TRIMEDX Senior Vice President of Supply Chain and Shared Services Kelley Jacobsen was recently featured in Orthopedic Design & Technology, where she discussed how global challenges—such as tariffs, political instability, and conflict—are shaping the MedTech industry. In the interview, Jacobsen highlighted how TRIMEDX navigates uncertainty by diversifying suppliers, leveraging scale, and staying focused on a long-term, data-driven strategy.
Geopolitical risks such as political instability, trade wars, and tariffs, and regulatory differences across regions often disrupt global supply chains and drive up manufacturing costs, upsetting global trade. The orthopedic device industry is increasingly affected by these and other geopolitical pressures, especially the fluctuating tariffs proposed/enacted by the Trump administration.
For example, higher tariffs on imported metals such as steel and aluminum increase production costs for orthopedic device manufacturers. Material shortages can also impact supply chains, forecasting and purchasing, production, and logistics. Such large-scale disruption often leads to increased costs and delayed delivery times, affecting both manufacturers and healthcare providers. In addition, shortages can create huge fluctuations in supply and demand because they stimulate overstocking by orthopedic OEMs and their contract manufacturers (CMs), making delays longer.
“Although companies have become more resilient when faced with evolving economic conditions in recent years, resilience alone is not enough to overcome the geopolitical challenges that suppliers face,” said Lisa Anderson, president of LMA Consulting Group, a Claremont, Calif.-based supply chain consulting firm.1
Major geopolitical issues impacting the medical device industry today include:
- The Israel-Hamas war “is sabotaging trade routes in the Red Sea and wreaking havoc on container ship traffic in the Suez Canal,” Anderson said. To avoid capture, container ships are being diverted around the southern tip of Africa, which adds about 10 days to an outgoing trip from Asia to Europe.
- Extreme drought in Panama has reduced shipping in the Panama Canal, creating congestion and delays.
- China’s military stance against Taiwan, which threatens lawful commerce in the South China Sea, including deliveries of computer chips to the United States and other countries.
- Russia-Ukraine War—This three-year conflict has caused supply-and-demand uncertainties regarding critical raw materials utilized in medical device production. Economic sanctions against Russia have also forced Europe to find new energy suppliers.
- The U.S. has restricted the incoming supply of Russia-produced metals such as platinum, titanium, and nickel, disrupting automobile, electronics, and medical device production.
Uncertainty thrives
Ongoing trade tensions, regional conflicts, and regulatory differences across markets increasingly impact medical device manufacturing. “For instance,” said John Phillips, president of Phillips Precision Medicraft Implants and Instrumentation Division, an Elmwood Park, N.J-based manufacturer of advanced orthopedic implants, instrumentation, sterilization delivery systems, and cases and trays, “U.S.-China trade policies create uncertainty regarding tariffs and export controls, which can impact the cost and availability of critical components. Additionally, the war in Ukraine and the resulting sanctions have disrupted global supply chains for essential raw materials like titanium, which is vital for orthopedic implants.”
The availability of U.S. raw materials may also come under pressure. In addition, varying regulatory standards—such as the EU’s Medical Device Regulation (MDR) and differing U.S. FDA requirements—complicate manufacturing and distribution for companies operating on a global scale.
The majority of medical device/orthopedic manufacturers still rely heavily on globalized supply chains and are vulnerable to geopolitical disruption. PlanetTogether, a San Diego, Calif.-based provider of advanced planning and scheduling software for a variety of industries, including medical devices and life sciences, stated that “these geopolitical events can disrupt this interconnected system in significant ways,”2 including:
- Trade restrictions—Tariffs and export controls can limit access to critical materials, increasing costs and extending lead times
- Regulatory divergence—Varying regional regulations can complicate compliance and product certification
- Conflict zones—Political instability in certain regions can cause delays in production and shipping, and even destroy critical transportation infrastructure
- Economic sanctions—Sanctions against certain countries may cut off key suppliers
- Currency fluctuations—Rapid changes in exchange rates can impact the cost of imported goods
Geopolitical turmoil can happen quickly. “These frequently changing policies have introduced cost volatility and uncertainty into the procurement of essential medical device components,” said Kelley Jacobsen, senior vice president of supply chain and shared services for Indianapolis, Ind.-based TRIMEDX, a clinical assets management company. These risks are not always foreseeable, which can make it difficult to maintain steady production output and meet quality standards.
