports’ customs value by using the price paid in the initial transaction rather than the final price paid by the importer.
• Tariff Engineering: This process involves designing or altering a product’s characteristics such as its composition or assembly method, to qualify for a lower tariff classification.
• Country of Origin Strategies: Shifting production to a country with more favorable tariff treatment can reduce costs, though this requires significant planning and regulatory alignment.
• Free Trade Zone (FTZ)/Bonded Warehouse: Establishing a staging location for products can delay import duties and allow for modifications that result in lower tariff designations.
• Duty Drawback: Enables businesses to pay import duties upfront and later file for reimbursement when products are re-exported outside of the U.S.

While some of these options provide immediate cost reductions, strategies such as Country of Origin shifts or FTZ/Bonded Warehouses require proactive, long-term planning. Medtech companies that integrate these approaches into their supply chain strategy will be better positioned to navigate ongoing trade uncertainties and ensure continued production stability.

With the regulatory and trade landscape constantly evolving, medtech manufacturers must move away from short-term, reactionary thinking and embrace a proactive approach to global supply chain strategy.

In the past, many medtech manufacturers could get away with relying on a lean, centralized supply chain model to prioritize and maximize efficiency and reduce costs. But today, efficiency alone is no longer a winning strategy. Instead, companies that prioritize flexibility and regional diversification are better positioned to navigate the increasing volatility in trade policies, tariffs, and geopolitical disruptions.

Medtech supply chains are particularly vulnerable due to the added complexity of stringent regulatory requirements that make shifting suppliers or geographies a complex, time-consuming process. That’s why companies need to build resilience into their supply chains before disruptions occur because waiting until a crisis hits is too late.

The first step in diversification is identifying potential weak points in the existing supply chain. Companies should assess:

• Single-source dependencies: If a critical component, like a sterilized surgical instrument or an orthopedic implant, is sourced from only one region, how exposed is the business to trade disputes, tariffs, or regulatory delays?
• Regulatory compliance risks: Can manufacturing be shifted between geographies without requiring a new round of FDA, MDR, or NMPA approvals?
• Supplier visibility: Do companies have clear insight into sub-tier suppliers, or are hidden dependencies creating unseen risks?

A comprehensive analysis of where the supply chain is most exposed allows medtech manufacturers to make proactive decisions about where and how to diversify.

To avoid being locked into a single location, companies must develop a multi-region strategy that allows for optionality in case of disruptions. Some key approaches include:

• Geographical Optionality: Expanding operations beyond one hub allows companies to quickly adapt when trade policies shift.
• China+1 strategy: Keeping some production in China while adding secondary facilities in Vietnam, India, or Mexico to reduce reliance on a single country.
• Nearshoring or onshoring: Investing in U.S.-based or Mexico-based production to mitigate tariff risks and regulatory inconsistencies.
• Regional Compliance Adaptability: Designing manufacturing processes that are flexible enough to comply with both FDA and MDR requirements from multiple locations.
• Deploying Onsite Teams: Having local teams in key markets to oversee quality assurance, ensure compliance, and mitigate risks.

Establishing geographic optionality and deploying onsite teams comes with significant resourcing challenges. Companies can invest in building the necessary infrastructure, staffing, and supplier management systems from scratch, but doing so requires extensive capital, expertise, and operational bandwidth. All this potentially comes at a time when 77% of leaders report a lack of resources severely impacting their ability to manage their supply chain effectively.

For many, a more effective solution is to develop strong strategic partnerships, including with on-demand digital manufacturing and supply chain solutions providers. These partnerships enable companies to leverage pre-established infrastructure, supplier networks, and regional expertise without further overloading their in-house engineering and supply chain staff. 

By working with partners that already have vetted manufacturing capabilities across multiple geographies, medtech companies can achieve flexibility and risk mitigation faster and more efficiently than building everything in-house.

Medtech companies invest heavily in R&D to develop innovative capabilities and technologies. Yet long-term success isn’t just about developing cutting-edge products—it’s about ensuring they can be manufactured, scaled, and delivered reliably. A strong industrial strategy ensures that supply chain execution aligns with corporate growth objectives, mitigating risks while enabling global expansion.

A resilient supply chain ensures regulatory compliance and quality assurance, allowing companies to maintain international standards across multiple manufacturing sites. This safeguards product integrity and prevents costly disruptions due to regulatory misalignment.

Time-to-market is another critical factor. Bringing life-saving medical innovations to patients faster requires a supply chain that can adapt quickly to shifting trade policies, supplier disruptions, or capacity constraints. Companies that invest in multi-region sourcing and on-demand manufacturing reduce the risk of delays.

Cost efficiency certainly remains a priority, but the lowest-cost supply chain isn’t always the most sustainable. Balancing cost control with diversification and risk management helps companies avoid the pitfalls of over-reliance on a single region or supplier.

Further, for companies expanding into new markets, supply chain resilience ensures scalability without compromising regulatory or logistical capabilities. The ability to adjust sourcing and production strategies regionally allows medtech companies to navigate market shifts more effectively.

Ultimately, integrating industrial strategy into corporate planning means treating supply chain resilience as a growth enabler, not just an operational safeguard. Those who proactively align supply chain strategy with long-term business goals will gain a lasting competitive edge in the evolving landscape.

The biggest mistake medtech companies can make is assuming they have time to adapt. It’s no surprise, then, that supply chain initiatives such as improving visibility, resilience, and agility have topped companies’ lists of business priorities in recent years. The most successful manufacturers are not waiting for the next disruption to force their hand—they’re actively redesigning their supply chains for resilience and agility.

The industry’s future belongs to those who recognize that supply chain strategy is business strategy. Companies that invest in diversification and proactive risk management will avoid disruption and set themselves up for long-term competitive success.

Dave Evans is CEO and co-founder of Fictiv, a global supply chain and manufacturing company for custom mechanical products. Evans is a regular contributor for Fast Company and Forbes, has been featured on NBC News, Nasdaq, TechCrunch, and Discovery, and was named to Forbes 30 Under 30 List. He can be reached at fictiv@5wpr.com.