Supply Chain Management in Medical Technology: Trends and Operating Model

The European medtech market had an estimated volume of around EUR 170 billion in 2024. More than 38,000 medtech companies operate in Europe, around 90 % of them small and medium-sized enterprises. According to BVMed, German medtech manufacturers generate 68 % of their revenue abroad. In this delimitation, Europe comprises the EU27, the United Kingdom, Norway and Switzerland; market size and manufacturer revenue have different reference bases.

For supply chain management, this structure means: a large, cross-border market meets many specialised suppliers. Planning and collaboration must match the partners' capabilities. A small specialist supplier may need earlier demand signals and support in building capacity. Shared rules for data, quality and escalation create a reliable framework without imposing the same planning effort on every partner.

At the same time, cost pressure is growing. In the BVMed autumn survey 2025 (n = 116 companies, August/September 2025), 51 % of participants expected their profit situation to deteriorate. As burdens, 65 % named MDR costs, 64 % personnel, 56 % the shortage of skilled workers and 44 % logistics. The whitepaper notes that this is a member survey with multiple answers, not a representative survey of all medtech companies.

For SCM, the lever lies in the causes of this effort. When sales, procurement and production plan with different demand figures, excess stock arises alongside shortages. Frequent re-planning also increases coordination and express costs. A shared plan makes these relationships visible and allows targeted measures whose effect the team checks against cost and delivery performance. The management summary's core message is accordingly: supply and profitability belong together. SCM must justify which inventories secure supply and where avoidable costs arise.

In the whitepaper, the view of the supply chain extends from critical input materials to released goods at the customer. It follows four stages: Source (critical input materials and sub-suppliers), Make (production, testing and documentation), Sterilisation (an external process step that is part of the production system) and Deliver (released goods at the customer). Sterilisation plays a special role: according to the FDA, around 50 % of sterile medical devices in the USA are sterilised with ethylene oxide – a structural indicator, not an EU share.

SCM connects the decisions along this delivery path. Procurement clarifies which capacity a partner can actually provide; planning takes external processes and releases into account. Two suppliers may use the same sub-supplier. The team therefore checks shared dependencies and plans alternatives for the entire supply of a product family.

The NEXERY trend radar forms the thematic basis and positions ten fields of action by their contribution to supply and profitability and by need for action. Six fields belong to strategy and management: S&OP/IBP and service targets, geopolitics and network design, resilience and diversification, traceability, cybersecurity and restart, and lifecycle and circular flows. Four fields are supporting technologies: simulation and capacity planning, data integration, AI agents and decisions, and robotics and automation. In the priority quadrant sit S&OP/IBP, geopolitics and network design, resilience and traceability. The classification is qualitative; priorities must be checked company by company.

Every trend field requires a concrete change in the model. The whitepaper condenses the ten fields into five SCM fields of action with requirements for the operating model: integrated planning (S&OP/IBP links volumes, service targets and financial impact), network and resilience (scenarios assess sites, capacities and reserves together), transparency and protection (product and release status remain traceable, critical systems are protected), lifecycle (inventory and service rules for spare parts, product phase-outs and returns) and AI and automation (release limits and human intervention safeguard deployment). In all five fields, SCM leads the process; depending on the field, sales, product management, procurement, operations, quality, service, finance, IT and partners are involved.

Three regulatory developments connect supply chain information, quality management and product data. They thus become part of operational control and apply role-specifically.

Since 10 January 2025, the information obligation under Art. 10a MDR/IVDR has applied. It requires manufacturers to report certain expected supply interruptions or product discontinuations where serious harm is threatened. Information is generally to be given at least six months in advance, in exceptional cases without undue delay. SCM must recognise such risks early.

Since 2 February 2026, the US QMSR has applied. The FDA incorporates ISO 13485:2016 into its requirements; US-specific provisions remain in place. For affected manufacturers, supplier and process evidence must match operational procedures.

On 28 May 2026, four EUDAMED modules become mandatory: actors, UDI/devices, notified bodies/certificates and market surveillance. The last module serves the authorities. Transition rules for existing data records remain to be checked.

From this, the whitepaper derives a clear division of roles: SCM provides volumes, coverage and expected interruptions. Regulatory affairs assesses information obligations; quality decides on quality releases. Reliable data thus becomes the prerequisite for dependable commitments: planning and order processing distinguish released from blocked goods. EUDAMED and US QMSR underline the importance of consistent data and documented processes.

Distribution and returns also need clear product data. The customer commitment covers the right product, its release status, the remaining usability and the intended service. Order processing confirms only volumes that are released for market and customer and reach the required remaining shelf life. Distribution documents batch or serial number and the relevant transport conditions. Returns are assigned to a clear cause – recall, complaint, repair or regular return – and quality assesses suitability and evidence before a decision is made on restocking, permissible reprocessing or disposal. A traceable product status prevents returned goods from re-entering supply without inspection. Expiry losses and return reasons also show where smaller lots, better planning or product changes can save resources. For cybersecurity, the paper refers to the NIST Cybersecurity Framework 2.0; systems and partners need clear protection and restart concepts.

Sales and Operations Planning (S&OP) connects sales, operations and finance. A shared plan makes conflicting goals decidable. Sales justifies the expected demand and highlights uncertainties; alongside historical consumption, tenders, procedures or the installed device base may be relevant. The team separates this expectation from the targeted revenue goal. Operations and procurement reconcile demand with material and capacity – in medical technology, sterilisation, testing and release times also count. If the deliverable volume is insufficient, the team describes concrete options: increase capacity, shift demand in time or prioritise supply according to agreed rules.

