Revisiting Relationships in Full-Service Outsourcing

Medical Product Outsourcing
Originally Published: April 29, 2025 
Author: Sean Fenske, Editor-in-Chief (MPO)

Given recent challenges, both OEMs and CMOs are reviewing their partnerships and adjusting as necessary to improve the arrangement.

The medical device industry is made up primarily of two groups: the OEMs, or medical device manufacturers (those whose names are on the actual products in hospitals and doctor’s offices), and the CMOs, or contract manufacturing organizations (those who support the OEMs through a variety of capabilities and services to enable the development and manufacture of the aforementioned medical devices). These relationships continue to evolve over their lifetimes, but perhaps never more so than in recent years.

A variety of factors have caused both parties in these relationships to evaluate not only their own strengths and weaknesses but those of their partner, as well. Challenges encountered during the COVID-19 pandemic, shortages and delays generated from logistics issues such as shipping disruptions (from port mishaps to other problems), and natural disasters have all revealed just how delicate many medical device materials and component supply chains are. Analyzing the relationship helps to create a clear picture of where improvements are needed, if new or additional suppliers may be required, and what best practices could be adopted elsewhere. Ideally, this type of assessment will only create a stronger, more effective bond between the two parties.

After speaking with representatives from 15 different medical device service providers, it’s clear many in the medical device supply chain have gained significant knowledge from challenges recently encountered. All of those included demonstrated a clear understanding of what’s taken place in recent years, what concerns remain, and what path they need to take to help clear the path forward. Ideally, some of their insights and perspectives offer a viewpoint that enables others to approach similar issues with a broader sense of the important factors to consider.

With this in mind, MPO spoke with the following leaders from MMT for this year’s outsourcing feature:

 

As well as the following respondents:

• Brian Boschetti, Vice President, OEM/International Sales & Marketing at B. Braun Medical Inc. 
• Brett Freeman, President of Providence Enterprise USA Inc.
• Brian Highley, CEO of Cirtec
• Chris Huntington, CEO of PrecisionX Group
• Doug Hutchison, CCO at Confluent Medical Technologies
• Trevor Kasprzak, Director, Medical Molding Segment at Saint-Gobain
• Keith Kiernan, Chief Commercial Officer at Freudenberg Medical
• Neil Muchin, Commercial Vice President of Sales, Medical OEM Market for TEAM Technologies
• David Novak, Vice President of Corporate Business Development for Cretex Companies
• Marie K. O’Malley, Chief Commercial Officer at PiSA USA
• Brian Semcer, President of MICRO
• Yash Siddhartha, President of Flexan, an Ingersoll Rand business
• Sean Stowik, Director of Sales and Marketing at AVNA
• Thomas F. Taylor, Founder & CEO of Foxx Life Sciences

Sean Fenske: From your perspective, what is the outsourcing situation in medtech? Growing, shrinking, or about the same?

Brian Boschetti: Outsourcing in medtech is unquestionably growing, driven by increased regulatory complexity globally, cost pressures, and the need for specialized expertise. The medtech and pharma industries are looking for partners who can provide not just manufacturing but also value-added services such as regulatory support, supply chain optimization, and product innovations tailored to their specific needs. At B. Braun OEM division, we see a shift toward strategic partnerships where suppliers play a critical role in the long-term success of the final product or franchise.

Brett Freeman: The outsourcing situation is growing and being driven by a need for faster new product introductions, cost management, flexibility, and strict regulatory compliance.

Omar Hall: In 2024, we observed outsourcing demand decrease as customers de-stocked current inventory. However, we expect to see growth in outsourcing in 2025.

Brian Highley: Medical device contract manufacturing continues to experience double-digit growth, driven by increasing demand for specialized expertise and cost efficiencies. This trend is particularly strong in emerging therapy areas such as neuromodulation and interventional therapies, which are seeing accelerated innovation. Additionally, as medical devices become more sophisticated, the industry is increasingly relying on contract manufacturers for critical aspects of the value chain, such as precision engineering, component integration, and regulatory compliance.

Chris Huntington: I expect outsourcing to outpace the medtech end market as suppliers gain scale and become specialized, offering advanced capabilities upon which OEMs increasingly rely.

Doug Hutchison: Outsourcing in medtech continues to grow as OEMs increasingly seek trusted partners who can provide unrivaled material science expertise, advanced manufacturing capabilities, and supply chain reliability. With the complexity of medical device development and the push for faster time-to-market, OEMs are looking to consolidate their contract manufacturers and turn to partners like Confluent for vertically integrated solutions that eliminate complexity, deliver efficiency, and mitigate risk.

Trevor Kasprzak: The outsourcing trend in medtech is expanding, particularly for critical components and materials. While multiple supply channels have always been common, there is now a stronger emphasis on further diversifying the supply base to reduce risk.

Neil Muchin: Operating across various markets and with a plethora of manufacturing capabilities, we see some experiencing growth while others remain fairly steady. Many large OEMs we partner with are increasingly exploring outsourcing and streamlining their supplier networks. TEAM’s advantage of having a multitude of manufacturing capabilities allows us to offer our customers and prospects the ability to be a single source versus needing to source products from a variety of companies. While cost is always a major factor that tends to lead some OEMs to engage in a make versus buy analysis, we are pleased to see a strong interest among our customers and prospects in outsourcing.

David Novak: In general the volume of outsourcing continues to grow in the market, but it really varies from customer to customer based on their needs and strategies. As the largest OEMs devote space to the new products they’re developing, it creates opportunities to win transfer business on their legacy products. And with OEMs of any size, where our capabilities and technology offer an advantage over our customers’ internal capabilities, we continue to see those opportunities get outsourced.

Marie K. O’Malley: OEMs are continuing to seek out trusted contract manufacturing partners. Rather than expanding their operational footprint, device companies are leveraging the capabilities and capacity available in experienced contract manufacturers. When done correctly, it is a win-win for both parties, and I expect the trend for increased outsourcing to continue.

Brian Semcer: Generally speaking, we see larger OEMs looking to outsource more new projects. They seem to be coming around to the idea that their true expertise relies on the earliest step of identifying user needs through their relationships with surgeons and hospitals, as well as in the ultimate step of marketing and distribution, which leaves room for all stages in between for full-service contract manufacturers.

Yash Siddhartha: Growing at a fairly high rate. There continues to be major moves by OEMs around localizing supply chains, reducing their operational footprints, and even investing in second-sourcing activities.

Thomas F. Taylor: Outsourcing is still very strategic to many medtech companies. We feel it is still growing at a slow rate. However, there is a clear initiative by many companies to derisk China outsourcing and look for higher quality and service levels.

Fenske: Did lessons learned/reactions from recent supply chain challenges have an effect on this direction/change? 

Freeman: There seems to be a need for some catch-up due to the supply chain constraints and project delays resulting from COVID-related supply chain disruptions. Long lead times resulting from material shortages and transportation delays created a backlog and a need to get to market faster.

Huntington: Recent supply chain challenges have reinforced the need for domestic manufacturing as well as dual sourcing to mitigate supply disruptions. Well-capitalized suppliers should stand to gain market share in this environment versus smaller players who cannot invest as deeply to ensure supply chain continuity.

Hutchison: Absolutely. The supply chain disruptions of recent years reinforced the importance of a secure sourcing strategy. OEMs are prioritizing contract manufacturers with reliable, scalable, and vertically integrated supply chains—such as Confluent’s nitinol supply chain, which delivers the fastest lead times in the industry. Companies are moving away from single-source dependencies and toward strategic partnerships that offer scalability and reliability.

Kasprzak: The recent supply chain challenges have highlighted the fragility of global supply networks. Many underestimated the complexity of key materials and components, as well as the potential for disruptions to impact multiple industries. This has accelerated efforts to diversify supply channels and mitigate risk.

Keith Kiernan: The recent supply chain disruptions have reinforced the need for more resilient manufacturing strategies in the medtech industry. One major trend we’re seeing is the localization of manufacturing—companies are looking to bring production closer to end markets to reduce dependency on long, complex supply chains that are vulnerable to geopolitical and logistical disruptions.

At Freudenberg Medical, we have built a global manufacturing footprint with 11 sites strategically located in key medtech hubs. This enables us to be where our customers need us, ensuring shorter lead times, greater flexibility, and supply chain security. Additionally, to address the growing nearshoring trend, we are expanding our operations in Costa Rica with a second facility. This allows us to offer reliable, high-quality manufacturing in a lower-cost location, providing our customers with a competitive advantage while maintaining the highest standards of quality and compliance.

