Oliver Norman, chief revenue officer at Nomia, highlights why medical device manufacturers need clearer oversight of smaller suppliers sitting outside their main procurement programmes.
Oliver Norman, chief revenue officer at Nomia
Medical device manufacturers devote significant resources to managing their most important suppliers, with critical component providers, contract manufacturers and sterilisation partners usually covered by formal qualification processes, quality agreements and performance reviews. Yet many smaller suppliers sit outside these controls, even when their work affects regulated operations.
Often grouped under the term tail spend, these suppliers provide lower value and occasional purchases across calibration, maintenance, laboratory consumables, tooling, temporary labour, facilities, software, testing and engineering support. Each purchase may appear minor, but the category can involve hundreds or thousands of suppliers across several sites and functions.
Spend alone is therefore a poor measure of a supplier’s importance. A small calibration company can affect the accuracy of inspection equipment, while a software provider may access quality data or validated systems. Maintenance contractors can work inside controlled production areas, while specialist laboratories may support verification or validation.
As medical device development moves faster and supply chains become more complex, manufacturers also need specialist suppliers that can respond quickly as technical, testing and production needs change. Building and maintaining this network across tail spend takes time and resources, making it harder to balance speed, price, quality and compliance. Poor supplier data adds to the pressure by slowing onboarding, limiting access to qualified providers and making it harder to respond when a supplier fails.
Tail spend is a supplier governance issue
Although tail spend is often treated as a procurement efficiency problem because it creates large volumes of invoices, contracts and onboarding requests, fragmented purchasing can leave gaps in oversight across quality, regulatory, finance, engineering and operations.
Much of the information about smaller suppliers is spread across enterprise systems, spreadsheets, shared drives and emails. Procurement may hold contracts and pricing data, while quality teams keep audit records and certificates elsewhere. Engineering teams may understand how a supplier supports a production line, although this context does not always reach the central record.
The picture becomes more complicated when different sites use the same supplier under different names or arrange similar services on different terms. Some suppliers are approved locally without wider visibility, while others repeat onboarding because teams cannot see that they already work with the organisation.
As a result, expired certificates, missing agreements and inconsistent qualification standards can remain hidden until an audit, investigation or production interruption. Teams may then have to reconstruct decisions from several systems, making it difficult to explain who approved a supplier, what evidence was reviewed and when the relationship was last assessed.
Create one reliable supplier record
Bringing this information together in one consistent supplier record gives procurement, quality and operational teams a shared view of tail spend. The process can then reflect the work performed and the level of risk, instead of applying the same controls to every supplier.
For that record to be useful, it should cover the supplier’s identity, ownership, location, services, spend, contracts and the sites or functions supported. Qualification status, certificates, quality agreements, audit results, incidents, corrective actions, performance and review dates should sit alongside information about access to quality data, validated systems, production equipment or controlled areas.
With this context available, manufacturers can assess suppliers according to their work rather than their financial value. A company providing office furniture will usually require fewer checks than a contractor maintaining cleanroom equipment, while a low value supplier may still need detailed review if its work could affect product quality, patient safety or compliance.
A proportionate assessment should consider intended use, product impact, data access, location, substitutability and the effect of disruption. Straightforward purchases can move through the process more quickly, while quality and regulatory resources are directed towards suppliers that need closer review.
Maintaining that record matters because supplier risk can change after onboarding. A vendor may start with a limited project before gaining access to more sites or production activities, while changes in ownership, performance or certification can affect the oversight required. Keeping the information current helps ensure that controls continue to reflect the supplier’s role.
Use automation with human oversight
Given the number of suppliers, records and frequent changes involved, tail spend is difficult to manage manually. Artificial intelligence (AI) can help match duplicate supplier names, classify spend and extract information from certificates, contracts and onboarding documents.
It can also flag missing information, monitor expiry dates and route suppliers through approval processes based on agreed criteria. Unusual transactions or changes in activity can be identified for review, reducing administrative work and shortening onboarding times.
Even with these capabilities, supplier decisions still require human judgement because documents and transaction data rarely provide the full context. The same maintenance service may carry little risk in an office and much greater risk inside a validated production area. A certificate may cover the wrong activity or location, while changing a supplier may require lengthy revalidation.
For this reason, procurement, quality, regulatory, engineering, cybersecurity and operational specialists need to set the rules, review exceptions and remain responsible for decisions. Systems should give clear reasons for classifications and alerts so teams can assess the supporting evidence.
Improve resilience, cost control and reporting
Once supplier information is consistent, manufacturers can see which sites depend on a contractor, where only one provider can deliver a service and which suppliers would be difficult to replace at short notice. This gives teams a clearer basis for continuity planning around suppliers whose failure could stop production, delay product release or affect quality records.
The same view can reveal duplicate suppliers and differences in pricing or contract terms across sites. Similar services may be consolidated with approved providers where this makes operational sense, although manufacturers should avoid depending too heavily on one company. Clearer records make approved suppliers easier to find, reducing local workarounds and repeated onboarding.
A reliable supplier view can also improve environmental reporting. Supplier names, categories, locations and transactions are often stored in different formats, making Scope 3 emissions harder to calculate and explain. Bringing this information together provides a stronger foundation for collecting environmental data and documenting how estimates were produced.
Where direct emissions figures are unavailable, consistent spend and category information can support estimates, while automated requests can help gather data from many suppliers. Smaller suppliers may lack detailed emissions information, particularly during the early stages of a reporting programme, so manufacturers need a repeatable process that records assumptions and addresses the most important gaps over time.
Bring tail suppliers into normal quality controls
For medical device companies, the aim is to understand when a supplier’s work can affect quality, safety, data integrity or product availability, then apply controls that match the risk. Every small supplier does not require the same level of attention as a strategic partner, but each relationship needs enough oversight for the work involved.
A practical starting point is to compare finance, procurement and quality records to create a clear view of the supplier base. Manufacturers can then resolve duplicate identities, agree common risk categories and assign responsibility for onboarding, approval and review.
Testing the approach within one site or purchasing category can show how well it works before wider use. Onboarding time, documentation completeness, exceptions and supplier performance can help teams judge whether the process is improving control without causing unnecessary delays.
As regulatory requirements and supply chain pressures change, tail spend cannot remain an overlooked part of medical device operations. Better data helps manufacturers make consistent decisions, respond faster to problems and focus resources on the suppliers carrying the most risk. This reduces the chance that a small and poorly understood supplier causes a much larger quality or production issue.
“How better tail spend data can strengthen medical device compliance” was originally created and published by Medical Device Network, a GlobalData owned brand.
