5 Factors for Choosing a Vertically Integrated Med Device Partner

The medical device manufacturing landscape is rapidly evolving as OEMs strive to bring groundbreaking innovations to market while contending with complex challenges – including supply chain disruptions and rising material, equipment, and labor costs. To overcome these obstacles, many OEMs are partnering with vertically integrated suppliers that streamline operations and reduce expenses.

But vertical integration is being redefined. While a good partner can help reduce costs, a great vertically integrated partner delivers value at every stage of the manufacturing process, from design to distribution.

Indeed, the partner you choose influences far more than cost, dictating capabilities, quality, efficiency, time to market, and overall success. Here are five factors to consider when choosing a vertically integrated contract development and manufacturing organization.

The Evolution of Vertical Integration: Capabilities vs. Cost-Cutting

Vertical integration is no longer just about cutting costs. Discover how forward-thinking medical device OEMs are leveraging vertically integrated partners to drive innovation, improve efficiency and quality, and accelerate time to market.

1. Expanded Capabilities

Modern vertical integration is less about cutting costs and more about enhancing capabilities. The best suppliers don’t merely execute existing designs – they collaborate with OEMs to solve complex challenges with innovative medical device manufacturing solutions that improve both processes and products.

Automation, subassemblies, and customizations are examples of expanded capabilities that can increase yield while enhancing quality. A common misconception is that customization always means higher costs, but in many cases, strategic customization reduces costs, as illustrated in the example below. When OEMs fully leverage supplier capabilities, vertical integration becomes a true market differentiator that lends a competitive advantage.

2. Design For Manufacturing (DFM) Expertise

A high-value vertically integrated supplier is much more than just a medical device contract manufacturer. It’s a co-creator, lending deep Design for Manufacturing (DFM) expertise and engineering insights to refine designs, optimize production, and ensure reliability – often at significantly reduced costs.

For example, an OEM engaged Intricon to manufacture a novel EM tracking device for orthopedic and neurosurgical applications. Early in the process, we identified design inefficiencies that would escalate costs, diminish quality, and compromise performance. In just three weeks, our in-house engineering team delivered an improved solution that cut production costs by 50% (view the case study).

While many contract manufacturing organizations would have simply built the device to spec, Intricon leveraged its DFM expertise and advanced capabilities to help our partner bring a more competitive product to market at significantly lower costs.

3. Project Management

The traditional notion of a “single source supplier” – one that performs every manufacturing function under one roof – is becoming outdated in today’s increasingly complex medical device landscape. A high-value vertically integrated partner goes beyond internal capabilities, serving as a central orchestrator that coordinates materials, processes, and supply chain logistics to ensure a seamless, end-to-end production process.

This modern approach to vertical integration – where partners serve as project managers – streamlines medical device product development for OEMs while increasing control, accelerating timelines, and improving quality outcomes, often at a lower cost.

4. Nearshoring & Scalability

A well-managed vertically integrated supplier enables OEMs to scale efficiently without compromising quality or performance. In some cases, that means collaborating with third-party vendors; in others, it means drawing on internal resources to help OEMs scale while maintaining quality and budgets.

For example, in Summer 2025, Intricon will open a new facility in Costa Rica that will provide OEMs with cost-effective medical manufacturing while maintaining access to stateside engineering expertise.

Nearshoring and scalable operations give OEMs the agility to meet demand throughout the product lifecycle – without inflating budgets.

5. Regulatory Support

Lengthy FDA approval processes can delay the launch of innovative medical devices by months – or even years. That’s why OEMs must avoid introducing complexities that could hamper regulatory approval, especially when delays give competitors the opportunity to capture market share before others can gain a foothold.

An experienced vertically integrated partner can help OEMs navigate regulatory hurdles through robust documentation and a deep understanding of compliance requirements – especially if that partner specializes in the medical space. At Intricon, for example, the medical industry is our sole focus, uniquely positioning us to provide regulatory support that mitigates risk, streamlines the approval process, and accelerates time to market.

The most valuable vertically integrated partners aren’t just manufacturers, they’re strategic allies. They reduce risk, drive innovation, and help OEMs bring better products to market faster – often at reduced costs.