Over the next five years, the global health-care industry plans to invest in new technology, enter new global markets, implement new distribution channels, and increase reliance on third-party logistics partners, according to findings from the sixth annual health-care survey conducted by United Parcel Service (UPS).
These measures are being undertaken by industry players in response to changing regulatory environments, new customer demands around the globe, product security challenges, and increasingly complex products, noted the UPS survey titled, “Pain in the (Supply) Chain.”
“New technology investments and go-to-market models are top of mind as health-care executives drive business and logistics transformations to meet evolving industry needs,” it said.
Most of the technology investments will be slanted toward product protection, cited as the second top supply-chain concern by the surveyed. A growing number of executives said they plan to invest over the next three to five years in systems that support e-pedigree/serialization, temperature-sensitive, and product security solutions.
These investments aim to address the need to secure high-value shipments, prevent product spoilage, thwart increasing counterfeit sophistication, and improve supply chain visibility.
The leading supply chain concern globally continues to be regulatory compliance, seen as the top barrier to global expansion and addressed by investing in logistics partnerships, among others.
Other major challenges raised in the poll concern health-care reform and legislation as well as intellectual property protection.
“Healthcare companies are balancing a number of priorities related to capturing business growth opportunities in new markets, protecting increasingly sophisticated and high-value products, and navigating a complex regulatory environment worldwide,” said Bill Hook, vice president of global strategy, UPS Healthcare Logistics.
Regional differences in top challenges and issues also emerged. For Asian health-care executives, product protection is the number one supply chain concern. Product damage and spoilage is also a larger issue in Asia versus other areas of the world. Executives in Asia are also more worried about increasing competition and patent expirations.
In Western Europe, the economic downturn continues to be top of mind, with nearly half in the region reporting continued impacts for their companies. Despite economic challenges, company health-care officials are still planning supply chain investments in technology and new distribution models.
Major supply chain concerns for North American executives relate to regulations and cost management.
“Globally, we are seeing consistency in the top supply chain pain points year over year,” said Robin Hooker, director of global strategy at UPS Healthcare Logistics. He predicts rising concern over regulatory compliance and product protection as supply chains grow longer and more complex.
“The good news is that executives are seeing success in addressing these issues through increasingly sophisticated technology solutions, accessing regulatory expertise, and forming strategic partnerships with third-party logistics providers,” he added.