Muchin: While supply chain issues have improved to some extent, they still pose challenges for many of our projects. TEAM collaborates closely with customers to pinpoint items with long lead times and proactively stocks inventory to prevent production delays. To mitigate risks, TEAM Technologies has established agreements with customers that outline responsibility for materials in the event of forecast or purchasing adjustments. Our customers value this partnership, knowing they can rely on us to help them consistently meet market demand.

While having multiple sources of raw materials is always the best approach, the most recent tariff discussions have heightened this need. This enables companies like ours to shift demand from suppliers in tariff-impacted countries to others with the goal of avoiding additional costs or delays. We work diligently with our customers to achieve this on, at a minimum, the critical materials.

Novak: To some extent, we see OEMs implementing dual-source strategies with their supply base as well as their own internal operations. The main reaction is a focus on capacity analysis and truly understanding any potential constraints with the supply base.

O’Malley: With so many recent challenges, companies continue to be tested on their supply chain resiliency and business continuity. Working with external partners who have a robust plan including backup operations, multiple sources of supply, and validated alternative sterilization chambers will provide additional assurances to be positioned to weather any storm.

Many companies have been negatively impacted by factors including COVID-19, tariffs, and unpredictable and costly logistics and are considering nearshoring options targeting supplier partners in North America. Centerpiece is well-positioned to support customers with its contract manufacturing and EtO sterilization services within 30 minutes of San Diego.

Semcer: We believe OEMs have found value in a shorter supply chain as well as in bringing as much of the supply chain as possible under one roof. As a full-service CMO takes on more and more responsibility in terms of components or processes related to a given project or device, the OEM realizes shorter lead times and greater control, which results in reduced risk.

Siddhartha: Yes, there is certainly a push for supply chains to be more local, flexible, and responsive. Generally, that lends itself to outsourcing since more risk transfers to supply chain partners than just the OEM.

Fenske: Has your relationship with your suppliers changed as a direct result of the challenges encountered in recent years? If so, how?

Boschetti: Yes, our supplier relationships have become more collaborative and forward-thinking. The global supply chain disruptions underscored the importance of transparency and proactive risk management. We now engage suppliers earlier in the planning process, conduct more rigorous risk assessments, and invest in digital tools to improve visibility and agility. Long-term partnerships have replaced transactional relationships, ensuring greater resilience in an increasingly complex global market. In addition, a global manufacturing footprint enables more agile supply chains if there is the ability to utilize more regional manufacturing where the capabilities are still a fit.

Freeman: The geopolitical climate over the past few years has incentivized our business to manufacture closer to the markets our customers serve. In turn, this has driven us to encourage our suppliers to also move closer to those same markets and build on our existing supplier partnerships, as well as develop new supplier partnerships.

Huntington: Yes, we’re prioritizing deeper, more strategic partnerships with raw material suppliers to improve visibility and strengthen supply chain resilience.

Hutchison: Yes. Our partnerships with suppliers have become more strategic and long-term focused. Rather than transactional relationships, we work closely with key suppliers to secure material availability, improve forecasting, and optimize production schedules. This is particularly evident in our investment in nitinol supply chain infrastructure, ensuring scalability and reliability for our customers.

Kasprzak: Communication with suppliers has intensified due to the need to schedule and expedite material deliveries. This increased communication is crucial for our customers and the timely shipping of finished goods.

Muchin: One key takeaway has been the importance of maintaining regular communication with our customers for demand planning, as well as collaborating closely with our supply chain to improve forecasting. By continuously engaging with our customers to assess demand, we ensure alignment and remain well-positioned to meet their market needs. We also work tirelessly with our suppliers on supply agreements or vendor-managed inventory programs, which help reduce lead times and help with continuity of supply.

Novak: We work closely with our suppliers to minimize lead times and mitigate the risk of supply issues. That includes focusing on safety stock and specific stocking agreements to ensure we have the material either on hand or in place at our suppliers’ facilities.

O’Malley: Definitely. We value the role of being a trusted supply partner, capable of supporting our valued customers. I have seen relationships between customers and suppliers revert to a transactional level with unrealistic expectations on cost-down targets. Relationships built on mutual trust and respect focused on driving value for both parties will result in stronger, longer-term business arrangements.

Semcer: In some instances, we were given the approval to dual-source or provide alternative-source raw materials to minimize risk, working with both customer and supplier to correlate MOQs, pricing, and production for optimum yield. At MICRO, communication and transparency define and fortify our relationships with our suppliers and customers.

Siddhartha: Yes. It’s definitely more proactive and incorporates risk to a higher degree.

Sean Stowik: It really has. What became very clear was that we needed to solidify our supply chain and truly develop reliable partnerships and strategies that allow for added flexibility during turbulent times. This applies to both global market conditions as well as specific customer challenges and inventory management strategies.

Taylor: Many suppliers have been purchased by private equity and/or rolled up into larger companies. Overall, this has affected service and quality levels. Foxx is very unique as we are an OEM and supplier. So, we focus on service and the concept of treating others the way you would want to be treated.

Fenske: On the other hand, has your relationship with customers/OEMs changed in recent years? If so, how?

Boschetti: Absolutely! Customers are looking for more than just suppliers; they want strategic partners who understand their business and can drive innovation. At B. Braun, we work closely with our customers to develop customized solutions, integrating our expertise in medical technology with their specific needs. Supply chain security, regulatory alignment, and sustainability are now major priorities in these discussions. Our relationships have deepened as we collaborate earlier in the product development cycle to create more efficient, scalable, and compliant solutions. More than ever, our customers are seeking long-term partnerships where we can jointly navigate industry challenges and innovate together.

Freeman: OEMs are looking for better, faster, and more sustainable ways to serve their customers. As part of this shift, we are working in coordination with our OEM customers. We are a Hong Kong-headquartered company. Our first factory was established in Haiphong, Vietnam, in 2020, and then our first North American factory was set up in Tijuana, Mexico, in 2023. Manufacturing closer to the markets served by our OEM customers has strengthened our partnerships with those customers.

Hall: Customers are taking longer to source projects, extending the overall sourcing process by weeks as they review each purchase/project carefully.

Highley: As medical devices become more advanced and complex, OEMs are increasingly turning to us for specialized expertise, full product design, and high-precision manufacturing. In response, Cirtec has been expanding its capabilities, streamlining processes to accelerate time to market, and drive cost efficiencies. Additionally, companies are leveraging existing technologies while expanding into new therapeutic areas, and we work closely with them to foster innovation. Our focus remains on strengthening core technical expertise and delivering tailored, strategic solutions that align with industry advancements.

Huntington: In challenging market conditions, suppliers have the greatest opportunity to strengthen their OEM relationships through deeper collaboration. By maintaining continuity of supply during challenging markets, you can build greater trust and position yourself as a reliable, strategic partner.

Hutchison: Yes. OEMs are now more focused on risk mitigation and supply chain transparency. Many are looking for contract manufacturers that can act as true partners in bringing medical devices to market. We’ve seen increased collaboration with customers in the early-stage development phase, where customers want to prototype and iterate with a partner that can offer an extensive portfolio of solutions. At Confluent, our portfolio breadth includes polymer tubing, balloon and complex catheters, and biomedical textiles along with our expertise in nitinol applications. Our unrivaled materials science expertise coupled with a scalable and reliable vertically integrated supply chain give customers peace of mind.

Kiernan: Our relationship with customers has evolved significantly in recent years. We see a clear shift toward outsourcing to vertically integrated partners as medtech OEMs look to simplify their supply chains and reduce complexity. Instead of working with multiple suppliers, they want to consolidate more capabilities under one strategic partner who can support them across the entire product lifecycle.

At Freudenberg Medical, we have successfully grown up the value chain and across the full product lifecycle—from ideation and prototyping design all the way downstream to supply chain and logistics. This means we can offer a comprehensive suite of capabilities and services, including design, development, DFM/DFA, full-scale manufacturing, regulatory support for market launch, and secondary operations like sterilization, packaging, and supply chain services. By bundling these capabilities, we help our customers accelerate time to market, optimize costs, and ensure seamless quality management throughout the process.

Muchin: Communication methods evolved over the past few years, with a significant shift toward virtual meetings due to travel restrictions. This demonstrated that businesses can successfully operate without in-person interactions. However, we still see great value in face-to-face meetings with both customers and internal teams, which have resumed. That said, the industry continues to take a strategic approach, carefully prioritizing in-person engagements to ensure time is well spent.

Novak: Yes. We’ve focused on taking relationships with our customers to the next level. It’s about genuinely working together so we’re both focused on each other’s business. That allows us to act more strategically, reduce surprises, and be more successful together.