Integrated Business Planning (IBP) links volume planning more closely with portfolio, strategy and finance; finance is already part of S&OP. IBP deepens the view of earnings and capital requirements over a shared horizon, for example for product launches and additional supply buffers.

NEXERY recommends a monthly S&OP cycle per product family in five steps: first, align data and assumptions – SCM checks inventories, open orders and the last plan using uniform product and time delimitations. Second, justify expected sales – sales and product management explain demand per product family, including new products, phase-outs and uncertainties. Third, determine the deliverable volume – procurement and operations check material and capacity, quality adds sterilisation and release times. Fourth, evaluate options and financial impact – finance and the functions compare scenarios by delivery capability, earnings and capital requirements. Fifth, adopt the overall plan bindingly – management decides on priorities and resources in the executive S&OP; the decision names volumes, owners, deadlines and escalation limits.

Short-term control is handled by Sales and Operations Execution (S&OE). It deals with deviations from the adopted plan. NEXERY recommends a weekly alignment and, where needed, daily decisions. If parts are missing or releases are delayed, every measure gets a responsible person. Fundamental conflicts of goals go back to management.

Clear decision rights shorten response time. In the shared plan, sales and product management justify demand and portfolio; SCM leads the planning process, shows bottlenecks and prepares options; procurement and operations confirm a dependable supply; quality and regulatory affairs are accountable for releases and obligations; finance and management decide on resources and conflicting goals. The executive S&OP adopts plan, owners and deadlines. In case of deviations, the responsible role decides within clear limits or escalates.

The target operating model (TOM) anchors supply chain management in the company. It consists of six elements: strategy with design dimensions, processes, structure and governance, control and KPIs, resources and capabilities, and IT and systems. The strategy prioritises seven design dimensions whose requirements can be diametrically opposed depending on the design: effectiveness, efficiency, sustainability, agility, resilience, antifragility and sovereignty. Overarching is patient-appropriate delivery capability: quality and compliance secure the permissible scope of action.

Four product profiles need different delivery rules. For sterile consumables, the guiding metric is availability with sufficient remaining shelf life; planning takes shelf life and sterilisation and release times into account. For implants and instrument sets, what counts is the complete, suitable set for the procedure. For capital equipment and service, on-time delivery and recovery time come first. For IVD reagents and diagnostics, the availability of usable tests is decisive, as batch changes, temperature requirements and expiry dates limit the usable quantity.

Three model calculations show where the levers lie. An illustrative stress test assumes a usable coverage of 6 weeks and a qualified restart of 14 weeks – resulting in a supply gap of 8 weeks. A contractually named second supplier closes the gap only if it can deliver the product in qualified form at the required scale. In the model case of one product family, the theoretical production volume of 10,000 units per week falls via the technically usable production of 8,245 units (85 % availability × 97 % yield) and the qualified sterilisation capacity of 7,500 units to a released delivery volume of 7,200 units. Additional machines do not solve the limiting release; management funds measures according to their contribution to the usable delivery volume. With EUR 60 million in annual cost of sales, ten days less inventory reduce tied-up capital arithmetically from EUR 10.68 million to EUR 9.04 million – a one-off liquidity effect of around EUR 1.64 million, not an increase in earnings.

Seven KPIs connect performance with clear interventions: forecast error, delivery as promised, release lead time (median and 90th percentile), supply gap, inventory coverage, expiry and quality loss, and cost of supply. Each KPI gets a responsible role and a decision date; targets and intervention limits apply per product segment.

AI can support planners if data is correct and its use is clearly bounded. For production and QMS software, the FDA describes a risk-based assurance approach (Computer Software Assurance). The basis is a shared inventory status that supports planning decisions. The whitepaper describes three levels of automation within released rules: analyse (analyses show where demand deviates from the plan and which inventories are unlikely to be consumed in time), propose (the system compares permissible options for orders, capacity or the allocation of scarce products; responsible people evaluate them by supply, cost and risk) and execute under control (for recurring decisions, automatic execution within released rules, safeguarded by monitoring and a proven fallback path). A pilot starts with a concrete planning task, such as prioritising impending shortages. Quality and regulatory affairs retain their professional authority; for critical systems, a failure must remain manageable.

Implementation follows a 100-day roadmap in three phases. Days 1–25: the team assesses SCM maturity per TOM element based on interviews, process evidence and performance data, and defines target maturity levels and the target operating model. The result is current/target maturity levels and an approved target picture with prioritised design dimensions and clarified conflicting goals. Days 26–75: for every measure per TOM element, ownership, budget and deadline are fixed – from prioritising design dimensions and binding S&OP rules, decision rights and escalation paths to KPIs, planning roles and secured master data. Days 76–100: the team runs S&OP and operational control in a pilot, checks the effect against target values and hands over procedures and maturity reviews to the owners in regular operations. The result is an accepted model and a prioritised follow-up roadmap.

Eight decisions anchor effective SCM in the company: Which supply do we protect first? How does our shared plan come about? Which volume can we safely commit to? Which inventory can we reduce? Who decides on conflicting goals? How do we respond to deviations? Which capabilities is the team lacking? How do we measure implementation? A pilot makes the target model verifiable in daily operations. Only once shared planning and binding decisions work can the way of working be transferred deliberately to further product families.