Regulatory compliance remains the top supply chain pain point

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The most significant factors contributing to uncertainty in the healthcare supply chain are more stringent regulations and increased product protection challenges. For the third consecutive year, regulatory compliance is the top supply chain pain point, cited by 60% of respondents.

Further, 78% cite regulatory compliance and increasing regulations as a top trend driving business and supply chain changes. Product protection also is increasingly challenging in a highly global marketplace, with 46% citing product security as a top challenge and 40% citing product damage and spoilage as a top concern.

Economic factors are also at play, with 49% of those surveyed still feeling an impact from the economic downturn six years later. The highest percentage of respondents to express this are located in the US, where 60% of healthcare logistics decision makers cite economic concerns. In this global economic environment, cost management remains top-of-mind, with 44% citing it as a top supply chain concern.

Contingency planning

Despite operating in a risk-inherent environment, only 26% of healthcare executives cite contingency planning as a top supply chain concern. Meanwhile, 34% of those surveyed in Asia and 22% in Latin America say that more than one-quarter of their companies' supply chains were impacted by unplanned events in the past three to five years.

Specific challenges to addressing business continuity include events being too unlikely or infrequent (61%), back-up infrastructure being too expensive to deploy (46%) and little to no prioritisation being given to this area (42%) versus other more urgent matters.

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

Of those companies that are successful in mitigating risk and increasing competitiveness, the majority are leveraging partnerships along with ongoing technology investments. Of logistics decision makers surveyed worldwide:

• 78% cite logistics and distribution partnerships as a top strategy to manage supply chain costs;
  
• 65% use logistics and distribution partnerships to successfully access global markets;
  
• 61% use collaboration, including vested logistics and distribution partnerships, to successfully embrace new distribution and go-to-market channels, while 23% use mergers and acquisitions to do so; and
  
• 59% are working with a 3PL as a top strategy to increase efficiencies and improve competitiveness.

Again this year, investing in new technologies is a top strategy to increase efficiencies and competitiveness for the next five years. Globally, over the next three to five years, 80% of respondents say they will invest in new technologies.