Healthcare sector tackling supply chain concerns

16 December 2015

Logistics decision makers in the healthcare sector have made significant progress in tackling their biggest supply chain concerns, according to a study.

This year’s UPS Pain in the (Supply) Chain survey found that product security, regulatory compliance, product damage and cost management remained the most prominent supply chain concerns among healthcare logistics executives in North America, Europe, Asia Pacific and Latin America.

However, it said 75 per cent of respondents reported that investments in barcoding and serialisation, and cooperation with law enforcement agencies, were proving successful in addressing product security. This is compared with 55 per cent last year.

The number of respondents reporting success with addressing regulatory compliance rose from 57 per cent last year to 70 per cent this year, with local third-party logistics provider partnerships cited as the top strategy to deal with this.

Physical protection from theft, poor supply chain visibility and too many links in the supply chain are the biggest product security challenges, according to the study. But 63 per cent of respondents said they had success in addressing these issues, compared to 51 per cent in 2014.

Only half of respondents reported success addressing supply chain cost management although this was up from 38 per cent the previous year. Rapid business growth was cited as the biggest challenge to managing costs, cited by 56 per cent. This was closely followed by fluctuating costs of fuel and raw materials.

Cost management was still a “major pain point”, the report concluded. Optimising transport costs was seen as the biggest opportunity to reduce supply chain costs, followed by better inventory visibility and consolidating the number of transport providers. Next was IT investment and consolidating existing product supply chains.

But the report found that only 60 per cent of respondents ranked contingency planning as important. It concluded lower levels of concern were likely to be because of the limited and unpredictable impact of disruptions to the supply chain.

The survey involved 437 interviews with healthcare logistics executives across 16 countries.

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