Healthcare companies around the world are investing in their supply chains as they prepare forcontinued global growth in an increasingly complex and dynamic environment, according to the fifth
annual UPS “Pain in the (Supply) Chain” healthcare survey.The top two planned investments for healthcare companies globally, as cited by 83 per cent ofdecision-makers, are tapping into new global markets and investing in new technologies.
Survey respondents said they plan to employ both strategies over the next three to five yearsto increase their competitiveness, maintain product integrity and gain efficiencies.
The top four countries where companies will focus expansion efforts over the next three tofive years are China, the United States, Brazil and India, the UPS study found.
However, even while planning investments, healthcare decision-makers remain “cautious” onthe state of the industry. They cite as challenges a difficult economic environment, pressuresto reduce costs and struggles with increasing regulations and reform.
The UPS “Pain in the (Supply) Chain” survey, conducted by TNS, reflects the views ofsenior-level healthcare supply chain decision makers in the pharmaceutical, biotech and medicaldevice and supply companies in the U.S., Western Europe, Asia and Latin America.
Among other findings, 46 per cent of executives said that country regulations are the topbarrier to global expansion, as they have been for each of the past three years. Other barriersinclude intellectual property protection concerns and product quality and security concerns, citedby 33 per cent and 27 per cent of executives, respectively.
“Healthcare companies are feeling the pressure to expand and drive new growth whilecontaining costs and ensuring compliance around the globe,” said Bill Hook, vice president, globalstrategy, UPS Healthcare Logistics. “That has only heightened the need to build more globalflexibility, integration and transformation into the healthcare supply chain.”
Globally, the top healthcare business concerns include increasing regulations, cited by 52per cent of executives, as well as healthcare reform and other changes in legislation, cited as aconcern by 51 per cent. Intellectual property protection ranks third on the list of topconcerns, cited by 48 per cent of respondents. Concerns around intellectual propertyprotection are highest in the U.S. and Asia.
The No. 1 specific supply chain concern is regulatory compliance, cited by 65 per cent ofrespondents. Cost management comes in second with 60 per cent citing this as their top supplychain issue. Only 41 per cent report success in managing their supply chain costs.
In addition to regulatory compliance and managing supply chain costs, product security andproduct integrity have risen to the third most cited supply chain issue, reported by 57 per cent.In emerging markets, it is a more significant concern as it is ranked first or second by surveyrespondents.
“Concerns around regulatory compliance and cost management have been constants for healthcaresupply chain decision-makers over the past five years while we’ve seen growth in concern aroundareas such as product security and product protection,” said Scott Szwast, UPS Healthcare SegmentMarketing Director. “While these areas will always be a focus in the healthcare industry, companiescan experience positive impact by examining strategies such as increased collaboration, adoptingsegment based supply chains and leveraging new innovative models and technologies.”
In addition to exploring top business and supply chain concerns, the survey probed healthcaredecision makers’ views on the economy based on what they are seeing within their owncompanies. Healthcare decision-makers in the United States were slightly less optimistic onthe economy, with 53 per cent of U.S.-based decision makers reporting they’re still feelingeconomic impacts in terms of tightened spending and other reductions. This compares to 43 percent in Latin America, 35 per cent in Western Europe and 26 per cent in Asia that are still feelingeconomic impacts.
According to UPS, global growth has been a top trend in the healthcare industry over thepast five years with companies ramping up expansion into new markets each year. With the rise ofincreasing globalization, healthcare executives have reported growing concerns around the areas ofproduct protection and intellectual property protection. Product protection concerns includeboth product security and the issue of product damage and spoilage. Concerns aroundintellectual property protection have grown every year for the past three years.
The survey’s five-year data also illustrates the “constants” in the industry that havecontinued to challenge healthcare supply chain decision makers. Concerns around cost management andregulatory compliance top the list of industry constants over the past five years.
“The five-year survey trends underscore what we are hearing from all segments of thehealthcare marketplace,” said Hook. “From industry leaders to middle market companies, healthcarecompanies are looking for ways to be more collaborative, provide integrated solutions and addresssegmentation issues around their customers. This information has been critical in continuingUPS’s success as a global leader in healthcare logistics.”