O’Malley: Having worked at Medtronic for more than 27 years and primarily serving in the customer role, I appreciate what customers expect and value. I, along with my colleagues, work hard to be responsive, meet our commitments, and deliver results to ensure our company is the supplier of choice.

Semcer: Some OEMs have begun to realize that by allowing us into their design process at the earliest stages and sharing their challenges with us, we may be able to help them solve their problems through our expertise in design for manufacturability. While we do not perform seminal design work here, we do have 80 years of high-volume manufacturing experience that we can bring to their projects. Our track record and expertise yield trust that empowers our customers—they feel confident bringing us into their projects as early as possible.

Siddhartha: I would say customers are more willing to have a strategic conversation around risk management and spend more time with us on planning for supply continuity.

Stowik: AVNA’s relationship experiences with customers has changed for many reasons. The total cost of doing business will always be a key consideration, but the focus has been on a greater level of transparency and risk mitigation on specific applications and technologies. By having a clearer view our customers’ innovation pipelines, we’ve jointly developed strategies to bring more processes in-house, expand in areas of expertise, and offer unique agreements around redundant capabilities, added capacity, and reduced supply chain risk through our U.S. locations and our newly expanded Costa Rica operation.

Taylor: We feel service and quality levels have dropped with M&A activity over the past five years. In addition, investment in people and having the appropriate level of resources for new projects has also dropped. We are hoping these issues will improve over the next few years.

Fenske: Is M&A activity within the industry having an effect on the OEM/CMO relationship? If so, what is the impact?

Freeman: Yes, and there are advantages as well as disadvantages. Advantages include becoming an approved supplier of the acquiring or merged company if not one already; having access to new projects, markets, etc.; and potentially establishing a new OEM partner or strengthening an existing partnership. Disadvantages include the acquired or merged OEM customer losing its key personnel, starting new with a potentially unknown OEM customer, and being potentially considered a redundant supplier partner.

Huntington: Increased M&A activity by OEMs is driving the need for more strategic, enterprise-level relationships. As OEMs consolidate, aligning with their evolving priorities and building deeper partnerships across the organization becomes essential to remain a valued manufacturing partner.

Hutchison: From a Confluent perspective, we have seen no impact. Our M&A activity dates back to prior to COVID and has always been focused on ensuring a scalable and reliable supply chain for our OEM partners and patients for decades to come. Confluent is fortunate to be supplying critical components for a number of the OEMs’ growth products, our new business pipeline opportunities are growing, and our lead times are the fastest in the industry due to our vertically integrated supply chain.

Muchin: Mergers and acquisitions remain common in the medical device manufacturing sector. As OEMs and CMOs consolidate, the focus has shifted toward creating greater value, aligning with OEMs’ goals to streamline their supplier base and work with more adaptable, preferred partners. However, OEMs also expect CMOs to fully integrate and standardize their systems, ensuring consistency across all TEAM Technologies locations as they collaborate.

Novak: The increased volume of private equity transactions requires our customers to divert technical resources toward supplier change management rather than design and cost improvements. This situation creates a more favorable landscape for public/private CMOs with a history of longevity. As a company that’s been privately owned for over 100 years, Cretex can take a long-term perspective on business decisions, while also having the resources and management structure to be nimble and invest aggressively when strategic opportunities arise.

O’Malley: There continues to be a high level of M&A activity both at the OEM and supplier level. Companies continue to expand on the breadth and depth of their offerings.

Semcer: We are a privately held family business that grows organically. Because of that, we do not have the challenge of integrating numerous facilities with differing corporate cultures, ERP systems, and quality systems. Some OEMs have told us there is a certain level of comfort or reassurance that comes from knowing virtually all our operations are within one company with one culture. MICRO is seen as being very agile and responsive because we have been privately owned and family-operated for eight decades.

Siddhartha: I think it certainly does. As CMOs get acquired and become part of ownership groups with different time horizons, operating philosophies, or commercial outlooks, there can be major advantages that accrue to the customers or there can be major disruptions to the relationship. In our case, being acquired by Ingersoll Rand, we are able to have a longer-term outlook and an ability to invest in the business that our customers recognize as a major new advantage of working with us.

Stowik: What AVNA is experiencing right now is a mix of risk and opportunity. With the consolidation activity in recent years, customers are reducing their supply base and some competitors are getting much larger. There is the obvious consideration of potential long-term impact to our business. We’ve aligned our strategic growth planning with what we do best and remain focused on what has guided us for the last 100+ years. That is early customer engagement and engineer-to-engineer-driven solutions. We remain nimble and have the flexibility and speed of decision-making specific to human capital, capability, and capacity investments. As a privately held business, we’ve been able to carve out a niche with existing partners and identified strategic target accounts to grow where they need us most. This has been on both core technologies and expanding into new areas or competencies.

Taylor: Again, we feel private equity and M&A have hurt quality and service levels. Our goal is to work with as many family-owned suppliers as possible. We also feel bigger is not always better. Increased minimum order quantities and increased contract manufacturing margin requirements have hurt relationships with OEMs like Foxx and others.

Fenske: What recommendations do you have for OEMs currently seeking new CMO suppliers? How can they best evaluate a prospective partner and what traits should be considered most important? 

Boschetti: Customers should look beyond cost and assess a contract manufacturer’s or service provider’s technical capabilities, regulatory compliance history, and supply chain resilience. A strong partner will have robust quality systems, a track record of innovation, and the ability to scale with their needs. Cultural alignment is also critical—working with a manufacturing partner that shares the same commitment to patient safety and quality ensures long-term success. At B. Braun, we believe the best partnerships are built on transparency, collaboration, and a shared vision for continuous improvement. Companies should prioritize an external partner that proactively brings solutions to the table, whether through material advancements, manufacturing efficiencies, or risk mitigation strategies.

Freeman: Sometimes working with the biggest suppliers does not always serve the OEM best. There are times when OEMs are working with suppliers that have a larger market cap than the OEMs themselves. Working with niche suppliers, such as ourselves, can often provide additional benefits including greater attention to detail, personalized service, and a willingness to go above and beyond. It is still imperative to meet the service, cost, quality/regulatory, and delivery requirements, but there is an additional layer of value-add that makes a supplier, such as us, unique.

Hall: I recommend OEMs continue to seek partners capable of meeting the demands of business growth and they have robust systems in place to support quality, delivery, customer service, and more. I also recommend OEMs seek partners with the technical resources in place to work with them at every phase of their project.

Highley: When selecting a CMO, OEMs must carefully evaluate their market strategy, design capabilities, supply chain team strength, manufacturing footprint, and vertical capabilities. Partnering with a specialized CMO can significantly accelerate time to market by leveraging expertise in complex device design, manufacturing, and vertical integration.

As medical devices become increasingly sophisticated, having strong vertical capabilities and deep technical expertise is crucial for a CMO. OEMs should assess whether a prospective partner understands the core technologies shaping their industry, can drive innovation in emerging therapy areas, and fosters a highly collaborative approach. The most effective CMOs align seamlessly with the OEM’s vision, offering both technical proficiency and strategic insight to ensure successful product commercialization.

Huntington: OEMs should focus on identifying CMOs with true core competencies—not generalists, but best-in-class specialists in specific manufacturing processes. The most important trait to evaluate, in my view, is responsiveness. Strong communication and customer service are critical; interactions should be measured in minutes and hours, not days and weeks.

Hutchison: OEMs should prioritize CMOs with a proven track record of quality, regulatory expertise, and supply chain reliability. A vertically integrated supply chain—such as Confluent’s—ensures greater control over materials, lead times, scalability, and risk mitigation. Additionally, a strong partner should have technical depth, materials science expertise, and robust design-for-manufacturing support.

Kasprzak: To take a balanced approach, it’s essential to weigh total value alongside price. A strong CMO offers expertise in manufacturing similar products, robust quality and regulatory systems, global scalability, financial stability, and a commitment to sustainability. While company culture and collaboration are equally important, they are harder to assess. Visiting manufacturing sites is crucial to understanding the true capabilities and long-term value of a CMO.

Kiernan: Selecting the right CMO is a strategic decision that goes beyond cost and capacity. OEMs should look for a long-term partner with the right expertise, operational excellence, and financial stability.

A strong CMO should offer end-to-end capabilities—from design, prototyping, and DFM/DFA to manufacturing, regulatory support, packaging, and supply chain management—ensuring seamless coordination across the product lifecycle.

Quality and regulatory excellence are critical, with a proven track record in FDA, ISO 13485, and MDR compliance. Given recent disruptions, supply chain resilience and a global footprint are key, ensuring regional manufacturing and nearshoring flexibility. Clinical acumen is also becoming more important as OEMs seek partners who understand the complexities of medical applications and patient safety.

