Periods of uncertainty test the resolve of even the most well-oiled medical device supply chains. If even one part or component suddenly becomes obsolete or unavailable, medtech hardware companies struggle to replace that piece, retest the device, document the change, and (when needed) notify regulatory authorities. 

Supply chain disruptions can lead to hundreds of thousands of dollars and countless labor hours spent on redesign. Most critically, they can delay product launches and cause companies to miss market opportunities. McKinsey data shows that over a 10-year period, supply chain shocks could cost a medical device company 38% of a typical year’s earnings.

To reduce these risks, a growing number of medical device and component manufacturers are making a shift left. By shift left, we mean making procurement and supply chain decisions sooner in the development process. 

Under a shift-left model, engineering and procurement work together in the design phase, which speeds up product development and lowers the risk of unnecessary costs. With new cloud and streaming data technologies, engineers can check part and component status as they build prototypes, which accelerates the transition to clinical testing and commercial manufacturing.

“Medical device manufacturers face more pressure than ever to build devices faster, under stricter regulatory environments,” said Thomas Ruzika, head of product for Octopart, a search engine for electronic and industrial parts and subsidiary of Altium. “Supply chain and procurement teams need to think strategically now, so they will be prepared to stay in the race when demand picks up.”

As geopolitical and natural environments become more uncertain and volatile, a shift left brings much-needed predictability to unstable supply chains. Here, we discuss why and how to make the shift left.

Electronic component supply chain challenges threaten device quality

Medical devices that contain both hardware and embedded software may include hundreds of electronic components. Medical devices with the largest aggregate number of electronic components include:

• Imaging machines, such as MRIs, CT scanners, and Ultrasound systems

• Patient monitoring systems, both remote and in-hospital

• Implantable devices such as pacemakers and defibrillators

• Surgical robotic systems

• Radiotherapy devices

• Wearable devices, such as continuous glucose monitors and portable EKG machines

Medical device manufacturers should pay especially close attention to the following external supply chain disruptors, which can affect availability of electronics components.

Natural disasters. Tsunamis, hurricanes, and other climate events can shutter manufacturers, suppliers, and research sites worldwide, leading to prolonged production and delivery delays. Component scarcity may trigger price increases, while late deliveries can hurt a company’s brand reputation.

Geopolitical unrest. Global tensions and ongoing wars make supply chains weaker and less dependable. This type of uncertainty disrupts trade and, like natural disasters, can cause production delays and part price surges that erode margins.

Tariffs. In mid-2018, the Trump administration imposed a 25% tariff on $50 billion worth of goods imported from China, including electronic components like printed circuit boards (PCBs), semiconductors, and capacitors. The 2025 Trump administration is considering additional tariffs. Depending on what’s implemented and where, procurement managers may need to shop around for competitive pricing.

To offset some of these disruptions, many medical device companies have chosen to source closer to home. According to a 2023 survey from RRD, about two thirds of diagnostic companies surveyed are moving sourcing, manufacturing, and fulfillment closer to their customers and markets.

Electronic component supply chains are especially vulnerable to disruption due to availability and/or obsolescence that catch design engineers by surprise. “At some point in its lifecycle, an electronic component may produce a ‘not recommended for new design’ status,” said Ruzika. “That’s a sign that a part is about to become obsolete. When that happens, it may trigger an availability risk, or you may get less support from the component manufacturer. Mitigating obsolescence helps lower the risk of needing to replace that part down the line.”

Counterfeit parts also disrupt the supply chain; more importantly, they put patients at risk. In one example from March 2020, Interpol reported that authorities in 90 countries seized $14 million in counterfeit face masks, testing kits, medication, and other products. “When purchasers have tight deadlines, they may start buying parts from new sources that aren’t trusted, and then a counterfeit part gets into the product,” says Ruzika.

Adding more vetted, trusted distributors to an approved vendor list (AVL) will help medical device companies reduce risk of inadvertently ordering counterfeit parts and components. Taking time to evaluate and add parts to the AVL will help prevent rushed decisions in crunch times.

Taking a proactive approach helps sooth your supply chain heart rate

Gone are the days when electronics engineers could develop products without information on the status of key components. If one of those items becomes obsolete in 12 months, or if it won’t be available for nine months, medical device companies risk an expensive modification. 

Instead, shift left. Sophisticated supply chain technology can identify supply chain risk early in the design process and recommend alternatives to reduce that risk. For example, with BOM Portal, an application for the Altium 365 cloud platform, design teams can see component shortages, price fluctuations, and end-of-life issues long before they might disrupt production. They have time to choose suitable alternate parts. This information is crucial for implementing resilient design, an approach that involves designing for the unexpected.

BOM Portal connects to Octopart’s library of 679 distributors to assess part status for millions of electronic components. Advanced artificial intelligence capabilities and predictive analytics predict the risk of component obsolescence.

“Advanced analytics allow supply chain and procurement managers to be proactive about acquiring parts at the best price in the shortest amount of time,” said Ruzika. “Real-time information helps show today’s reality, but predictive features keep you one step ahead of your competitors.”

Plan ahead for an unpredictable 2025

Multiple analyst reports show an increase in medtech investment in 2025 compared to 2024. Pitchbook, a data provider for public and private equity, predicts “nominal” growth for 2025. 

This growth will put more pressure on supply chains. As medtech companies continue to destock surplus parts, gradually expand their AVLs, and negotiate high-volume contracts, they’re also expected to ramp up manufacturing. 

As that happens, manufacturers must plan for surprises like unavailable parts, pricing changes, and obsolescence. “Shifting left” with the right technology will give them the agility they need to keep the supply chain moving in uncertain times. 

To find out how Altium 365 with BOM Portal can help offset your most pressing supply chain challenges, schedule a quick demo.