“MICRO’s customers increasingly want to consolidate supply chains, so full-service suppliers who can support product and process development, component manufacturing, and assembly will have a competitive edge. Our Costa Rica facility will enable our company to expand our global footprint, better serve our customers, and remain cost competitive as a full-service preferred contract partner.”
– Al Carolonza, MICRO
Medical device innovation continues to advance healthcare; however, the pandemic is still having an impact on markets and supply chains. Contract manufacturers must work to help original equipment manufacturers (OEMS) address these challenges and some are finding new ways to meet market demands.
MICRO’s Al Carolonza, featured in a recent article for Medical Device and Diagnostic Imaging (MD+DI), explained that as healthcare facilities return to pre-pandemic elective surgeries, manufacturers are struggling to catch up with increased demand for parts and products. The pandemic forced many hospitals and healthcare facilities to reduce, or pause completely, all elective surgeries before a vaccine was widely available, Carolonza noted in the article. They may have been reluctant to hold onto product inventory as demand for single-use instruments and other surgical devices decreased as a result of fewer procedures being performed.
Now, the entire supply chain is impacted by bottlenecks on raw materials from suppliers and mills forced to shut down earlier in the pandemic. Rising prices for raw materials are another issue manufacturers have had to contend with as suppliers raise prices on materials in high demand.
With elective surgeries back to near pre-pandemic levels in most markets, manufacturers are struggling to catch up with sudden increased demand for parts and products. There’s a real domino effect in play that impacts everyone across the supply chain, including contract manufacturers, Carolonza explained.
The supply backlogs are likely to return to where they need to be, and it will be a gradual build. Contractors have to ensure that our customers understand these market fluctuations and factor that into project timelines and lead times. Contractors may also face resistance in passing these costs along to customers and will need to make their customers aware of these factors that can impact delivery and profit margins.
Some contract manufacturers like MICRO are responding to market needs to consolidate supply chains by expanding their footprint to better serve customers and to meet new market demands. In April 2021 MICRO announced plans to expand its full-service medical contract manufacturing operations in Costa Rica. The new manufacturing facility is expected to open later this year with operations beginning in early 2022, Carolonza noted. The new 32,000-sq-ft facility will have a cleanroom assembly facility within the manufacturing center, allowing MICRO to better respond to our customers’ needs with cost-effective, full-service contract solutions for complex medical assemblies.