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UPS study finds pains – and gains – in the supply chain

Lab worker writes note on sample label inside a diagnostic center

Since 2008, UPS has fielded its Pain in the (Supply) Chain healthcare survey Pain in the (Supply) Chain healthcare survey with a simple intention: understand our healthcare customers' unique needs so we could serve them better. As the survey has evolved, its findings and insights have become a critical barometer of supply chain issues for the healthcare industry.

As the data from 2015 suggest, while healthcare supply chains made tremendous headway in product security, compliance and regulation, the vitality of several other critical elements - like product damage, cost management and contingency planning - is resoundingly poor.

Here are some other key findings from the latest survey.

Strong pulse: areas of success

Healthcare and life sciences logistics decision-makers are seeing improvement in the ways product security is addressed, with 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.

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

From the European Union's Good Distribution Practice (GDP) to Brazil's strict serialization law, new regulations can be difficult to navigate. Healthcare companies, however, are adapting well to change, with success in addressing regulatory compliance, boasting a 13 percentage point increase from 2014.

Healthcare companies have achieved success using logistics and distribution partnerships as a strategy to address supply chain challenges associated with regulatory compliance, product damage and spoilage, and cost management.

Stable pulse: areas of progress

Product damage and spoilage remain 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. Roughly 63 percent of respondents report success in addressing product damage and spoilage issues, but opportunities for further improvement remain.

Weak pulse: areas needing attention

Cost management is still a substantial supply chain issue, although the level of concern is declining year-over-year. 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.

Contingency planning is an area that healthcare and life sciences companies may find hard to justify investment in, based on the limited and unpredictable impact of disruptions to the supply chain. Unplanned events have impacted healthcare supply chains in the past three to five years, but 40 percent of supply chain decision-makers still do not consider the subject important.

To read more insights from the 2015 survey, download the snapshot here.

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