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Investments Planned in Areas Such as Technology Amid Growing Concerns over Product Protection, Global Regulatory EnvironmentMISSISSAUGA, ON,
Sept. 17, 2013 /CNW/ - Changing regulatory environments, new customer demands around the globe, challenges around product security and increasingly complex products are driving healthcare executives to make strategic supply chain investments, according to findings from the sixth annual UPS "Pain in the (Supply) Chain" healthcare survey, conducted by TNS. New technology investments and go-to-market models are top of mind as healthcare executives drive business and logistics transformations to meet evolving industry needs.
Over the next five years, 84 per cent of global healthcare executives surveyed will invest in new technologies, 78 per cent will enter new global markets and 70 per cent will implement new distribution channels such as going direct to providers, retailers and even end-patients. In addition, 59 per cent will increase reliance on third-party logistics partners. Together, these strategies indicate a move toward transformation in the healthcare supply chain.
Technology investments, in particular, signal growing concerns over product protection, which includes the security of high-value shipments and product spoilage, with large jumps in the number of executives planning to invest over the next three to five years in systems that support e-pedigree/ serialization, temperature-sensitive and product security solutions.
For the first time since the survey's inception in 2008, product security surpassed cost management as the second supply chain concern with 53 per cent of executives citing it as a top issue. Executives face challenges in product security with the top concern being increasing counterfeit sophistication at 48 per cent, followed by poor supply chain visibility, with 40 per cent citing it as an issue.
Despite investment plans, concerns over the global economy and healthcare business landscape continue. Globally, 50 per cent are still feeling the impacts of the economic downturn, and 60 per cent in the U.S. are reporting continued impacts. Executives in
Asia express the most optimism on the economy with only 31 per cent reporting they are still feeling the effects.
From a future global business challenge standpoint, increasing regulations are the top concern, as reported by 48 per cent of respondents. Concerns over healthcare reform and legislation closely follow at 46 per cent, and 40 per cent of executives worldwide are also worried about intellectual property protection. Executives in
Asia are more worried than their peers about increasing competition at 51 per cent and patent expirations at 41 per cent.
"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, global strategy, UPS Healthcare Logistics. "These trends have also been shaping UPS's solutions to ensure we remain the logistics provider of choice for the healthcare industry. As the industry shifts to meet new customer and market demands, executives are investing in transformative supply chain strategies and strategic partnerships that will help them achieve long-term business goals."
Regulations and cost top concerns for executives in North America
The supply chain concerns keeping North American executives up at night relate to regulations and cost management. Sixty per cent cite cost management as a top supply chain concern, a higher percentage than their peers around the world. Regulatory compliance is also a top concern for 66 per cent of logistics executives in
North America, and is the top barrier to global expansion for North American healthcare executives. Despite the high level of concern, executives there are successfully addressing issues there in a variety of ways, ranging from performing supply chain optimization analyses to investing in logistics partnerships.
Top global supply chain pain points
The number one supply chain concern globally continues to be regulatory compliance, cited by 63 per cent as a challenge. Navigating country regulations are also the top barrier to global expansion, cited by 47 per cent of those surveyed. As noted above, product security is the number two supply chain concern, followed by cost management, with 53 per cent and 51 per cent of executives respectively citing these as issues.