Muchin: The primary consideration when selecting a CMO should be their true capabilities. Many CMOs claim expertise they don’t actually possess, which is why we take an honest approach from the start—if a project isn’t the right fit, we communicate that early in the evaluation process. When there is a good match, it’s essential to assess not just manufacturing capabilities but also engineering, quality systems, and overall processes to ensure a strong partnership.

A key differentiator is the ability to scale production as a product gains market success—something many competitors struggle to demonstrate with a long-term roadmap. Additionally, OEMs should consider the value of working with a CMO that is already FDA-registered (or certified by a relevant regulatory body) and has a well-established quality management system with a proven track record in the medical device industry.

Novak: OEMs should look for stability, breadth of capabilities, innovative problem-solving, and the ability to scale. The best way to evaluate a partner is to visit and kick the tires. You need to see how they are performing and executing within their current operations. It’s also crucial to spend time with the CMO’s engineers. What’s the strength of their overall team? Where are the innovations coming from? When the unexpected happens, how will they respond?

O’Malley: Consider what differentiates the CMO during the due diligence process. It is imperative to investigate the potential new supplier’s track record, customer base, and operations. Customers should arrange to meet the key leaders and team members of any prospective CMO and plan an on-site visit. Meeting the team—including executive management, operations, and quality—along with an operations tour will reveal substantial information and help in deciding who will be the right supplier partner for your company.

Semcer: By making an effort to understand a potential partner’s total value, we believe you can put a number to everything, including evaluating a CMO supplier’s total supply chain cost analysis to include procurement cost, cost of quality, production, transportation, warehousing, delivery, etc. MICRO customers value seeing our facilities and meeting our teams. It jumpstarts communication, collaboration, and innovation. It’s very common for our customers to walk the production floor and have conversations with our personnel—in fact, we encourage it.

Taylor: In our opinion, we focus on high service and quality levels. We want CMOs to act like a partner. When I started working with MPO in 2003, CMO service levels were at an all-time high. With all the M&A, private equity, and short-term thinking, this has hurt outsourcing. On the positive side, with a downturn, I feel service levels will increase among CMOs.

Fenske: What steps must an OEM take in order to evolve from dealing with a CMO purely as a supplier to establishing a true collaborative partnership with that CMO?

Boschetti: Medtech and pharma companies should engage external manufacturing partners early in product development and treat them as an extension of their own team. Joint risk assessments, shared key performance indicators (KPIs), and long-term agreements foster collaboration. Investing in open communication, digital integration, and continuous improvement initiatives also strengthens the partnership. In the best cases, CMOs don’t just manufacture a product—they actively contribute to innovation, regulatory strategy, and market success.

Freeman: When the occasion permits, early engagement is always encouraged. OEMs should be transparent with the CMO regarding the challenges and opportunities of the project. This involves establishing communication channels between the respective product development teams from the OEM and the tech transfer team from the CMO. Ongoing business reviews and engagement between different levels of the organizations enable aligned expectations and execution.

Highley: Shifting from a transactional supplier relationship to a true collaborative partnership with a CMO requires a fundamental mindset shift. OEMs should consider involving the CMO in the full product lifecycle management and commercialization process, considering not just a component or single iteration of a device but its entire lifecycle. This includes strategic planning, design, manufacturing, cost control, and post-market surveillance. These considerations ensure insights from each phase inform future iterations and even entirely new versions of the device. By integrating the CMO into long-term product roadmaps, OEMs can leverage their expertise to drive innovation, enhance efficiency, and create sustainable partnerships.

Huntington: To build a true collaborative partnership, OEMs must provide a consistent and reliable demand signal. Large, unplanned demand swings—such as ±20%—can disrupt operations and erode trust, making long-term success difficult to achieve. Predictability is key to strong, strategic alignment.

Hutchison: Open proactive communication, early engagement in the design phase, and long-term commitment are key. When OEMs involve their CMO early in product development, they can leverage manufacturing expertise to eliminate complexity, design for efficiency, scalability, and reliability.

Muchin: While OEM/CMO relationships are fundamentally customer/vendor arrangements, those built on a true partnership tend to be the most successful, as both parties share in the benefits of product growth. A strong foundation of trust with your CMO is essential for effective collaboration, and that starts with honesty.

Novak: While it’s important at all levels of the organization, establishing a collaborative partnership with the CMO’s leadership is vital. It’s paramount for the organization’s strategies to align so you can support each other’s goals.

O’Malley: Consider a CMO an extension of your own operations—establish regular dialogue, quarterly business reviews, and in-person meetings to strengthen the relationship.

Semcer: Early involvement in a project is critical. By allowing the CMO to bring in their particular expertise at the initiation of a project, align on project goals, and review timelines to set expectations, it will typically be more successful overall for everyone.

Siddhartha: This is an industry with a long-term outlook and long memories. It’s incredibly important to act consistently and fairly at all times. This basis of trust is critical to ensure a long-term relationship.

OEMs have to build a long-term relationship with the supplier where it’s clear there is mutual benefit. If a relationship feels increasingly one-sided, it can be difficult to break out of that cycle. How can an OEM bring key suppliers along as product roadmaps change, priorities shift, and strategies change? The OEMs best at this are managing those conversations well in advance of needing something from their partners and continuing to nurture the ecosystem and capabilities of their suppliers.

Taylor: Communication is key. In my opinion, after 40 years in the business, weekly calls and quarterly visits to your CMO is the best way to have a solid relationship built between the two parties.

Fenske: Conversely, what does a CMO need to do to illustrate to an OEM it is capable of being a collaborative partner in a medical device project?

Freeman: We always encourage our OEM partners to be transparent about their pain points. Once those pain points are communicated and understood, it is incumbent on the CMO to address those pain points and tailor its value-added services to be able to serve those needs.

Hall: CMOs should demonstrate they have engineering and technical resources capable of working with the OEMs to deliver a successful end result. Collaboration is key.

Highley: To transition from a transactional supplier relationship to a collaborative partnership, a CMO must proactively demonstrate its commitment to the OEM’s long-term success. This involves engaging deeply in the product lifecycle management and commercialization process, offering strategic insights into design optimization, cost management, and technical expertise. Furthermore, by demonstrating a thorough understanding of the OEM’s market strategy and product roadmap, the CMO can provide innovative solutions that align with the OEM’s objectives. In addition, fostering open communication and cultivating a culture of transparency are key to building trust and ensuring collaboration, ultimately positioning the CMO as a valuable partner invested in the product’s success throughout its lifecycle.

Huntington: A CMO demonstrates its ability to be a true collaborative partner by consistently delivering on quality, on-time delivery, and responsiveness—while also maintaining financial stability.

Hutchison: A CMO must demonstrate technical expertise, a track record of navigating changing regulatory landscapes, and a commitment to transparency. Confluent achieves this through our vertically integrated model, deep materials science knowledge, and ability to provide end-to-end solutions—from raw material sourcing to finished device manufacturing. We are a partner that powers possibility.

Kasprzak: To be true collaborators, CMOs need to drive innovation and offer solutions that help OEMs address medtech challenges, such as simplifying designs to ensure long-term quality and improved patient outcomes.

Kiernan: A strong CMO must be able to scale efficiently, leveraging automation, digital traceability, and Lean principles to drive efficiency and innovation. Just as important is strategic and cultural alignment, ensuring transparency, collaboration, and a shared vision for success. Long-term financial stability is essential for ensuring reliability and continued investment in technology and capabilities.

Ultimately, the best CMO is not just a supplier but a true strategic partner—one that delivers expertise, resilience, and long-term value.

Muchin: Honesty and trust are essential for building a strong collaboration. As a specialty solutions provider, we focus on working closely with customers and prospects to explore alternative materials, optimize designs for manufacturing, and provide strategic insights. This proactive approach is key to fostering long-term relationships and demonstrating our value from the start.

Semcer: Showcasing a great quality system and track record, plus an ability to scale a project combined with clear communication throughout the process, will convey confidence in a successful project to an OEM and keep both parties aligned. MICRO’s history is one of relationship building—we build trust one project at a time, enabling us to deepen customer relationships and help them improve health worldwide.

Siddhartha: Will say this again and think it applies even more heavily: This is a industry with a long-term outlook and long memories. It’s incredibly important to act consistently and fairly at all times. This basis of trust is critical to ensure a long-term relationship.

Beyond that, it’s also critical to continue to evolve your capability set. OEMs increasingly look to us CMOs to bring innovation to the table, and to bring it quickly. The ability to solve problems for our customers and to push the boundaries of technology can enable CMOs to take that next step with customer relationships.

