There is a growing demand for vertically integrated contract manufacturing partners among original equipment manufacturers (OEMs) in the medical device industry. Sonoco Plastics offers injection molding, assembly, and packaging services, positioning itself as a strategic differentiator in the market, according to Kevin Ludlow, the company’s strategic business development manager.

At the MEDICA convention in Dusseldorf, Ludlow highlighted the trend of contract manufacturers offering vertically integrated solutions, covering design, cleanroom assembly, packaging, and global distribution, to meet the increasing demand from OEMs for full-cycle partners. This shift reflects broader industry research on current trends in the medtech sector.

A report by McKinsey revealed that many companies in the medical device industry are resetting their manufacturing and supply chain cost base, focusing on continuous cost optimization post-Covid-19. Alira Health’s report also emphasized that vertical integration is a key driver of M&A activity, with acquirers targeting core competencies like design & development and assembly services.

Intricon’s report highlighted that OEMs are streamlining their approved supplier lists, opting for less fragmented and more certain supply chains by partnering with manufacturers offering vertically integrated services. Ludlow noted that large medical device OEMs prioritize design, development, and sales, making speed, time to market, and cost crucial metrics in evaluating vertical integration.

The importance of vertical integration for medtech OEMs was discussed at Medica 2025, emphasizing the industry’s shift towards full-cycle partners. This trend reflects a strategic move towards efficiency, speed, and cost-effectiveness in the medical device manufacturing landscape.

Read more at Yahoo Finance: vertical integration gains importance for medtech OEMs