Supply chain disruptions are one of the most prevalent challenges in the medical device industry. They can occur due to a myriad of factors, including natural disasters, political instability, or economic downturns.

These can lead to delays in the delivery process, causing delays in patient care. Supply chain disruptions also result in cost overruns thanks to the high cost of raw materials and the associated production costs.
Ensuring supply chain stability requires that medical device companies continue to optimize their supply chain and enact stringent risk mitigation measures. Optimizing the medical device supply chain includes both strategic planning and tactical implementation.

To address the continued interest in medtech supply chain trends and issues, Medical Product Outsourcing conducted a survey in order to get an idea of what’s happening in the thick of the medical device supply base.

When polled about the most popular locations for companies’ manufacturing suppliers, most indicated the United States, with over half located in the Midwest. Mexico, Europe, and Asia were also popular choices of regions where their manufacturing suppliers are located.

About half of the survey respondents indicated they had no plans to adjust their number of suppliers. However, the remaining half said they either plan to increase or reduce their number of suppliers. Many respondents said they wished to do this to pursue lower costs and shorter delivery times.

Also prevalent was the desire to fuel an increase in production. “[We are] primarily focused on cost optimization, operational efficiency, and risk management,” one respondent said.

Another hoped to achieve a “competitive advantage, reduced dependency, [and] address poor performance,” while one respondent seeks to have “more options of suppliers, which can reduce risks associated with the supply chain.”

The types of manufacturing and ancillary services that are sourced to third parties cover a large portion of medical device manufacturing. Many survey respondents indicated they currently source machining and molding services for machined and molded components, as well as tooling. Catheter components and coating were also prevalent among the responses.

Also common were components like copper wire, silicone wire, PVC tubing, stainless steel tubing, specialized wire, plastic housings, breathing tubes, converted pouches/Tyvek, and thermoformed trays.
Raw materials were very commonly cited as a main target for sourcing. These included plastics, PVC, PE, ceramics, stainless steel, titanium, cobalt-chrome, silicone, polycarbonate, rayon, rubbers, nylon, PMMA, and precious metals.

About as high on the list of sourced components were electronics, which is a reflection of the medical device industry’s continued digitization and introduction of smart technologies. Respondents named electronics, connector components, RF amplifiers, high-voltage/current components, and ventilators as the main types of components.

When asked the types of materials, components, sub-assemblies, and/or services they would consider sourcing in the future, the list mirrored that of the most common types of manufacturing and ancillary services already sourced to outside organizations. Respondents specifically pointed to boards, PCB boards, power supplies, computing network devices and materials, full assemblies, plastics, tubing, metals, cables, connectors, and resins as their wish list to bring to an outside manufacturer.

When polled about the most substantial pain points concerning their supply chain, one response was most poignant—lead times and availability. Nearly half of the respondents cited this issue as the one that’s keeping them up at night.

Cost pressures are also a struggle for manufacturers, as over a third of the survey-takers pointed to this issue. Price increases and prohibitive transport costs were pointed out by several, and one respondent said the “supply chain bull-whip (idled suppliers deciding how and if they want to invest resources, moving forward)” was a particularly challenging aspect for them.

Regulatory compliance challenges (expectedly) landed high on the list of manufacturers’ pain points, along with quality assurance. A few also cited that finding suppliers was proving to be difficult for them.
Tariffs and logistics issues are also creating an uncertain environment for medical device manufacturers. One respondent said that “suppliers [are] unable to scale, and geopolitical conditions today make it challenging to do business and ensure supply continuity.”

Another pointed to “lack of visibility and transparency, quality issues, risk management/geopolitical, and economic instability/over-reliance on ‘just in time’ inventory were negatively impacting their business.
Concerns about the greater medical device industry were similar, with cost pressures landing near the top of the list. General costs, FDA registration costs, and raw material costs were heavily mentioned by the survey respondents. Delivery times also figured once again into manufacturers’ concerns.

Also present were the difficulties with FDA registration, and the uncertain economic environment created by the evolving tariff discussion. One respondent also declared there is “too much stuff off-shore, with payments, exchange rates, graft, and tariff problems.”

One survey-taker said there was a struggle “being caught between rising supply costs and diminishing reimbursements,” while another cited “an oversaturated market” as a point of concern with the medical device industry.