Taylor: CMOs need quality systems including ISO 13485 and proper resources to support a program from start to finish.

Fenske: Has just-in-time (JIT) inventory management practices returned or is there still an interest in a just-in-case (JIC) strategy?

Freeman: In an inflationary environment and with the need to manage inventory costs, there is the healthy and unhealthy tension of inventory management. OEMs are often interested in their CMO suppliers carrying inventory in order to support the just-in-case scenarios, but it is often a point of how the related costs will be covered. Various factors go into the decision-making process, including material lead times, transportation time, length of supply chain, etc. It is for this reason improving efficiency has continued to be a focus with the goal of reducing the number of suppliers and streamlining the supply chain in general. There will continue to be the balancing act of just-in-time versus just-in-case and it will depend on the OEM and the markets they serve.

Hutchison: While just-in-time practices remain relevant, many OEMs have shifted to a hybrid approach, balancing efficiency with strategic inventory reserves. Confluent’s vertically integrated supply chain allows us to offer secure sourcing options that mitigate risk without overburdening customers with excess inventory.

Muchin: While just-in-time inventory management is gradually making a comeback, many manufacturers are still maintaining elements of a just-in-case strategy. The supply chain disruptions of recent years highlighted the risks of relying solely on lean inventories, leading companies to strike a balance between efficiency and resilience.

At our company, we’ve seen a more strategic approach emerge—JIT where it makes sense for predictable demand and stable supply chains, but JIC for critical components, long lead-time items, or high-risk suppliers. Customers continue to value flexibility and supply chain security, so we remain committed to a hybrid approach that ensures both cost-effectiveness and reliability.

Novak: A return to just-in-time inventory management practices is getting closer, but for now, there is still plenty of safety stock in the system to avoid future supply chain impacts.

O’Malley: There has been far less focus on JIT and more expectations around business continuity and supply chain resiliency. While inventory and cash flow remain key priorities, the assurance of supply and being positioned to serve patients are more important. It is a balancing act with the scale tipping toward “just-in-case” in today’s uncertain environment.

Semcer: We have not seen a return to just-in-time management but have witnessed more of a movement to make-to-order vs. make-to-stock throughout our supply chain. In addition, “buffer” stocks are more limited due to volatility in some customer requirements.

Siddhartha: Certainly, there has been a strong reversion to the mean as interest rates have risen and expectations around cash management are back to normal. If anything, OEMs increasingly value suppliers that are willing to serve as inventory management partners.

Taylor: JIT is trending back to normal. Clearly, the last several years were unique and supply chains were a mess. However, we see most companies are back to normal when it comes to inventory management and operations.

Fenske: Have OEMs approached you about offering or increasing warehousing or logistics services?

Freeman: Yes. They have approached us for these services, and it is part of our decision to manufacture closer to the markets our OEM customers serve. Local manufacturing services can include warehousing and/or logistics services.

Jesse Metcalf: We are observing a growing interest from customers seeking greater guaranteed inventory availability. To address this need, we offer an Inventory Kanban program that allows us to hold dedicated inventory for customers in our warehouses. This way, when customers require products, we can quickly ship from their designated bins. As our customers have addressed their destocking needs, we continue to receive inquiries about this program, especially as they transition back to a just-in-time methodology.

Muchin: For years—long before the pandemic—we have provided our customers with purchasing flexibility through supply agreements and blanket purchase orders. This enables us to secure raw materials well ahead of their requested dates and, in some cases, build finished goods inventory. By taking this approach, we can align production with our own scheduling rather than relying solely on demand, optimizing manufacturing efficiency. Our customers have greatly appreciated this strategy.

Novak: We have not been approached regarding additional warehousing, but we have increased our flexibility related to managing their inventories

O’Malley: Definitely! Customers are seeking suppliers who offer complete services so they can focus their resources and efforts on their core competencies and streamline their supply chains.

Semcer: We do have consignment arrangements with several of our largest customers.

Taylor: Yes, and we support these activities today. While we don’t advertise this, we still support OEMs when requested.

Fenske: Have you been impacted or participated in the nearshoring/reshoring trend? Have OEM customers inquired about you moving to/opening a facility closer to them?

Freeman: In 2023, we set up a manufacturing facility in Tijuana, Mexico, that can support tooling, injection molding, electronics, assembly, and packaging. The decision to set up this factory was due to requests from our OEM customers as well as part of our goal to shorten the supply chain. Having a factory in North America enables us to manufacture our OEM customers’ products and have those products available closer to the main markets of their customers.

Huntington: Reshoring is an increasing trend with specialized domestic manufacturers more capable of competing with OUS fully landed costs. Separate and apart from tariffs, best-in-class suppliers can absolutely compete toe-to-toe with OUS suppliers if fully landed costs are accurately considered.

Hutchison: Some OEMs have discussed using local suppliers, but at this time, it is not a critical factor in an OEM decision on selecting a CDMO. Confluent has the benefit of having a majority of our supply chain domestically located, so we are already “nearshore.” Our strategy has always been in the spirit of true partnership. Our facilities are where our customers are located.

Kasprzak: We are receiving requests from customers to localize the manufacturing of components for their device assemblies. This approach reduces shipping costs, lead times, and economic risks.

Kiernan: We are actively expanding our global footprint to align with the nearshoring and reshoring trends in the medtech industry. Many of our OEM customers are looking for manufacturing partners that can provide regional supply chain security, reduce lead times, and optimize costs.

To support this demand, we are opening a second manufacturing facility in Costa Rica, which will become operational in early summer. This expansion enhances our ability to provide high-quality, cost-effective manufacturing in a key medtech hub, addressing the growing need for nearshoring in the Americas. Additionally, we are strengthening our coatings capabilities with a second 130,000-sq.-ft. manufacturing plant in Germany.

Muchin: Many OEMs are re-evaluating manufacturing in Asia due to the logistical challenges experienced during the pandemic and, more recently, tariffs. Many are now seeking nearshore production closer to their target markets. As a result, our Reynosa, Mexico, facility has been recognized by numerous customers and prospects as an ideal location for products destined for North America. Similarly, one of our customers is establishing its own manufacturing operations in Asia, making our Singapore converting site a seamless solution for transferring production from one of our U.S. locations.

Novak: We have seen dynamic opportunities in the global market, which is why we are in the process of bringing operations online at our new production facility in Costa Rica. Supporting our customers in that region will fuel our strategic growth goals.

O’Malley: We have our operations in Mexico. Our customers appreciate working with our team based in North America. Customers are seeking suppliers in similar time zones, which provides for easy travel for meetings and more predictable and cost-effective logistics.

Semcer: There have definitely been signs of it, even with some new projects; however, significant and noticeable reshoring will take a lot of time.

Siddhartha: Absolutely. Flexan has a very strong footprint in North America (with four facilities across the U.S. and Mexico), a facility in China, and access to Ingersoll Rand facilities in Europe and Asia.

We continue to field questions and inquiries from customers as they move to regionalize their supply chains and seek partners in each region. For example, we have a customer with global operations but sales primarily in North America and Europe, looking to build a supply chain in China. Conversely, we have a customer with an Asia-centric supply chain supplying the rest of the world starting to stand-up supply chains in each major geography.

Stowik: AVNA opened its doors in Costa Rica in 2012 and since then has seen steady growth in customers interested in partnering for both supply chain risk and cost mitigation strategies.

Fenske: Have you put effort toward retooling your material/component sourcing so as to source closer to your facilities and avoid long supply chains?

Boschetti: Yes, we have placed a greater emphasis on regional sourcing to enhance supply chain resilience. While some specialized components must still be sourced globally, we have strategically diversified our supplier base to reduce dependence on single regions. This approach has improved lead times, reduced transportation costs, and minimized exposure to geopolitical risks. By strengthening local supplier relationships, we ensure continuity while maintaining the highest quality standards.

Freeman: Yes. New suppliers have been developed and established closer to our manufacturing facilities in Vietnam and Mexico. This is an important part of reducing the length of the supply chain.

Huntington: We are highly focused on vertical integration and domestic supply chain redundancy.

Hutchison: Having a stable and reliable supply chain is the critical element. The transportation is not a critical issue. We consistently look at our core competitive advantages and in-source where appropriate to ensure the best lead times and security of supply for our OEM partners.

Muchin: Yes, we have made significant efforts to retool our material and component sourcing to reduce reliance on long, complex supply chains. Over the past few years, we’ve strategically shifted toward sourcing closer to our facilities, prioritizing domestic and nearshore suppliers whenever possible. This approach has helped us improve supply chain resilience, reduce lead times, and enhance overall production efficiency.

