Supply Chain News / Risk & Compliance / Ground

Product Protection Top Healthcare Concern

August 29, 2012
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Healthcare executives around the world are investing in their supply chains as they prepare for continued global growth in an increasingly complex and dynamic environment, according to data from the fifth annual UPS “Pain in the (Supply) Chain” healthcare survey.

The top two planned investments for healthcare companies globally – as cited by 83 percent of decision-makers -- are tapping into new global markets and investing in new technologies. Survey respondents plan to employ both strategies over the next three to five years to increase their competitiveness, maintain product integrity and gain efficiencies, says the report.
The top four countries where companies will focus expansion efforts over the next three to five years are China, the United States, Brazil and India.

While planning investments, healthcare decision-makers remain “cautious” on the state of the industry. They cite as challenges a difficult economic environment, pressures to reduce costs and struggles with increasing regulations and reform.

The UPS “Pain in the (Supply) Chain” survey, conducted by TNS, reflects the views of senior-level healthcare supply chain decision makers in the pharmaceutical, biotech and medical device and supply companies in the U.S., Western Europe, Asia and Latin America.

Despite signals of investing, barriers to global expansion remain with the top barrier being country regulations, cited by 46 percent of executives. Country regulations have remained the top barrier to global expansion each of the past three years. Other barriers to expansion include intellectual property protection concerns and product quality and security concerns, cited by 33 percent and 27 percent of executives, respectively.

“Healthcare companies are feeling the pressure to expand and drive new growth while containing costs and ensuring compliance around the globe,” said Bill Hook, vice president, global strategy, UPS Healthcare Logistics. “That has only heightened the need to build more global flexibility, integration and transformation into the healthcare supply chain.”

The No. 1 specific supply chain concern is regulatory compliance, cited by 65 percent of respondents. Cost management comes in second with 60 percent citing this as their top supply chain issue. Only 41 percent report success in managing their supply chain costs. In addition to regulatory compliance and managing supply chain costs, product security and product integrity have risen to the third most cited supply chain issue, reported by 57 percent. In emerging markets, it is a more significant concern as it is ranked first or second by survey respondents.

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