Friday 28th Oct 2016 - Logistics Manager

Regulations impede progress, according to UPS poll

Stringent regulations and increased product protection challenges are impeding healthcare executives from tapping new supply chain opportunities, according to the results of a survey conducted by UPS.

The seventh annual UPS Pain in the (Supply) Chain survey polled more than 530 healthcare executives in Asia, Canada, Latin America, the US and Western Europe. For the third consecutive year, regulatory compliance was labeled as the leading detriment to supply chain progress, with a 60 per cent share of the vote. Furthermore, 78 per cent cited regulatory compliance in conjunction with increasing regulations as a leading force behind business and supply chain changes.

Dirk Van Peteghem, UPS vice president, healthcare logistics, said that further change is expected in the healthcare supply chain.

“At UPS, we work to stay ahead of evolving industry trends and develop innovative solutions for our customers based on our extensive expertise, infrastructure and best-in-class technology.”

Despite 70 per cent of respondents indicating an intention to increase use of new distribution channels over the preceding two years, their channel mix has remained the same.

According to the survey this is because: “This demonstrates that while the intention to take advantage of untapped opportunities is apparent, actual change is slow. Among the reasons for the slow shift, 68 percent say they are still building their direct channel strategies.”

Product security proved a major concern for healthcare executives, with 46 per cent citing this a top challenge, with a further 40 per cent citing damage and spoilage as another.

The impact of 2008’s financial collapse is still being felt by 49 per cent, with the US providing the highest percentage to express this (60 per cent). As a result, cost management features highly among the respondents concerns, with 44 per cent citing this as a supply chain challenge.

Over the next three to five years, 80 per cent of respondents expect to invest in new technologies.

John Menna, UPS vice president, global healthcare strategy, said: “Companies that embrace new technologies and transformative supply chain strategies to mitigate risks will be more likely to capitalize on new growth opportunities in the healthcare marketplace of tomorrow.”

Respondents in Asia and Latin America, 34 per cent and 22 per cent, respectively, said that more than one quarter of their companies’ supply chains had been affected by unplanned events in the last three to five years. And while many respondents noted that they were operating in a risk-inherent environment, only 26 per cent could claim contingency planning as a core concern.

When asked to specify challenges that affect business continuity, the unlikeliness and infrequency of events (61 per cent), the cost of deploying back-up infrastructure (46 per cent), and the lack of prioritization in this area (42 per cent) were noted.

Companies that have been successful in mitigating the risks posed to the supply chain cite partnerships (78 per cent) as a key factor behind their success. Sixty five per cent use logistics and distribution partnerships to access global markets, while 61 per cent use collaboration to embrace new distribution and got-to-market channels; 23 per cent used mergers and acquisitions to achieve this very same goal.