We also continue to work closely with our customers to identify alternative materials and suppliers that align with their quality and regulatory requirements while ensuring a more stable and responsive supply chain.

O’Malley: Fortunately, we have a robust supply base near our operations so we can minimize lead times and logistical expenses.

Semcer: Fortunately, most of our supply chain is locally sourced, with the exception of our partnerships in Singapore and South Korea. At MICRO, we are proud to source locally and see benefits in terms of cost but also to the environment and our community.

Fenske: What impact, if any, have international conflicts (e.g., Ukraine/Russia, Israel/Gaza) had on your company and/or sourcing materials/components?

Freeman: The conflicts have had minimal impact on our business. However, we do have an OEM customer in Israel that has been manufacturing many of their products themselves. As a result of the conflict, they have been more active in seeking CMOs outside of Israel to help them with production as part of their effort to diversify risk and support them in their efforts to bring products to market faster.

Muchin: International conflicts have added new layers of complexity to global supply chains, impacting both material availability and costs. While we have not faced direct disruptions in our operations, we have seen increased volatility in raw material pricing, longer lead times for certain components, and heightened logistical challenges.

To mitigate these risks, we have strengthened our sourcing strategies by diversifying suppliers, prioritizing nearshore and domestic options, and maintaining higher safety stock levels for critical materials. Our focus remains on ensuring a stable and resilient supply chain so we can continue delivering high-quality products without disruption.

Fenske: Since the pandemic, have you revisited/revised disaster plans to address future crises? Has this become a more important question for your customers/prospective clients?

Boschetti: Absolutely. Business continuity planning is no longer just a compliance exercise—it’s a critical part of supply chain strategy. We have enhanced our risk management frameworks, implemented digital monitoring tools, and built redundancy into our supplier networks. Customers are asking more questions about crisis preparedness, and we’ve responded by increasing transparency and strengthening our response plans. These efforts have made us a more reliable and proactive partner.

Freeman: We have an internal process by which business continuity plans are reviewed and improved over time. The more pressing issue at the moment is with respect to current and prospective OEM customers’ concerns over tariffs.

Hutchison: Yes. Business continuity planning is now a major focus for OEMs. Confluent has enhanced our risk mitigation strategies, ensuring redundancy in supply chains and implementing proactive measures to safeguard production.

Kasprzak: We collaborate with customers to validate multiple materials from the outset of a program, aiming to mitigate supply chain risks and ensure continuity of supply.

Muchin: Before the pandemic, TEAM Technologies already had a comprehensive plan in place that accounted for more than just a local or global health crisis. However, like many of our peers in the industry, the challenges brought by COVID prompted us to refine and enhance our strategy.

Novak: We have a disaster recovery plan in place that continues to evolve as we review new and changing environments.

O’Malley: Yes, in addition to the pandemic, there have been a number of impactful natural disasters that reinforce the necessity for strong business continuity plans.

Semcer: This has always been an evolving process as part of our risk management strategy. Some recent examples are documenting and tracing supply chains, finding alternative sourcing, redundant equipment and/or facilities, strengthening cyber security, and process improvements and automation.

Stowik: The pandemic really highlighted the need to not only have a disaster recovery plan but to have one that can be effectively executed. We do have customers who request confirmation of a plan and others who request a copy for their review and records. We review and update our plan annually or as needed and integrate industry best practice strategies, customer feedback, and lessons learned. We have also incorporated periodic “dry run” drills to ensure all personnel understand their roles and responsibilities for internal and external notifications and mitigation and recovery activities.

Taylor: Yes. Foxx now operates five manufacturing facilities. Redundancy with quality systems, tooling, and operational systems is all a part of our strategy with OEMs.

Fenske: As a result of the concerns around EtO (ethylene oxide) sterilization, are you exploring alternatives more often than before? 

Muchin: With many of our customers relying on EtO sterilization for their products, this topic has become increasingly important. We have explored alternative sterilization methods and encouraged customers to evaluate other options early in the development of new programs. Since revalidating products for EtO sterilization is a complex and resource-intensive process, proactive planning is essential.

Novak: We work with customers to explore all their sterilization options, including QSTERILE—a pre-validated EtO cycle launched by Cretex Medical | QTS. With QSTERILE, only product-specific elements of the validation need to be conducted, which can cut the EtO validation timeline by more than half. We also use a cycle calculation approach combined with a low-concentration EtO cycle, so not only do we reduce EtO emissions, we’re still ensuring a safe and sterilized product.

To mitigate the risk of supply chain bottlenecks, we also encourage customers to qualify multiple sterilization modalities when possible. Switching modalities after initial validation is more challenging due to material compatibility concerns, costs, regulatory considerations, and time. However, planning for this upfront can significantly reduce unexpected costs and effort.

O’Malley: Great question. There is a safe way to process EtO. Centerpiece has invested in a world-class EtO processing and emissions controls system with zero detectable emissions. I am proud to work for a company that prioritizes employee safety and protects our environment.

Taylor: We continue to evaluate e-beam and X-ray. However, 95% of our sterilization is accomplished with gamma. We offer product gamma-sterilized in the U.S. or India.

Fenske: Do you have a plan in place should tariffs come into play for your suppliers or customers? Or, is there another industry issue you are concerned with regarding the new administration? 

Freeman: Given the tariff policy has been changing, our organization is promoting the concept of flexibility and maintaining production line availability at each of our manufacturing locations in Mexico, Vietnam, and China. The tariff policy seems to fluctuate based on the country and is not clear yet. It is expected the tariff policy will influence the decision on where devices should be made as well as the end market for the device.

Hall: While MMT has worked diligently to minimize the impact of tariff changes on customers, we’ve had to make adjustments that reflect this new reality. As part of our commitment to our customers, we have been transparent throughout this process and have communicated the specific impacts related to all products. We understand this situation is fluid, which is why clear communication is so important.

Huntington: Following the pandemic, we made a concerted effort to build redundancy in our raw material supply chain as well as add flex capacity for expected reshoring that could be driven by tariffs.

Metcalf: We have a clear internal tariff strategy in place. When we are notified of tariffs on our imports, we follow a procedure to track these changes and may update quotes to include relevant surcharges. We have communicated the risks associated with tariffs to our customers and are striving to remain as flexible as possible during this dynamic and unique time.

Novak: Along with our customers and suppliers, we are continuing to monitor the situation. To prepare for possible disruptions, we’ve modified some of the language in our contracts.

O’Malley: There has been a lot of concern about proposed tariffs, which would have a negative impact on the entire industry and overall healthcare costs. We are actively monitoring this dynamic situation and working with our customers to provide the necessary supporting documentation for exemption. We will also continue to partner with trade and advocacy organizations to lobby for the industry.

Semcer: The vast majority of our raw materials are sourced in the U.S., so we do not foresee any real challenges in that regard. Having said that, since the new administration is quite fluid at the moment, we are actively monitoring potential tariffs. As with the most recent Executive Order, we are assessing the impact of the 25% tariff on steel and aluminum, as well as the removal of all exclusions. For our direct purchases, we already have the ability to estimate and track. For our suppliers, we are actively engaged in assessing the impact. Although we don’t source much internationally, having dealt with quota issues in 2018 and 2019, we are confident we will be able to navigate any tariff issue moving forward.

Stowik: Regarding tariffs, I think everyone is on edge right now without a full understanding of the policies poised to be implemented, if there will be exemptions available to pursue, or the overall impact on our businesses. This includes suppliers, contract manufacturers like AVNA, and OEM customers. The bottom line is we are all planning for them, know that there will be a financial impact, and believe it’s been universally accepted that tariffs are here and will need to be recovered throughout the supply chain. What we don’t know is if there will be a ripple effect and create other disruptions with supply and ultimately demand for products or procedures.

Taylor: Our strategy continues to be local-for-local with little to no impact from tariffs. With two manufacturing plants in the U.S., we are ready to support our local customers. With three plants in India, we are ready to support our APAC customers.

Fenske: Do your product development protocols address sustainability or recyclability? Is this something customers request?

Boschetti: Yes, sustainability is a core value at B. Braun and is deeply embedded in our product development processes. We are committed to reducing our environmental footprint by designing products and packaging that prioritize safety and environmental responsibility. For instance, we have never manufactured our IV containers with DEHP or PVC, reflecting our dedication to patient and environmental safety. Our efforts include reducing plastic usage, utilizing recyclable materials, and optimizing packaging designs to minimize waste.

Customers are increasingly seeking sustainable solutions, and we collaborate closely with them to meet these expectations. Our goal is to balance patient safety, regulatory compliance, and environmental stewardship, ensuring our innovations contribute positively to healthcare and the planet.

