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Busting myths about logistics providers

A distribution center worker prepares healthcare shipments for transportation.

A healthcare company with temperature-sensitive shipping needs can reap major benefits by working with a logistics provider that offers existing infrastructure, transportation, dedicated health care experts and solutions. But if the logistics provider doesn't deliver, the company may be turned off from even considering outsourcing again in the future.

Finding the right high-quality logistics provider that will help ship your products safely and cost-effectively isn't always easy, but the potential rewards are simply too great to ignore. Consider these five perspectives to help overcome doubts about outsourcing your temperature-sensitive supply chain:

Misconception #1: "They don't understand our operations"

You understand your healthcare products, but is your team up to speed on optimizing your packaging and shipping requirements? Does your company have monitoring and intervention capabilities that can help minimize product losses and delays? Among healthcare logistics executives surveyed in the most recent UPS®"Pain in the Chain" survey, 46 percent said regulatory requirements involving temperature-sensitive packaging are driving costs.

"Logistics executives can choose to provide their own company's infrastructure at the expense of capital," said Tom Heavrin, healthcare QA manager at UPS, "or they can simply plug and play with a logistics provider that already has all assets and expertise in place."

For many companies, it's more cost-effective to engage a logistics provider that already knows the ins and outs of the industry. Healthcare logistics experts like UPS have transportation assets, fully compliant cold-chain infrastructure and solutions in place worldwide that can help healthcare companies lower expenses.

Misconception #2: "I need to maintain control over my products"

No one can control all the variables. When weather goes wild, or infrastructure in some distant market lets you down, well-made plans can go astray. Are you prepared for the cold-chain complexities that often pop up in distant, emerging markets?

"The more diversity you have in a network, the harder it is," said Wanis Kabbaj, director of health care strategy at UPS. "Supply chains that work perfectly well in the U.S. can't be expected to work as well in markets that have different characteristics." In addition, as supply chains have grown longer and more complex, maintaining control has become more difficult. And also impractical: 48 percent of health care logistics executives surveyed said new market expansion has driven up supply chain costs.

Partnering with a world-class logistics provider makes competitive sense because it accesses experts who know how to efficiently move goods across suppliers, vendors and customers. It also offers a level of control that previously may have been lacking. Using a logistics provider like UPS, for instance, lets healthcare customers leverage a global network of storage, transportation and strategically located warehouse and distribution facilities to help preserve product quality from end-to-end.

Misconception #3: "Logistics companies over-promise and under-deliver"

You may know of colleagues who used logistics providers that claimed to have cold chain infrastructure but suffered significant failures. It's important to rigorously vet prospective transportation partners to be sure you are working with a quality service provider. Among companies that use logistics providers, 73 percent say their logistics provider gives innovative ways to improve supply chain effectiveness.

"The truth is, the combination of both an integrated network (that is owned by the logistics provider), combined with the ability to develop solutions from a virtual network is better than either option by itself," said UPS's Kabbaj. "Plus, you can utilize a single point of contact at that logistics provider to make all of these things happen, which is significantly more effective than managing multiple vendors."

Misconception #4: "Outsourcing is expensive"

Providing services that maintain quality has associated costs, to be sure. But when quality improves in other areas through the efforts of your logistics provider, total costs may be lowered. Fewer products are spoiled, supply chains operate more efficiently and overall the investment can translate into savings. In the latest UPS "Pain in the Chain" survey, nearly seven in 10 North American healthcare logistics executives identify "logistics and distribution partnerships" as a way to successfully manage costs.

Misconception #5: "Vendors don't really understand cold chain QA requirements"

If you have recurring problems along your cold chain, it's likely either that the vendor is not the right one for the job, or the challenges are so complex that the vendor's capabilities and limitations can't be accurately assessed. Either way, the experience may leave you unwilling to embrace a logistics provider -- despite the benefits.

The best approach is first to understand your needs and then identify who can work with you to deliver better results. It's worth it: 73 percent of North American healthcare executives surveyed cited "partnered with a higher quality carrier" as a strategy that reduced product damage and spoilage, meaning lower costs.

"UPS has a healthcare-dedicated QA team that can identify risks, collaborate on documented training, standard operating procedures, and contingency plans -- upgrading requirements and auditing shipments as needed," Heavrin said. "By establishing an independent healthcare-dedicated QA group at UPS, we have, in effect, provided our clients with a system they don't have to create for themselves."

Choose your partners carefully

At least 25 percent of all healthcare products today are temperature-sensitive. Cold chains are growing at twice the rate of other shipping. The rewards of seeking expert, outside help far outweigh any potential risks. Start with an analysis of your cold chain, and then choose carefully.

See why it makes sense to outsource your healthcare cold chain to UPS.

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