10 considerations for creating a resilient medical device supply chain

Last fall, in a statement about its customer survey and corresponding research, Aymeric Chandavoine, president of A.P. Moller – Maersk’s European operation – captured the essence of supply chains today. Commenting on the company’s report “European Business Resilience 2024,” Chandavoine noted “If there is one thing that we have learnt lately, it’s that disruption is imminent, and we also know from our customers that they see it that way. But very importantly, we see that European businesses are conscious that the best way to tackle disruption is increasing resilience in supply chains.”

His remarks were notable not only because they reflected the sentiments of supply chain leaders throughout Europe, but because they so succinctly capture how prone supply chains are to disruption today. But disruption of course isn’t limited to Europe, Maersk’s customers, or even the global shipping container industry. Nor is it new.

Pandemics, port strikes, piracy, weather events, and tariffs are longstanding impediments to commerce and the supply chains powering it. What’s new is how quickly these disruptions can impact tightly integrated, global supply chains more complex and faster than ever before, including those for medical devices.

In a time when components can move across the globe in hours, not months, the impact of events in the headlines can be immediate. There are also the unknowns in supply chains, something we have seen most recently in fluctuating U.S. tariff policies, that can make planning and large capital projects difficult.

Uncertainty, of course, is a universally shared hurdle across industries. But as it relates to medical devices, the stakes are higher. Stringent regulatory and compliance requirements often result in long lead times, particularly if components require re-registration or redesign. As a result, supply chain resiliency, and the proactive action it calls for, is even more important for medical device manufacturers than their peers in other fields.

Fortunately, there are 10 considerations manufacturers can address, implement, and frequently review to ensure their supply chain is built on a strong foundation and governed by a thorough approach mitigating risks and ensuring the organization has the functionality needed to address disruptions that absolutely will and do occur.

The resilient medical device supply chain

Creating an effective, and therefore resilient, supply chain is never a cookie-cutter endeavor. The manufacturing process for every device – from instruments to implantable, and from clinical apparatus to those for one-time use – is unique. There are, however, broadly applicable best practices and strategies that can be applied to virtually every medical device supply chain.

Ideally these are inherent in the processes and policies manufacturers put in place and regularly revise to ensure the principles defining a resilient supply chain are adhered to and become part of the muscle memory and culture of the manufacturer’s way of doing business. In some organizations, some are more applicable than others, but all should be considered.

1. Develop a resiliency mindset: There’ll always be supply chain disruptions. The question is how as an organization do you want to manage them? By accepting they’ll occur and creating a supply chain risk mitigation plan, manufacturers can outline the steps and procedures taken in the event of a disruption. They can also identify opportunities to nearshore and reshore suppliers and contract manufacturers to simultaneously decrease risks and distances. In this way, supply chain leaders can remove much of the panic and chaos typically accompanying unexpected events. That’s why developing a resiliency mindset and proactive preparedness is the first step in creating a resilient supply chain, but it’s an evolution requiring deliberate action.

2. Optimize your inventory strategy: Inventory management is the heart of the resilient supply chain. Getting it right requires organizations to strike a delicate balance between having enough supplies on-hand to support operations and order fulfillment and to manage the capital tied up in them. This balance must be constantly managed and is the critical component enabling operations to remain up and running when disruptions hit. For these reasons it’s imperative to always know what your most critical components are, where you’re getting them, from whom, and what optimal on-hand volumes look like. It should also be known if these items can be re-sourced from someone else if needed.

3. Achieve visibility and traceability: Do you know where the key components in your supply chain are? Quickly identifying affected lot numbers or specific products during the manufacturing process or post-production can spell the difference between an inconvenience or the recall of an entire product line and loss of associated revenue. Traceability is also crucial for regulatory and legal reasons, and most importantly to ensure optimal patient health outcomes, particularly when working with implantables for which even a traditional recall is problematic at best.

4. Create a thorough and comprehensive risk mitigation plan: If you want to call your supply chain resilient, you must have a risk mitigation plan in place outlining every aspect of what you know could go wrong, assigning roles and responsibilities, and specifying which processes will be followed. By default, such a plan will include comprehensive sub-plans focusing on specific threats including cyberattacks, supplier disruptions, component or materials failures, recalls, etc. Stakeholders from throughout the organization should be included in the creation of the risk mitigation plan. Notably, the plan must also coordinate all processes with the operations team to ensure the organization is flexible and able to pivot quickly and effectively when disruptions hit.

5. Determine where heavy lifts are needed: Do you know which products or components will require a heavy or time-consuming lift if re-sourcing is required? Where do your vulnerabilities lie? Are you relying too heavily on one supplier or one region for a needed alloy or composite? Which materials would require you to re-register a product or resubmit for certification? By periodically assessing such concerns, manufacturers can identify where risks lie and also what plans are needed to mitigate them.

6. Diversify your suppliers: It’s no secret overreliance on a single supplier can hurt an organization’s ability to do business if the supplier fails to meet its obligations. But don’t wait until a disruption occurs to find alternatives. Having a diverse supplier base requires proactive vetting of additional partners. It also often means investing in capacity from them so they’re already providing supplies when their support is needed.

7. Foster genuine supplier relationships: Do you have real relationships with your suppliers or is your organization transactional? Real supplier relationships foster resilience, but they require strong, regular communication and a concerted effort to streamline supplier onboarding processes. Creating strong partnerships with suppliers is a process requiring mutual effort.

8. Monitor supplier risk profiles: Actively measure the performance of suppliers and don’t let red flags go unnoticed. Scorecards should measure parameters such as on-time delivery, quality, and how the supplier reacts to corrective or preventive measures. Red flags associated with problems in any of these areas should be addressed. Mergers and acquisitions, the financial health of the supplier, and where they source their components from should also be explored and tracked.

9. Embrace technology, but not for technology’s sake: Having systems in place allowing information to flow electronically is imperative to ensure your company is easy for suppliers to work with. Solutions such as those associated with predictive analytics should also be explored and vetted for the risks they introduce and the opportunity cost of not innovating.

10. View resiliency and cost savings in a new light: Supply chain leaders often speak of balancing resiliency and costs, but balancing infers they are competing objectives. Instead, view both as part of the same process. Look at where risks lie, pose what-if scenarios, identify savings opportunities, and determine where spending to increase resiliency is a financially sound approach. Remain focused on the big picture.

By keeping these considerations in mind you can embrace, pursue, and achieve real supply chain agility. Though often clichéd, supply chain agility fundamentally means you’ve taken the proactive steps to do all the little things required every day to keep a medical device supply chain performing at its best. When that happens supply chain leaders, and those they serve, gain control, confidence, and peace of mind.