Hall: At an increasing rate, we are observing more requests to provide information on MMT’s corporate position regarding sustainability and recyclability. This is something we continue to review.

Muchin: We are seeing a growing shift among customers toward sustainable solutions. To support this, we are working with various sustainable resins for our injection molding customers, exploring lightweight synthetic and cellulose-based textiles as well as working with film suppliers that offer materials with recycled content. Since many of the products we manufacture are disposable due to patient contact, customers are also focusing on sustainable packaging and other ways to minimize their overall carbon footprint, even when product design constraints limit direct reductions.

Raw material suppliers are also advancing their sustainable offerings, but end customers are often disconnected from lower-tier suppliers. When possible, we facilitate connections between customers and these emerging solutions to accelerate their transition. Additionally, our expertise allows us to identify and integrate sustainable materials, including post-consumer recycled and post-industrial recycled plastics, bio-based alternatives, and material blends.

To enhance sustainability, we are committed to vertical integration by bringing more processes in-house and reducing the need for excess packaging, transportation, and handling—key Lean principles that help eliminate waste and inefficiencies.

Recognizing the global impact of climate change, we actively invest in cutting-edge technologies to monitor and reduce emissions while implementing energy-efficient infrastructure improvements. Our sustainability initiatives include ECO power solutions for auxiliary equipment, hot runner tool designs to minimize material waste, high-efficiency closed-loop water systems to reduce consumption, and comprehensive recycling programs for plastic and corrugated materials.

Novak: Cretex is committed to responsible environmental practices. Our culture of operational excellence continuously drives creative solutions to reduce scrap and minimize energy and resource consumption. We’ve also begun to perform lifecycle assessments (LCAs) on product packaging. The LCA evaluation identifies ways to increase efficiency and sustainability. We can then work closely with customers to redesign the packaging. In one instance, the environmental impact of the customer’s product was reduced by 50%.

O’Malley: This is a key priority for us and our customers—this has to be a part of the development process to protect our environment. We offer efficient and sustainable EtO processing and cycle development to optimize existing cycles. We also work with customers to develop sustainable packaging solutions to reduce waste and leverage recyclable materials.

Semcer: We are seeing more requests from customers regarding sustainability programs. In addition to all our certifications, we already monitor and record many key items. MICRO’s culture is one of cultivating sustainable relationships for our people and our community that ladder up to ESG goals and many aspects of our business. We are currently updating our EH&S policy to include common sustainability requests.

Taylor: Yes. This is and will be more important going forward. Foxx has a major sustainability plan in place, and we continue to put a lot of work into this area.

Fenske: When faced with an OEM customer who presents consistent requests for a percentage cost reduction year over year, does it cause a rift in the relationship or a reevaluation of whether the customer’s business is worth it? (or, have you experienced this at all?)

Freeman: It is important to identify the expectations upfront and have cost reductions be contractually understood. Under what conditions are there price reductions and under what conditions are there price increases? Both OEM customers and ourselves are incentivized to reduce the unit cost with the hope volumes can increase. Understanding the expectations of the parties involved helps both parties to align what is expected and work toward a common goal. It is expected costs will be reduced over time and there may be opportunities for increased volume as a result of the reduction.

Huntington: Year-over-year cost reductions are a reasonable and expected request from OEMs. Best-in-class OEMs who can demonstrate consistency in their demand signal and streamline the change control process should receive annual cost reductions as part of an ongoing strategic partnership.

Hutchison: In general, OEMs understand that a partner that is expected to provide high quality, engineering, material science, and robust systems expects a fair margin. At Confluent, generally speaking, we have not had issues with our OEM customers regarding cost-down requests.

Metcalf: We have encountered requests for discounted pricing from our customer base year after year. We find that these requests often stem from pressure they experience with their own customers. When we take the time to understand the constraints our customers are facing, we frequently discover that a pure discount is not the best solution. Many customers are open to exploring other forms of cost savings or efficiencies.

This situation presents an opportunity for us to have candid discussions about the full range of our portfolio. We can collaborate to create a strategic offering that truly meets their needs. As we provide solutions in extrusions, automation, service, and maintenance—as well as a complete suite of equipment for production floors—we can often alleviate the pressures customers experience by examining how we can leverage our entire portfolio to address their challenges.

Muchin: Year-over-year price reduction requests have long been a part of contract manufacturing. At TEAM Technologies, we welcome these discussions but believe they should be approached collaboratively to ensure mutually beneficial solutions. Rather than simply lowering prices, we work with customers to explore alternatives such as cost-effective material sourcing and design for manufacturability improvements. Given the rising costs of raw materials and labor, ongoing price reductions must be balanced with strategic initiatives that drive efficiency and long-term value for both parties.

Novak: Requests must be within reason. Key to building long-term relationships with customers is a mutual understanding that we are both taking reasonable actions to manage costs and drive sustained growth. We support our customers through our focus on innovation, robust operational excellence culture, and cost-reduction mindset. We also work closely with customers to implement design-for-manufacturability enhancements that maximize the efficiency of production processes while maintaining the highest quality standards.

O’Malley: Many customers have cost-down imperatives, which can be at odds during inflationary times. We appreciate these year-over-year cost-down goals, but suppliers also need to maintain fair margins. It goes back to having a strong customer relationship, providing value, and sometimes having to adjust pricing to reflect realized cost increases. Cost transparency can be beneficial for both sides to understand the various cost levers so the respective teams can focus efforts on cost-down opportunities, including bill of materials reductions or efficiencies in the manufacturing process.

Semcer: We are willing to participate when there is an effort made toward VA/VE solutions that result in true savings, but that only works if both parties participate. If an OEM is unwilling or unable to make any changes to their process, cost reductions can become difficult to realize. Simply reducing margins year-over-year is not tenable for suppliers or, ultimately, OEMs who need a healthy supply chain. Another alternative approach is to participate in a vis-a-vis price-volume relationship. If an OEM is willing to give us a long-term commitment, it allows us to liquidate fixed assets over a greater volume.

Siddhartha: I would refer back to my comments earlier regarding an OEM and CMO establishing a true partnership. There has to be an ongoing mutual benefit in the relationship and a foundation of trust for conversations like this.

In a one-sided relationship, conversations like this are fraught with risk and impaired by a lack of trust. On the other hand, we have experienced situations where we are able to find a win-win outcome through value analysis/value engineering, growing the book of business or other creative solutions. But, trust and a willingness to come to the table must come first to avoid rifts.

Taylor: Our view is simple, manage the relationship with facts and integrity. If we are able to provide a price reduction, we do. We did a lot of this for 2025 for our customers. However, if we are unable, we will try to supply open-book details on why it was not possible. Customers appreciate the transparency versus a “Here is your price increase without any explanation” approach.

Fenske: The industry is experiencing a shortage of skilled labor for many positions. How is your company addressing this and what are you doing to attract/retain/develop talent?

Boschetti: Attracting and retaining top talent is a key priority for B. Braun. We are investing in workforce development through apprenticeship programs, university partnerships, and specialized training initiatives. Internally, we focus on professional development opportunities, mentorship programs, employee resource groups, and competitive total rewards to drive employee engagement and retention. Additionally, we are leveraging automation and digital tools to reduce dependency on highly specialized labor while maintaining quality and efficiency.

Freeman: The labor shortage will likely continue to persist. We continue to develop new talent, promote from within (where possible), and recruit globally. In addition, over the years, we have increasingly invested in automation, including the use of robots. This trend will continue.

Huntington: As a growth-oriented company, we focus
on retaining and attracting talent with flexible work schedules, strong benefits, and an aggressive approach for professional advancement.

Hutchison: We invest in workforce development, training programs, and employee engagement initiatives to attract and retain top talent. Confluent fosters a culture of innovation and growth to support long-term success.

Kiernan: The shortage of skilled labor is a challenge we’re addressing with a multifaceted approach. At Freudenberg Medical, we are focused on both attracting new talent and upskilling our current workforce to ensure we have the expertise needed to meet growing demand.

One of the ways we’re addressing this challenge is through innovative VR training programs for operators. This immersive technology allows new hires to quickly gain the skills needed for complex manufacturing tasks in a safe and efficient environment, while also enabling experienced employees to enhance their expertise. It’s a key tool in accelerating training and improving retention by offering employees a more engaging learning experience.

Additionally, we are investing in automation to reduce our dependency on manual labor for repetitive tasks.

Metcalf: We’ve recognized a shortage of skilled labor across many of our business units and have continually focused on talent retention and development. We recognize the culture of our organization is critical as well as strong leadership development. Despite a destocking year in 2024, we’ve continued to invest in our people.