Maintaining the supply chain
As the COVID-19 pandemic showed, supply chains are extremely vulnerable to global events. Orthopedic manufacturers realized they had to diversify their supply chains in response to increased demand and declining revenue. “Through diversification, manufacturers reduce reliance on a single source or location and increase the supply base, enabling companies to better adapt to disruptions, improve sales performance, provide flexibility, and enhance supply chain resilience,” stated Ruby A. Nze-Ekpebie,3 an affiliate with the Raymond A. Mason School of Business at the College of William and Mary and author of “Global Supply Chain Effects on Medical Devices.”
The impacts of these geopolitical issues are both financial and operational. Tariffs increase the cost of imported goods, which in turn raises the overall cost of manufacturing medical devices. Supply chain disruptions can lead to delays in the availability of critical parts and equipment. “Manufacturers may be forced to switch suppliers or materials, which can introduce quality control issues and further delays,” said Jacobsen. “To safeguard health systems from these issues, TRIMEDX diversifies its suppliers, leverages scale, and uses technology and data to forecast trends and demand.”
These geopolitical challenges have led to increased costs, supply chain delays, and heightened risks for orthopedic OEMs. For example, “tariffs on Chinese imports have driven up costs for electronics used in advanced surgical tools, so we are seeing price increases from many outside suppliers,” said Phillips. “Regulatory discrepancies also force manufacturers to allocate significant resources to comply with multiple standards, slowing down time to market. The disruptions that impacted the orthopedic market through over-purchasing in 2023 have been followed by a slow return to normalcy in 2024-25 as OEMs continue to work to balance inventory levels with unpredictable supply chains.”
The supply chain is always dynamic, always shifting. The need for continuity of supply remains critical to manage production timing and to meet shipping dates, while still being mindful of cash flow and inventory levels.
“It is always a balance that is mitigated when you have suppliers who act and are treated like partners,” said Jim Schultz, vice president of sales and marketing for ECA Medical, a Thousand Oaks, Calif.-based designer, developer, and manufacturer of single-use instrumentation and surgery-ready procedural kits. “As in other industries, tariff instability has negatively impacted the orthopedic market. Given the unknowns in potential cost swings, how to resolve this instability both short-term and long-term is a formidable challenge.”
Many orthopedic implant, instrument, and component manufacturers are shifting production to their U.S. supplier base when possible, manufacturing in-house or shifting to alternative sites with lower tariff penalties. “This can be time-consuming and expensive in the short run, given the regulatory requirements and customer approval processes,” said Schultz.
Mitigation through collaboration
Medical device manufacturers (MDMs) take proactive measures to address challenges in the global supply chain and maintain a consistent supply of their products. They adopt various strategies, “including diversifying the supplier base, localizing manufacturing, fostering strong supplier relationships, enhancing supply chain visibility, developing contingency plans, and collaborating with regulatory authorities,” said Nze-Ekpebie.
The best way to lessen the impact of geopolitical issues or other supply chain disruptions is to take a proactive and strategic approach, advised Jacobsen. This includes developing comprehensive risk mitigation plans that account for various disruption scenarios before they happen.
“Accurate and real-time inventory management is also crucial, so organizations can make data-based procurement decisions rather than reactionary ones,” she continued.
Another important practice is regularly assessing supplier risk and diversification potential. Centralized oversight of the supply chain allows for more coordinated and efficient responses to emerging issues. These measures also help healthcare organizations maintain operational stability, even in the face of global uncertainty.
TRIMEDX collaborates with health systems across the country to plan for and mitigate the cost of tariffs or other supply chain disruptions. One of its core policies is maintaining a diversified supplier base to avoid over-reliance on any single region or vendor. This approach helps lessen the risk of any disruptions. “We have also formed long-term partnerships with trusted suppliers, which can help secure priority access to essential components during times of scarcity,” said Jacobsen. “Additionally, we leverage our scale to negotiate better terms and ensure supply continuity. These strategies provide a buffer against the unpredictability of global supply chains.”
