5 Trends in Medical Device Outsourcing for 2024

Updated on February 8, 2024

Medical device companies continue to push the boundaries of innovation, creating increasingly intricate products with numerous components. These surges in complexity are making medical device companies rethink the way they design and manufacture their products. In this evolving market, here are 5 pervasive trends to watch out for in 2024.

1. Moving Away from the Manufacturing Sites of 20 Years Ago

In the 1990s and early 2000s, many companies outsourced their entire production cycles to China and other parts of Asia for more affordable labor and shipping and fewer regulatory requirements. However, with the disrupted supply chains of the COVID-19 pandemic, increased tariffs on China, and other geopolitical factors, it has become more expensive and less reliable to manufacture and ship at scale from this market. 

Many companies have chosen to shift their operations to nearshore and onshore facilities over the past few years in response. In 2024, expect to see this shift in resourcing expand for medical device manufacturers, especially as they find new efficiencies, automation angles, and strategic partnership opportunities closer to home that don’t compromise product quality or timely deliveries.

2. Coping with a Scarce Skilled Workforce

Medical device manufacturing and the devices themselves are growing more complex. This has made it increasingly difficult to find and afford competent staff capable of designing, creating, and maintaining this equipment throughout its lifecycle. The medical device sector faces a persistent challenge in recruiting and retaining skilled engineers and other personnel for research and development (R&D) and manufacturing roles. 

To overcome this shortfall, companies are outsourcing either one or both elements to access specialized expertise and resources. This not only gives medical device OEMs the ability to fill in strategic gaps on their teams but also makes processes more affordable and elastic. When partnering with a third party, OEMs can ramp up or down these resources as needed; they don’t need to keep someone on payroll whose work may only be needed in spurts.

3. Outsourcing for Footprint Reduction and New Efficiencies

Many medical device companies are adopting footprint reduction strategies, which involve streamlining operations and focusing on core competencies. This strategic shift often leads to outsourcing certain device manufacturing processes and activities. 

For example, companies recognizing their strengths lie in ideas and intellectual property (IP) rather than manufacturing are increasingly outsourcing manufacturing tasks. This shift allows them to focus their internal capital and time on developing and refining product ideas. Reshoring and onshoring are important pieces of this puzzle, as bringing manufacturing to a nearby and more stable market prevents medical device manufacturers from tying up too much of their capital in faraway places. This proximity provides better oversight and control. 

4. Investing in More Comprehensive Process Automation

While many medical device manufacturers have invested in some form of automation, it’s predicted that a growing number will move toward more comprehensive process automation in 2024. This approach offers numerous benefits, including replacing unavailable or expensive labor assets, improving overall product quality and scrap rates, speeding up time to market, and assisting organizations in monitoring and complying with relevant regulations.

The problem that many organizations face is limited internal knowledge of how process automation should be designed and maintained. To address this issue in 2024, we’ll see more of these companies partnering with automation companies that specialize in process manufacturing and are familiar with stringent healthcare and consumer product regulations.

5. Partnering With R&D, Manufacturing, & Automation Experts

The medical device industry is marked by rapid technological advancements and innovation. Companies are increasingly seeking to expedite their time to market by outsourcing essential functions such as R&D, manufacturing, and automation, enabling them to keep pace with evolving market demands. 

In 2024, expect to see more companies partner with experts who demonstrate experience in not just one but all three key areas. Partnering with one company not only reduces risks and incompatibilities throughout the production lifecycle but also creates a more streamlined production model so technologies are brought to market faster.

Outsourcing as an Equalizer

Larger medical device manufacturers are already working on these new efficiencies, but many smaller OEMs are struggling. To level the playing field, many smaller companies are beginning to outsource R&D, manufacturing, and automation to third-party experts. Outsourcing error-prone and intricate processes helps these companies gain a more equal footing with larger manufacturers, contributing to a more diverse range of products and ideas in the market.

These trends mark a substantial shift in how medical device companies are strategizing their operations. They aim to prioritize agility, access specialized expertise, and create more efficient processes. 

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Todd Martensen

Todd Martensen is Chief Commercial Officer at Ascential Technologies, Medical & Life Sciences. He has a wealth of experience in sales and management, with a focus on the medical sector. With a background including roles at Cordis, B.Braun, Alveolus (acquired by Merit Medical Systems), Danaher Corporation, KLOX Technologies Inc., and Benchmark Electronics, Inc., Todd has demonstrated expertise in leading global business operations. Todd holds a bachelor’s degree in marketing from Arizona State University,