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The idea of reshoring medical device manufacturing to the United States is gaining popularity due to factors like tariffs, supply chain disruptions caused by COVID-19, geopolitical tensions, and national security concerns. However, challenges include the higher cost of domestic manufacturing, a shortage of skilled labor, dependency on international supply chains for raw materials, and regulatory and quality requirements that could slow timelines and raise costs. Despite these hurdles, momentum for reshoring continues, driven by tariffs, federal incentives, state-level economic development programs, and interest from public and private sectors, with the focus being on how to balance cost, quality, resilience and innovation.
US Medical Device Manufacturing Reshoring: Hurdles and Prospects
The concept of reshoring medical device production to the US has gained ground due to tariffs, COVID-19 supply chain disruptions, geopolitical concerns, and national security focus. Advocates highlight that this can fortify domestic supply chains, generate jobs, and guarantee prompt, reliable access to crucial medical technologies.
However, reshoring brings its own challenges, starting with cost. Offshore manufacturing, particularly in Asia, has traditionally been cost-effective due to lower labor and production expenses. Mirroring this cost structure domestically is tough, especially for high-volume, price-sensitive items.
Besides, skilled labor shortages add complexity. Over the past two decades, many specialized manufacturing roles have shifted overseas, leaving a void in the US workforce. It’s a significant task to recruit, train, and retain workers skilled in precision manufacturing, cleanroom operations, and quality control.
Infrastructure and supply chain dependencies also play a part. Even if assembly is reshored, most raw materials, electronic components, and subassemblies continue to be sourced internationally. Significant investment and industry-wide coordination are required to establish a fully domestic supply chain.
Regulatory and quality requirements add to the challenge. Medical device production is stringently regulated. Any production location shift can initiate new validation processes, inspections, and compliance obstacles that extend timelines and escalate costs.
Despite these obstacles, reshoring momentum persists, stimulated by tariffs, federal incentives, state-level economic development programs, and growing interest from various sectors. The decision to reshore is not just about whether to do it, but how to balance cost, quality, and resilience, keeping innovation at the heart.
Orion Innovations’ CEO, Rodney Schutt, offers insights on the comparison between domestic and overseas manufacturing costs in a recent discussion on reshoring manufacturing to the US.
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