For medical device companies, choosing the right location for a manufacturing facility is one of the most significant decisions a company will make — one that affects long-term profitability, operational efficiency, and resilience. These decisions are typically elevated to the board of directors for approval and undergo thorough scrutiny to ensure capital is strategically placed. A well-situated manufacturing operation can reduce the cost of goods sold and improve financial performance.

Often, companies must determine whether to invest in a location close to existing operations or pursue a new site that offers lower structural costs and acceptable risk. Making this determination requires a detailed assessment of financial, operational, risk-related, and implementation factors. This process often involves subject matter experts from across the organization, each bringing insight into different facets of the business.

Understanding the Financial Stakes

The financial impact of site selection is significant. The right choice can save a MedTech company hundreds of millions in recurring operating costs. For most firms, labor and transportation costs — which vary widely by geography — make up the largest operational expenses. Balancing those two elements within the broader context of total operational costs can unlock stronger financial performance and lead to a globally competitive cost structure.

For example, a U.S.-based facility with 500 employees might incur $30 million in annual labor costs. In comparison, a similar operation in Mexico might only cost $7 million in labor — and even less in Southeast Asia, according to JLL. These apparent savings, however, must be weighed against higher logistics costs, supply chain vulnerabilities, compliance risks, and potential tariffs. That’s why it is essential to base decisions on accurate assumptions, credible data, and scenario-driven modeling that can reveal the impact of risk and volatility over time.

Location Strategy as a Business Strategy

Choosing a site for MedTech manufacturing isn’t simply a matter of finding the lowest-cost option. A successful location strategy must support broader business goals, including regulatory compliance, supply chain efficiency, sourcing, customer alignment, safety, and risk mitigation — all while positioning the company for long-term scalability and asset deployment.

Key criteria that inform location choices often include the potential for revenue growth, exposure to political and economic risks, supply chain and logistics performance, labor access and retention, tax and legal considerations, real estate suitability, utility availability, and the regulatory environment. Each of these inputs plays a role in shaping a decision that should ultimately strengthen the business’s competitive position. When done well, location selection helps future-proof operations.

How to Build a Structured, Effective Site Selection Process

An effective location strategy is not ad hoc. It follows a structured, multi-phase process that aligns with both financial goals and operational needs. It begins by clarifying core business objectives and defining how success will be measured. From there, companies build out a data-driven analysis using advanced analytics, market intelligence, and scenario modeling to evaluate competing locations. But raw data isn’t enough — field research is essential to validate findings, inspect candidate sites, and develop practical risk-reduction strategies.

Armed with these insights, companies can move to negotiations, pursuing optimal agreements around real estate, labor, utilities, and incentives. Finally, they shift into implementation, budgeting adequate time for mission-critical activities and executing against a clear plan. This structured methodology ensures the company evaluates potential sites across financial, operational, and strategic dimensions — not just spreadsheets.

Risk is No Longer a Footnote — It's a Driver

Risk assessment has grown more urgent and complex. Inflation, geopolitical uncertainty, cross-border tariff shifts, climate disruptions, and sustainability mandates have all elevated the importance of long-term resilience. Since the pandemic, many MedTech companies have reconfigured supplier networks, revisited legacy sites, and shifted their geographic strategies to prioritize business continuity.

Additionally, climate change has introduced new forms of operational risk. Flooding, hurricanes, droughts, wildfires, and other environmental disruptions now factor heavily into siting decisions — especially for manufacturers with water-intensive or environmentally sensitive operations. These pressures have made location strategy not only a financial decision but also a critical component of corporate risk management.

Labor Is a Top Priority — But It’s About More Than Cost

Labor remains front and center in any site evaluation. But beyond cost, companies must consider labor availability, skill alignment, long-term sustainability, and overall workforce dynamics. MedTech facilities depend on specialized workers with experience in precision machining, grinding, polishing, molding, and other intricate production processes.

In the U.S., metropolitan areas like those in California, Utah, Minnesota, Pennsylvania, New York, and New Jersey host the largest MedTech labor pools. But companies should also consider labor concentration — where a community’s MedTech workforce represents a disproportionate share of local employment. These locations often provide a more resilient talent pipeline, particularly in smaller cities with large manufacturing employers already in place.

The Growing Power of Data

Modern site selection relies increasingly on data — not just traditional market data but sophisticated models that incorporate AI and predictive analytics. Geographic modeling tools help companies visualize everything from workforce clusters to logistics efficiency. Meanwhile, labor market analytics can uncover talent-rich regions, while predictive supply chain tools can flag potential bottlenecks or disruptions.

In parallel, companies are using real-time data to assess energy constraints and real estate availability. This enables faster analysis and more confident decisions. As these tools continue to evolve, they will increasingly define the speed and accuracy with which companies pursue growth.

What Companies Should Be Asking

MedTech firms that take a comprehensive, risk-aware, and labor-smart approach to location strategy will be better positioned for long-term success. To guide internal decision-making, five key questions should shape the process:

First, does the selected location align with the company’s long-term business goals and operating model? Second, is the evaluation framework structured to capture all critical variables, including risk and labor? Third, are the assumptions driving the analysis sound — and tailored to specific geographic and economic contexts? Fourth, have potential risks been fully analyzed, from geopolitical instability and climate events to regulatory uncertainty and supply chain disruption? And finally, does the location provide a reliable and sustainable supply of qualified labor, with the ability to attract and replenish talent through local training and education infrastructure?

A smart location strategy today will position MedTech companies for stronger financial performance, greater resilience, and more agile growth in the years ahead. When the process is structured with rigor and vision, the right site can support the business for decades to come.