We’ve also maintained a compensation strategy that keeps us ahead of the market average for total rewards, as well as having ongoing team-building events.

Finally, MMT recognizes and regularly shares employee and customer stories of how our work makes an impact on healthcare worldwide. We are truly living our mission out loud each and every day: “What You Make Every Day, Means Everything to Someone.”

Muchin: As a U.S.-based manufacturer, we recognize the ongoing challenge of finding skilled labor and are actively addressing this issue through multiple strategies. To attract talent, we’ve partnered with local technical schools and universities to build a pipeline of skilled workers, offering internships and apprenticeship programs that provide hands-on experience and potential career paths within our company.

To retain talent, we focus on creating a positive and supportive work environment, offering competitive wages, benefits, and opportunities for advancement. We also invest in ongoing employee development through training programs and certifications to help our team members expand their skills and grow within the organization.

We are leveraging technology and automation to enhance productivity and reduce the reliance on labor-intensive tasks, which allows our skilled workforce to focus on higher-value activities. By prioritizing talent development and creating a strong company culture, we’re committed to ensuring our workforce remains skilled and engaged in an evolving industry.

Novak: One of our core pillars is Employee Experience. Sustaining an employee-centric culture is not only the right thing to do, it also drives business results. Supporting and celebrating our employees also means continually investing in employee development. Focusing on culture has had an amazing impact on attracting and retaining top talent. While some positions may be more challenging to fill than others, we know the guiding values from our family ownership structure and the positive culture we’ve built have made our organization an employer of choice in a competitive labor market.

Semcer: MICRO has a long history of recruiting new talent and has created four key programs to facilitate and encourage employee retention and growth at all levels.

• Toolmaker Apprenticeship Program—A four-year, state-sponsored apprenticeship that combines classroom instruction with hands-on training. Upon completion, graduates embark on careers maintaining MICRO’s tools and dies.
• Maintenance Technician Apprenticeship Program—A four-year, state-sponsored apprenticeship that provides both classroom education and practical training. Graduates of the program pursue careers in equipment maintenance.
• Co-op and Internship Program—Designed to offer students and emerging professionals hands-on experience in a manufacturing environment. This program focuses on skill development, professional growth, and real-world industry exposure, reinforcing MICRO’s commitment to workforce development and talent cultivation.
• Rotational Engineering Program—Aimed at recent graduates, this program provides exposure to multiple engineering disciplines within MICRO. Participants rotate every six months through roles in quality engineering, process engineering, and process development engineering. At the program’s conclusion, MICRO collaborates with the participant to determine the best fit based on their engineering preferences and the company’s needs.

Siddhartha: Ingersoll Rand has been a Great Place to Work for many years running across multiple geographies. One of our core values at Ingersoll Rand is that we think and act like owners. After our first year at Ingersoll Rand, full-time employees are offered a one-time grant, designed to make us owners of the company. We feel it is important that as our organization grows, our employees have the opportunity to be shareholders.

We also have a natural advantage in that we continue to press, which is our core mission—to serve patients globally. People understand that and connect to it.

Beyond that, it’s critical we continue to build skills and invest in our employees through skills-based training. This is a key initiative for us today and something we’re investing heavily in across all the core technical skills within our business that enable life-saving therapies.

Stowik: AVNA’s mission is “Improving lives, one part at a time.” The guiding pillars that allow us to do this are our 4 Ps—People, Passion, Partnership, and Performance.

There is a clear reason why people are first. We highly value our people and the unique capabilities and contributions they make every day to support our customers and our culture. Like many states, we have a limited pipeline of next-generation tool and die makers and other technical experts coming into the industry. AVNA has developed certified in-house apprenticeship programs for our core technologies, consistently evaluates the effectiveness of the programs, and implements improvement ideas to keep them fresh and current with our needs. We are also connected to local middle and high schools, technical colleges, and industry organizations to promote and support career growth in the medical manufacturing industry. We spend a lot of energy connecting purpose with the positions. This happens early in our recruitment campaigns and is a major component of our onboarding process and ongoing employee communication. When people feel a real sense of connection to their work and understand the applications and importance of what they do every day, there is a greater sense of ownership and pride that becomes contagious. This has measurable effects on our ability to attract and retain candidates.

Taylor: This is a major challenge for many companies. We put a lot of effort into intern programs and engineer-in-training programs. These provide a feeder for future team members.

Fenske: What trend(s) in medtech will you be following in the near- and/or long-term you expect to become more important or could have a significant impact on the industry? Explain.

Boschetti: The continued integration of digital health and connected devices is a major trend shaping medtech. AI-driven analytics, smart devices, and real-time monitoring are revolutionizing patient care and hospital efficiency. Additionally, supply chain resilience, sustainability, and regulatory evolution will remain top priorities. Long-term automation in manufacturing and personalized medicine will drive further transformation. At B. Braun, we are actively investing in these areas to support the evolving needs of our partners and ensure we remain at the forefront of innovation in medical technology.

Freeman: We are increasingly interested in studying the impacts of artificial intelligence on the medical device industry and the implications it will have on product development. In addition, as technology companies such as Google and Apple have entered the medical device industry, I believe it will continue to encourage OEMs to develop and bring to market certain medical devices faster than in previous years. Growth in home healthcare, telemedicine, artificial intelligence, and demographics will continue to drive expansion and the need for continued research and development. Merger and acquisition activity in the near and long term will also be of interest.

Hall: I will be watching closely as industry CDMOs continue to combine forces. There have been several key mergers and partnerships that have occurred in 2025, and I’m interested to see how this trend evolves.

Highley: Implantable neuromodulation devices and advanced interventional therapies will continue to drive significant industry advancements. For instance, emerging neuromodulation therapies, such as deep brain stimulation, peripheral nerve stimulation, sacral nerve stimulation, vagus nerve stimulation, and brain-computer interfaces, as well as treatments targeting specific nerves in conditions like sleep apnea, overactive bladder, neurological diseases, and chronic pain are broadening the range of treatable conditions. Furthermore, advancements in interventional therapies, including pulsed field ablation (PFA) for atrial fibrillation, offer safer, more efficient alternatives to traditional procedures by using non-thermal electrical pulses to ablate cardiac tissue, minimizing collateral damage and improving recovery times. These developments highlight a broader shift toward personalized, minimally invasive medical interventions with the potential to revolutionize treatment paradigms and enhance patient outcomes.

Hutchison: Advancements in materials science, miniaturization, and smart medical devices are key trends. Our investment in nitinol and polymer technologies positions us at the forefront of innovation.

Muchin: We track several key benchmarks as leading indicators to assess the current and future health of the medical device sector. One important indicator is M&A activity within the CMO space. When companies are actively acquiring, consolidating, and expanding, it signals financial strength, allowing them to offer more versatile solutions to OEMs. Another key indicator is the Medtech Capital Markets Sector, which has consistently outperformed the S&P 500 over the past decade. While there have been some recent pullbacks, the sector’s overall performance remains robust. However, if this trend begins to decline, it would warrant caution regarding the industry’s future outlook.

Novak: We are keeping a keen eye on faster-paced growth areas within the transcatheter-based surgery market. This area is driving significant innovation surrounding micro-manufacturing, utilizing a combination of various capabilities to support less invasive surgeries. This is already having a major impact on the electrophysiology space, heart valve replacement and repair, and leadless pacing market segments.

Robotic-based surgery is another segment with a significant impact on the market. As AI usage grows in medtech, it will give medical providers more information and flexibility. This will drive more procedures to be successfully completed utilizing robots.

Taylor: Tariffs will drive more local-to-local manufacturing by OEMs.

Fenske: Do you have any additional comments you’d like to share regarding the OEM/CMO relationship within the medical device development and manufacturing community?

Hutchison: A strong, collaborative partnership between OEMs and CMOs is critical for bringing next-generation medical devices to market efficiently. Confluent’s vertically integrated supply chain, secure nitinol sourcing, and reliable end-to-end manufacturing expertise make us the trusted partner for current and future medical devices.

Semcer: At MICRO, the ultimate impact of the OEM/CMO relationship motivates our people. We know products made at our facilities end up in our customers’ devices that could be improving the health of one of our family members, or someone halfway around the world. Our drive to solve engineering challenges and our curiosity to find new ways to innovate with new approaches and technologies is aligned with the missions of our customers. There is a clarity of purpose shared between medical device OEMs and the contract manufacturing community.

Taylor: Organizations like MPO are key to maintaining and improving communication, trends, technology updates, and challenges between OEMs and CMOs.