Before the pandemic, China made about 28% of the world’s manufactured products and 13.45% of global exports by 2018. It was the main place for making medical devices and active pharmaceutical ingredients (APIs). The United States got over 97% of important personal protective equipment (PPE) and about 80% of APIs from China and India. For example, 95% of ibuprofen and 91% of hydrocortisone used in the U.S. came from China.
When Covid-19 began, factories in China, especially in provinces like Hubei, closed down. This caused big problems in supplies. Medical supplies and devices became very hard to get. Medical administrators had to deal with delays and shortages, which made patient care difficult. The pandemic showed that relying too much on one country was risky. Temporary trade bans and shipping problems made things worse.
China’s advantage in making products has dropped because labor costs have gone up. The average monthly wage in China went from $55 in 1990 to about $990 in 2018. This is higher than wages in countries like Mexico and Vietnam, making China less cheap for making products that need a lot of human work.
Because of this, 83% of companies in North America and 90% in Europe plan to make their supply chains less dependent on China. This trend is not just because of costs. Political and economic issues, like national security and trade fights between the U.S. and China, also play a role.
Diversifying supply chains lowers the risk of depending on one country or area for key medical supplies and devices. It also helps companies stay flexible and ready for future problems caused by health issues, politics, or economic changes.
Countries like Vietnam and Mexico are becoming important places for making medical devices in this new situation.
Ross Meyercord, CEO of Propel Software, says Vietnam may soon take China’s place as the main manufacturing hub in Asia. This change happens partly because companies want to move to places seen as more stable and clear in their rules.
Mexico is growing as a smart place to manufacture things too. It is close to the U.S., so shipping is faster and supply chains work better. Investments in infrastructure, better rules, and a skilled workforce help Mexico handle complex and high-tech manufacturing.
Joe Darrah, a journalist who writes about medical technology, says Mexico’s improved infrastructure prepares it well for growth. Policies like the CHIPS Act in the U.S. support high-tech making and encourage companies to build factories closer to the U.S.
Some might want to bring medical device manufacturing back to the U.S. (called onshoring) to avoid risks. While this can cut down on problems with shipping and trade, it has downsides.
Making products in the U.S. often costs more. This can raise prices for healthcare providers and patients. It may also limit new ideas because higher costs reduce money available for research and development.
Also, relying only on domestic supply chains does not remove all risks. Problems with local infrastructure, labor issues, or policy changes can still happen.
A better plan is to diversify across several countries and regions. This spreads risk and lets companies use different economic strengths and manufacturing abilities worldwide.
Following rules is very important in medical device making and supply. The FDA plays a big role in approving devices for the U.S., and keeping high quality standards is required.
Experts like Adam Hesse, CEO of Full Spectrum Software, believe simpler rules might come in the future. These could make it easier to perform studies by only needing board approvals. Faster studies can help bring safer and better devices to market sooner.
Law changes, like the CHIPS and Science Act, support making high-tech products in the U.S. They also encourage using new technologies.
Companies must watch these laws closely and include compliance teams when planning supply chains to do well in this new environment.
Healthcare leaders and IT managers know that handling device stocks, deliveries, and services is getting more complex. AI and automation offer helpful ways to meet these problems.
AI is no longer just a test — it now helps improve productivity and decision-making in manufacturing. In medical device making, AI can predict supply chain issues, improve inventory management, and help with quality control.
Dave Evans, CEO and co-founder at Fictiv, says AI systems watch trade rules, regulation changes, and supplier performance all the time. This real-time information helps managers make smart decisions fast and avoid delays or shortages.
At medical offices, AI-powered automation can improve communication and coordination. For example, Simbo AI offers phone automation and answering services that reduce mistakes and increase efficiency.
Automating appointment bookings, patient messages, and supply tracking frees staff to focus more on patient care instead of paperwork. Automated supply alerts help ensure that important devices and supplies are ordered on time and do not run out.
Using AI in making and running medical devices allows companies to connect data from device use back to research and development.
Joe Darrah says companies that use AI data from hospitals to improve device designs gain an advantage. These ongoing improvements help make devices safer, better performing, and less costly.
AI also supports predicting when equipment needs maintenance. This reduces downtime for critical medical tools.
Engage with Suppliers: Work closely with device makers to learn where production is moving and how this may affect delivery times.
Monitor Regulatory Changes: Stay informed about FDA rules and import policies that might affect approvals and shipments.
Adopt AI Tools: Try AI-driven automation like Simbo AI to improve admin tasks and supply orders.
Diversify Procurement: Buy devices or parts from many suppliers in different places to reduce dependence on one country.
Plan for Delays: Add extra time in buying plans to handle shipping delays caused by global changes.
Collaborate with IT Teams: Connect supply tracking with practice software to get real-time inventory info and automatic reorder alerts.
The supply chain is expected to shift significantly, with companies diversifying manufacturing locations from China to countries like Vietnam and India, utilizing AI for efficiency, and adapting to geopolitical and regulatory changes.
AI will evolve from experimental applications to practical solutions, improving productivity and decision-making processes across manufacturing and operations in the medical device sector.
Regulatory compliance remains critical as companies navigate complex frameworks to maintain quality and access to markets, impacting product development and innovation.
Companies can mitigate risks by diversifying sourcing regions, investing in advanced manufacturing technologies, and developing strong supplier relationships to enhance flexibility and resilience.
Vietnam is poised to become a manufacturing leader due to its robust infrastructure, AI adoption, and companies’ shifts away from China, leveraging its manufacturing capabilities.
Investing in digital twins, IoT, and predictive analytics can enhance efficiencies, optimize operations, and support remote monitoring within manufacturing processes.
Companies that develop and integrate AI into their products effectively, ensuring continuous advancements, will outperform those that only release initial versions without substantial infrastructure.
Establishing regulatory affairs teams to track and adapt to policy changes, while leveraging incentives for innovation, is crucial for maintaining compliance and competitiveness.
Mexico is modernizing its infrastructure, becoming a high-tech manufacturing hub due to enhanced facilities and a skilled workforce, making it strategically advantageous for companies.
Under federal support initiatives like the CHIPS and Science Act, U.S. manufacturing is transitioning towards high-tech production, focusing on integrating advanced technologies and skilled labor into operations.
Simbo is using AI agents to automate all phone related workflows. Connect now to know more.
Schedule AI Agents Demo Now© Since 2019, Simbo AI.