Phillips Precision Medicraft (PPM) navigates these challenges by forming strategic partnerships with OEMs to mitigate risks and enhance efficiency. For instance, PPM engages in early design for manufacturability (DFM) by working closely with OEMs to design products in a way that optimizes all aspects of the manufacturing process.
“We also offer, when applicable, a dock-to-stock service, which streamlines delivery directly to their production lines, reducing lead times and increasing their return on investment by minimizing inventory holding costs,” said Phillips. “We have also brought critical outside services—like heat treating and an upcoming clean line—in-house, allowing us to optimize our own supply chain, reduce dependency on external vendors, and maintain competitive pricing and quality standards, even amidst geopolitical disruptions.”
Shortening the supply chain
As global supply chains face more risk, forward-thinking orthopedic manufacturers are seeking alternate strategies and expanding their sources of supply. In addition to sourcing additional regional supply chain partners, MDMs are moving closer to home. According to Xometry’s 2023 Medical Industry Survey, MDMs are reshoring operations to strengthen their domestic supply chains. The survey revealed that about two-thirds of the medical device manufacturers surveyed were in the process of reshoring their operations over the next 12 months.4
Localized manufacturing is vital for diversifying medical device supply chains. It establishes manufacturing facilities near end-users, reduces reliance on distant sources, and minimizes risks from global disruptions. “By establishing manufacturing facilities closer to customers, companies can reduce their dependence on distant suppliers, reducing the risk of disruptions,” said Nze-Ekpebie.
Using local supply chain partners enables a faster, more reliable, and more flexible supply of medical devices, ultimately resulting in a better patient experience. “In recent years,” said Nze-Ekpebie, “Europe has witnessed a growing trend towards localized manufacturing and supply of medical devices, including improved responsiveness to market demands and compliance with regional regulations.”
“In addition to improved supply chain resilience, reduced lead times, and quicker product design cycles, reshoring and nearshoring allow for greater process control and quality standards, as well as reduced costs,” said Anderson.
Elos Medtech, a Europe-based provider of specialized R&D, manufacturing, and supply chain solutions to the medical device industry, strives to have the right capabilities in the right regions, while ensuring all its operations maintain world-class standards.
“We continue to invest in regionalized production and build centers of excellence so we can remain competitive, manage costs, and offer a robust supply chain that aligns with our customers’ needs and strategies,” said Jodie Gilmore, chief marketing officer for Elos Medtech. “We’re seeing this approach resonate—it allows us to stay agile, respond to shifting demands, and be the kind of partner our customers can rely on long-term.”
Although dual or multiple sources are always a benefit, they can also be difficult to manage in the medical device industry, considering the volume levels and regulatory paths. Change can be costly and time-consuming. “Picking the right partners is critical and providing them rolling forecasts, placing purchase orders within needed lead times, and being as transparent as possible always pays off,” said Schultz. “Proactive and regular communication is key to mitigating risk.”
AI and geopolitical risk
Artificial intelligence (AI) can be a valuable tool for mitigating the impact of geopolitical risks.
“AI-powered predictive analytics can identify potential risks before they materialize,” said software developer PlanetTogether. “By analyzing data from diverse sources, such as news outlets, government announcements, and trade data, AI models can predict geopolitical disruptions and their potential impact on the supply chain.”
By integrating AI with their enterprise resource planning systems, MDMs can achieve end-to-end visibility of their supply chain. This allows AI to recommend alternative suppliers, reroute shipments, or adjust inventory levels in response to geopolitical events.
AI can also enable advanced scenario planning, which is crucial for managing geopolitical risks. By simulating various “what-if” scenarios, “AI can help operations directors understand the potential outcomes of different strategies,” said PlanetTogether. “AI-enhanced demand forecasting uses historical data and external variables to predict shifts in demand with greater accuracy.”
With integrated systems, different departments can collaborate more effectively. For example, a geopolitical risk identified by AI can trigger coordinated actions across departments, such as sourcing alternative suppliers and adjusting production schedules.
Taking action
Geopolitical issues rarely come with a clear timeline. It is a big decision, implementing a plan to mitigate the shifting impacts of geopolitical events and determining how many resources to invest.
“It is an ongoing balancing act,” said Gilmore. “We will never have perfect clarity, so we must remain flexible while keeping an active and open dialogue—both internally across our teams and externally with customers and suppliers—and monitoring leading indicators such as changes in trade policy, material price volatility, freight disruptions, and market demand signals. It’s not easy!”
