UPS survey: Healthcare supply chain seeing significant improvement

ATLANTA - Healthcare and life sciences logistics decision makers are realizing considerable supply chain improvement in key areas such as product security and adapting to regulatory changes, according to UPS' recently-released eighth annual "UPS Pain in the Chain" survey. More than half of executives who experienced success in these areas stated they leveraged third party logistics providers and supply chain analysis to drive their accomplishments. 

 

Healthcare products continue to become more complex and in many cases require special handling. Healthcare decision makers are recognizing the importance of selecting higher-quality carriers, faster shipping speed and in-transit intervention capabilities needed to drive success in mitigating product damage and spoilage.

 

Healthcare and life sciences logistics decision makers are seeing success addressing product security, UPS reported. Their reported success rate in this area saw a 20 percentage point jump over 2014 findings. IT-based solutions, such as bar coding and serialization, and cooperation with law enforcement, are likely to have contributed to improved product security from a visibility and criminal issues standpoint.

 

And healthcare companies are becoming more successful with regulatory compliance. This is particularly welcome, UPS noted because the industry can expect only more scrutiny, regulations and compliance burdens moving forward.

 

However, while healthcare supply chains have made gains, cost management is still a major pain point. Healthcare logistics decision makers report rapid business growth, fluctuations in fuel and raw materials costs, increasing regulations and new market expansion as the biggest challenges to managing supply chain costs. In order to address this, healthcare logisticians see the most opportunity in optimizing their transportation costs and gaining better inventory visibility. 

 

Product damage and spoilage remains a concern as products become more complex and in-transit monitoring and intervention options are underutilized. Companies are seeing success through partnerships with higher-quality shipping companies and the use of faster shipping service levels with 63% reporting success in addressing product damage and spoilage issues, but opportunities for further improvement remain.

 

Contingency planning is an area healthcare and life sciences companies may find hard to justify investments in, based on the limited and unpredictable impact of disruptions to the supply chain. Unplanned events have impacted healthcare supply chains in the last 3-5 years, but a large percentage of supply chain decision makers still do not consider the subject important.

 

One constant remains, UPS reported, as more innovative, sophisticated products enter the global market, the stakes will only get higher for healthcare companies to ensure growing consumer demands are met with innovative, sophisticated supply chains.

 

UPS has been surveying the healthcare and life sciences industry about supply chain issues since 2008. Over the years, the survey has become a popular barometer of supply chain issues for the healthcare industry.

 

The eighth UPS Pain in the Chain survey was conducted by TNS between April and June 2015. A total of 421 interviews of healthcare logistics executives were carried out in 16 countries. Fifteen separate, qualitative interviews were conducted in North America to gain further insights into trends, challenges and opportunities impacting healthcare logistics.