Healthcare executives around the world are investing in their supply chains as they prepare for continued global growth in an increasingly complex and dynamic market, even though they also continue to worry about increasing regulations, according to the results of a new survey.
The UPS “Pain in the (Supply) Chain” survey, conducted by TNS, polled approximately 375 senior-level healthcare supply chain decision makers in the pharmaceutical, biotech, and medical device and supply companies. Those companies are spread across the U.S., Western Europe, Asia, and Latin America.
In recent years, a key trend in the healthcare industry has been increasing global growth as companies ramp up expansion into new markets each year. Not surprisingly then, the top two planned investments for healthcare companies globally—as cited by 83 percent of the decision-makers—are tapping into new global markets and investing in new technologies. Survey respondents plan to use both strategies over the next three to five years as the means to increase their competitiveness, maintain product integrity, and gain efficiencies. 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 the companies do plan on investing in their supply chains, they also are “cautious.” That comes with good reason. The top supply chain concern is regulatory compliance, cited by 65 percent of respondents. Furthermore, barriers to global expansion remain significant, with the top barrier being country regulations (cited by 46 percent of the executives). Country regulations have remained the top barrier to global expansion each of the past three years.
Cost management, cited by 60 percent of the survey participants, is the second key supply chain concern. Interestingly, only 41 percent of the executives report success in managing their supply chain costs.
Healthcare companies feel the pressure to expand and drive new growth while containing costs and ensure compliance, says 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.
With the rise of increasing globalization, healthcare executives have reported growing concerns around the areas of product protection and intellectual property protection. That’s why intellectual property protection now ranks third on the list of top concerns, as cited by 48 percent of the respondents. