Supply chain costs are a key issue of concern for healthcare companies along with internationallegal issues, according to a UPS survey.
The UPS 2008 “Pain in the (Supply) Chain” survey found that regulatory concerns ranked as No. 1business issue for larger companies. Evolving compliance legislation is a concern for healthcarecompanies in an increasingly global marketplace in which companies must navigate various regulatorycompliance laws across new territories.
However, managing and containing supply chain cost pressures were also ranked as a significantconcern, UPS said in a statement. Sixty percent of companies reported they were “very concerned” or“extremely concerned” about the potential impact of supply chain costs on their business.
“Managing supply chain costs will only become more critical as healthcare supply chains continueto expand and evolve,” said Bill Hook, Vice President for Healthcare Logistics at UPS. “It’s abalancing act for companies to take advantage of new opportunities amidst market pressures, anincreasingly complex regulatory environment and elongated supply chains.”
The survey also found “global market access” emerging as the area companies need the most helpaddressing. Global market access is a major focus area for healthcare companies seeking to takeadvantage of lower-cost sourcing opportunities and penetrate fast growing, emerging consumermarkets.
“Capitalizing on new global market opportunities amidst an increasingly competitive industrylandscape requires changes in supply chain and business strategies,” explained Hook. “It’s crucialthat companies have the supply chain flexibility to respond to changing market conditions in orderto capture new market share and navigate the many complexities associated with global marketaccess.”
The study found that future trends point to new business directions during the coming 1-2 years.Among the immediate changes, companies plan to expand in first place their distribution channelsand they expect to change their distribution channels to work more with third-party logisticsproviders.
Despite the concerns about managing supply chain costs, companies also plan to increase theirsupply chain spending. In the next 18 months, 60% expect supply chain spending as a percentage oftotal sales to increase by 23%. Among the companies with $1 billion and higher revenues, 42% expectincreases in their supply chain spending over the same time period.
Conducted by Harris Interactive, the survey was a two-part study which started in a first phasewith an in-depth phone survey of supply chain decisions makers of more than 300 small companiesfrom the pharmaceutical, medical device and biotech industries. In a second phase, largerhealthcare companies from the same sectors were conducted.