“Our approach is built on maintaining a long-term vision, regardless of what’s happening in the geopolitical or economic landscape,” said Jacobsen. “By staying grounded in data and industry-specific insight, we’re able to continuously monitor trends, assess potential disruptions, and respond strategically.”
This level of preparedness, she added, allows them to make confident decisions and take proactive steps to protect clients from supply chain disruptions of all sorts—including shifting tariff policies, material shortages, labor strikes, or public health emergencies.
It is difficult to predict how long geopolitical issues will last. “All we can do is continue to monitor the situation and work closely with our OEM partners,” said Phillips.
Valuable media outlets such as AdvaMed often cover regulatory and supply chain challenges. The U.S. International Trade Commission provides updates on trade policies affecting medical device components. Additionally, “blogs such as MedTech Intelligence offer timely articles on industry trends, including how manufacturers are navigating global disruptions,” said Phillips. “And of course, Rodman Media’s Orthopedic Design & Technology and Medical Product Outsourcing are longstanding trusted sources.”
Informed decision-making
Elos Medtech takes a multi-source information approach to mitigate geopolitical risk. It starts with internal collaboration—across supply chain, commercial, and finance teams. Many of these insights come from real-time feedback from customers and suppliers. “That kind of frontline input is often the most actionable,” said Gilmore. “Other information sources include regulatory and trade associations and industry consultants or advisors who offer geopolitical analysis, such as Rothschild Global Advisory Group/Redburn.”
PPM gathers knowledge through a mix of industry engagement, news sources, and internal expertise. Attending events like OMTEC and the North American Spine Society (NASS) annual meeting is important for staying ahead of market trends and connecting with other leaders facing similar challenges. “While consultants can provide valuable perspectives, our team relies heavily on our direct experience working with OEMs, combined with our focus on analyzing our clients’ individual business and supplied forecasts,” said Phillips. “This gives us a unique understanding of how these geopolitical issues impact their operations and how we can help them adapt.”
Decision-making at TRIMEDX is guided by its deep industry expertise and a robust base of historical and real-time data collected across the wide range of healthcare systems it serves. This data helps to identify patterns, anticipate disruptions, and make informed, proactive choices. “Rather than relying solely on external consultants, we leverage our internal analytics capabilities and long-standing industry experience and relationships to assess risk and make strategic decisions,” said Jacobsen. “This data-driven approach enables us to evaluate the potential impact of geopolitical issues and implement effective mitigation strategies. This way we ensure our clients benefit from solutions that are forward-looking and resilient.”
Parting thoughts
“Medical technology companies must assess vulnerabilities in their supply chain nodes and prioritize critical suppliers, manufacturing plants, and distribution centers for enhanced supply chain resilience,” said Nze-Ekpebie. “This enables the development of effective mitigation plans for comprehensive resilience. Key actions include reviewing financial performance, addressing regulatory risks, managing reputation, strengthening organizational maturity, and addressing structural challenges such as trade tensions, climate change, and pandemics.”
By taking these actions, MDMs gain valuable insights into their operations and identify areas for improvement, ultimately enhancing supply chain resilience by being proactive, rather than reactive, when geopolitical unrest strikes.
“In today’s unpredictable geopolitical environment, how you use your global footprint is what really matters,” added Gilmore. “At Elos Medtech, two of our core strategic pillars—global operational excellence and customer-focused partnership—are more important than ever. We expect every site to meet the same high standards for quality, efficiency, and performance, so we can deliver reliably wherever our customers need us. Our focus and flexibility offer a strong position to respond quickly, reduce risk, and build lasting global partnerships that create optimal value for everyone, even during geopolitical challenges.”
By focusing on real, effective partnerships, manufacturers can help OEMs not only weather geopolitical storms but also emerge as stronger companies. “Our approach—offering tailored solutions like DFM and dock-to-stock services—has proven successful in helping orthopedic OEMs increase their return on investment, while navigating uncertainty,” said Phillips. “My best advice is to prioritize collaboration and adaptability. By working closely with trusted partners who understand your business, you can turn challenges into opportunities for growth and innovation in 2025 and beyond.”