Contract manufacturing
Repairing a fragile
supply chain
he healthcare supply chain has long been fragmented and complex. The Covid-19 pandemic showed how fragile global healthcare supply chains really are, but even before the pandemic, original equipment manufacturers (OEMs) within the medical device industry had been subject to a range of issues – predominantly centred around the procurement of raw materials from a range of sources, leading to a supply chain that is reliant on many different players and countries.
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The cost of supplies is one of the biggest expenses for OEMs because of these supply chain issues, and the situation has not improved in recent years as ongoing trade tensions, tariffs and geopolitical instability have continued to affect suppliers. OEMs need to be leaner and more agile given current global events, so many have started to onshore production with the help of contract development and manufacturing organisations (CDMOs). In the long run, this switch will help to stabilise the supply chain for many companies without needing to invest significant capital in their own infrastructure, reducing the risks and costs associated with onshore manufacturing. Medical device manufacturers are part of a fragmented and fragile supply chain, where surges in demand are often hard to predict. Surgeons only request medical devices when they are needed because unused devices must go through rigorous decontamination stages if they are to return to the supply chain. This can lead to shortages if materials and components are not easily available at the time of need, but it is also hard to keep a
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www.medicaldevice-developments.com
From rare earth choke points and geopolitical flashpoints to paediatric
device shortages, the medical device supply chain has never been more exposed. Partnering with contract development and manufacturing organisations (CDMOs), OEMs are reshoring production, navigating complex regulations and building in redundancy – trading capex- heavy plants for flexible, localised networks that promise greater resilience when the next disruption hits. Liam Critchley speaks
to Professor Tinglong Dai of Johns Hopkins University about contract manufacturing and supply chain resilience.
gualtiero boffi/
Shutterstock.com
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