By Jay Tavakolian, Operations Program Director, Forj Medical
Vertical integration has become one of the most frequently used phrases in medical device manufacturing. Visit the website of almost any contract development and manufacturing organization (CDMO), and you're likely to see the term featured in marketing copy.
But what does vertical integration actually mean?
More importantly, how can medical device OEMs tell the difference between a marketing message and a truly integrated operating model that delivers specific valuable outcomes?
Those questions matter because today's medical devices are becoming increasingly complex and there’s a lot on the line when commercializing these innovations. Products that once required only a handful of components now combine sophisticated electronics, software, sensors, molded plastics, automation, connectivity, and highly regulated manufacturing processes. At the same time, OEMs face mounting pressure to accelerate development timelines, reduce supply chain risk, and bring products to market faster.
Given this, vertical integration is no longer simply about offering more services. It's about how effectively a manufacturing partner can manage the entire development, production, and delivery journey -- from concept to commercialization.
The easiest way to recognize true vertical integration is to follow the product. How many times does it leave one supplier and move to another? How many handoffs occur between design, manufacturing, testing, assembly, packaging, and distribution? And how many organizations share responsibility for the final outcome?
The fewer transitions required, the greater the opportunity to improve communication, reduce risk, shorten timelines, and create accountability. That's why more OEMs are looking beyond traditional supplier relationships and evaluating how deeply integrated their manufacturing partners truly are.
The traditional development and manufacturing model often involves multiple specialized suppliers, each responsible for a different piece of the product lifecycle. One company might design tooling, another mold components, a third assemble electronics, and yet another handle final assembly and packaging. The fragmentation can create numerous transition points that introduce lost-in-translation gaps, delays, and quality issues...adding costs and time. Increasingly, OEMs are looking for ways to simplify that process.
Consolidating more of those activities within fewer -- ideally one -- manufacturing partner creates one of the most significant benefits of vertical integration: accountability. Engineering, manufacturing, quality, supply chain, and program management teams can work together to take a device from concept through production and ultimately to delivery of the finished products.
That collaboration creates advantages early in development. Design engineers can make better decisions when they have a view into manufacturing realities. Production engineers can identify opportunities to improve manufacturability before designs are finalized. Quality and supply chain teams can proactively address potential risks before they become expensive setbacks.
A vertically integrated model can eliminate what many in the industry call the "scale cliff" --the point where a successful prototype struggles to become a commercially viable product.
True vertical integration extends beyond product development and manufacturing. In its most mature form, it encompasses the entire product journey, from tooling and automation through molding, electronics assembly, testing, final assembly, packaging, labeling, sterilization coordination, and ultimately shipment to clinicians, patients, or distribution centers. Every additional handoff removed from that process can reduce risks.
For startups and emerging growth medtech companies, an integrated development path can help them move faster, preserve capital, and focus internal resources on clinical, regulatory, and commercial milestones rather than coordinating a network of suppliers.
For large OEMs, where supplier consolidation has become a major strategic priority, managing fewer vendor-partners can reduce administrative burden, simplify audits, and improve coordination.
Vertical integration also plays an increasingly important role in supply chain resilience. Recent years have highlighted the vulnerability of complex global supply networks. Integrated organizations, particularly those with supply and manufacturing operations across multiple geographies, often have greater flexibility to respond to shortages, quality issues, geopolitical changes, and shifting customer demands.
Another often overlooked benefit is speed. In medical technology, time to market can directly affect market share, competitive positioning, and patient outcomes. When integrated teams operate within a connected ecosystem, programs can move more efficiently.
Minnesota's Medical Alley ecosystem is uniquely positioned to support this evolution. Our region offers one of the deepest concentrations of medical device engineering talent in the world, along with a culture of collaboration that enables rapid innovation. Companies can leverage vertical integration in their own backyard.
At Forj Medical, we've seen firsthand how integrated engineering, manufacturing, and program management helps customers accelerate development and reduce risk. As devices become more sophisticated and development timelines continue to compress, OEMs increasingly need partners who can bridge the gap between innovation and scale. Vertical integration is about creating fewer barriers between great ideas and successful products.
Jay Tavakolian is Operations Program Director at Forj Medical, a vertically integrated contract design and manufacturing organization (CDMO) serving the medical technology industry. Forj Medical offers end-to-end capabilities — from concept through commercial scale — in system design, microelectronics, precision molding, and advanced manufacturing. Headquartered in Minnesota with operations in Singapore, Indonesia, and Costa Rica, Forj Medical partners with leading OEMs to accelerate innovation across key segments including diabetes care, advanced optics, surgical energy, vascular disease, drug delivery, and surgical navigation.
