UPS release fourth annual 'Pain in the (Supply) Chain' survey

Pharmaceutical CommercePharmaceutical Commerce - July/August 2011

Asian companies are expanding out from region faster than other countries are moving in

UPS’ annual survey of healthcare logistics trends has been expanded to a global base of respondents for the first time, and one of the surprising findings is that supply chain executives based in Asia are more aggressive in globalizing than US executives looking to expand in that region. Both are at higher-than-average levels: 58% of US executives say that they have expanded globally in the past 18 months; but 75% of Asian executives have done so. Around the world, healthcare executives’ No. 1 concern is governmental reform and regulation of healthcare, with legislation (presumably for reimbursement) as the dominant potential barrier, and changing customs practices, manufacturing guidelines and distribution guidelines as lesser factors.

The survey also finds that healthcare executives are more willing to invest in new supply chain technology; 72% have done so in the past 18 months, and 86% plan to do so in the next 3-5 years. “What we see in this is that supply chain management has moved from an operational concern to one of strategic importance,” comments John Menna, managing director at UPS Healthcare Logistics. “Companies want to acquire new revenue streams by globalizing, and they want to do that quickly and ahead of their competitors.”

Product integrity and quality

In looking at three-year data, the survey shows that product security and prevention of damage or spoilage has jumped from the 20-30% range in past years to the 50-60% range in 2011; product security is a concern for 61% of respondents. That concern goes hand in hand with a greater reliance on service providers; the survey shows that 59% of respondents have increased their use of new distribution models in the past 18months, but 77% plan to do so in the next 3-5 years. High on the list of planned changes is an increased use of direct shipments to providers and retailers, which was cited by 22% of respondents.

The survey was conducted by a third-party provider on behalf of UPS, reacing approximately 250 companies in the US, Europe and Asia; qualified respondents were senior-level executives responsible for supply chain and logistics in the pharmaceutical, medical device and biotech industries. It is available at the UPS corporate website.

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