The Benefits of Nearshoring in Europe
European medical device companies understand the need to build resilient supply chains. The importance of this was highlighted by the recent COVID-19 pandemic, which exposed serious gaps in many global supply chains.
To address supply chain weaknesses, offshoring is often an easy decision for many companies, especially when onshoring is not achievable. But in most cases, the best choice is nearshoring.
Nearshoring enables European medical device companies to work with expert-level partners who are working similar work hours, limiting late-night and early-morning phone calls with offshore companies.
For example, the automotive industry has benefited for many generations from the deeply embedded connectivity between the UK and Germany. This reciprocating relationship is knit together via city-to-city ties. An example of this connectivity is the relationship between Stuttgart, Germany, and Cardiff, Wales. In 1955 Stuttgart Germany and Cardiff Wales officially became civil siblings. This partnership originated through the “Twinning Program” which was established to enable the transfer of knowledge, experience, and skills between cities. At current there are twenty-six German and Welsh towns and cities with twinning arrangements. These relationships provide a sturdy foundation for the medical device market to build from and further develop.
Over the last ten years, the European medical device market has grown at an average of 4.8% per year. In 2021, 27.3% of the world medical device market was represented by the European medical device market, second only to the United States.
Total trade in goods and services (exports plus imports) between the UK and Germany was £140.8 billion between Q2 2022 and Q1 2023. The number one export from the UK to Germany was medical-associated products, accounting for 8.5% of the exported goods. (As a note, and likely to no surprise, the largest exported good from Germany to the UK was cars, at almost 24%).
Wales's strength in location, history of manufacturing, and long-standing global relationships with Germany, Ireland, France, and other European countries with rich histories in medical device design, development, and sales make it an ideal location to partner with medical device contract manufacturing companies.
Wales's second, third, fourth, and fifth largest export trade partners are Germany, Ireland, France, and The Netherlands (the United States is number one.) These four countries represent approximately 50% of Europe’s total medical device spend.
Many European medical corporations have chosen to shift their focus for nearshoring to Wales where there exists a depth of knowledge, the ability to automate production to produce high volumes and high medical device quality standards.
The decision-making process for a European medical device manufacturing company to partner with a medical device contract manufacturing company is complex.
Of the multiple aspects that must be considered when aligning with a manufacturing partner, we suggest considering items such as:
Multiple global manufacturing locations and redundancies
- Can the partner manufacture in the Western Hemisphere, as well as the Eastern Hemisphere? Will they be able to support your global expansion plans?
True vertical integration
- Will the partner be able to manufacture the major parts of your medical device? How many of those manufacturing processes does the prospective partner have in-house?
The 13485 process
- Does the partner have the Quality, Regulatory, and Engineering capabilities to support throughout the 13485-design control process?
- Is the partner innovating, designing, developing, and preparing to support your next product prior to you engaging them? Can they show you their independent innovation efforts?
As a European-based medical device OEM (Original Equipment Manufacturer), a strategic manufacturing partner located in Europe will be key to your success. ATL Technology has over 30 years of experience partnering with the world’s leading medical device OEMs. ATL has three main manufacturing locations, Dongguan, China, San Jose, Costa Rica, and Cardiff, Wales.
Our Cardiff location originated as Gyrus Medical Limited. This location has been producing medical devices for over thirty years and has a team with expertise in electrosurgical, camera-based imaging devices, and point-of-care products.
ATL’s Cardiff location is unique in that it can support complete system manufacturing for single-use and reusable medical devices, as well as the RF (Radio Frequency) generators to drive them.
As you are considering your future, aligning on the right supply chain strategy, and considering a manufacturing partner, we look forward to speaking with you.
The following graph is a breakdown of the European medical device market by country, as reported by the organization MedTech Europe.