Players in the medical products industry must create resiliency, capacities, and capabilities in their supply chain.
Medical products manufacturing is gaining momentum as companies want to build resilience to mitigate risk in the supply chain. Executives have realized that they must better control their end-to-end supply chain to ensure supply as geopolitical risks, vulnerabilities, and disruptions continue to arise while tariffs also push companies to build domestic capacity. Since most medical products rely on imports within the end-to-end supply chain, it will require significant increases in manufacturing, mining, and construction to support scaling production.
Resiliency and Risk of Paramount Importance
Geopolitical risk is driving the need for resilience to mitigate risk in the medical products supply chain. According to a survey conducted by Supply Chain Dive’s studioID, in partnership with DP World, 82% of respondents view geopolitical events as a moderate-to-significant risk to their supply chains. In addition, there was a median revenue loss of 5% with a third of respondents reporting even greater impacts. Since the end-to-end supply chain is dependent on hot spots of geopolitical risk such as China with dependence on rare earths and key starting materials (KSMs) to support active pharmaceutical ingredients (API), it has become clear that executives must take better control and secure supply.
In addition to geopolitical risk, the medical supply chain must also prepare for other likely risks and vulnerabilities. For example, the exploding pagers in Lebanon illustrated the critical need to secure your end-to-end supply chain especially in industries like medical devices. Cyber risks can wreak similar havoc. And regular disruptions such as weather events can severely impact the medical supply chain, just as Hurricane Helene caused widespread shortages of IV fluids when the Baxter facility was shut down.
Creating Resiliency, Capacities, and Capabilities in the Medical Products Supply Chain
As executives have seen what’s coming down the pike and the continued disruption in the global marketplace, they are acting. According to Deloitte’s life-sciences outlook, 48% of medtech leaders see manufacturing/supply-chain risk as a significant strategic swing factor for 2025. The Health Industry Distributors Association (HIDA) found that 88% anticipate movement out of China with 52% anticipating reshoring and/or nearshoring. The bottom line is that companies have realized they must address the need for resiliency and build capabilities to mitigate risks and ensure customer success.
Supply chains are on the move. There have been investments announced that convey scale (in the billions) as well as scope (APIs, biologics, medical device manufacturing, etc.) that will drive manufacturing, mining, and construction in the supply chain. For example, Cambrex announced a $120 million investment to expand its API facility in Iowa, which will increase capacity by around 40%. Abbvie Inc. committed to building a facility to expand API production at its North Chicago, Illinois, site. And Novartis AG is investing $23 billion over five years to expand its U.S. manufacturing and R&D footprint.
In addition to taking control of supply chains with domestic and close-proximity production, companies are finding strategic partners. There is no way to scale up fast enough to meet the demand as tariffs go into effect and as risks come to fruition, and so forward-thinking companies are finding creative partnerships. For example, the only U.S. manufacturer of antibiotics, USAntiobiotics, is partnering with Walmart and McKesson to onshore the production of amoxicillin to the U.S. There would have been no way to scale fast enough without their collective strengths and ability to invest. Similarly, the U.S. government has partnered with private industry on rare earths, is freeing up red tape with deregulations, and has developed critical minerals deals with countries such as Thailand to stimulate capacities and capabilities.
Companies are also pursuing SIOP (Sales Inventory Operations Planning) in conjunction with artificial intelligence and advanced technologies to create resilience, predictive, and what if capabilities to support the ability to rapidly scale and pivot as needed to meet customer requirements. For example, a medical products manufacturer reallocated production among plants to mitigate the impacts of tariffs and looked at predictive forecasts to prepare their end-to-end supply chain to secure materials at the lowest cost. A medical device manufacturer utilized additive manufacturing, robotics, and automation to scale rapidly to mitigate risks and scale up to meet customer needs while minimizing costs.
The Bottom Line
As geopolitical risks and supply chain vulnerabilities increase in number and depth, it has compelled executives to re-think their end-to-end supply chain. Creating resiliency, capacities, and capabilities have emerged as a critical necessity to mitigate risks and ensure scalability to meet customer needs while ensuring profitable growth. Reshoring, nearshoring, expanding domestic manufacturing, and strategic partnerships are integral to achieving these objectives. Forward-looking companies are also utilizing SIOP and AI to power smart supply chains and smarter decisions.
Originally posted in Adhesives & Sealants Industry in December 2025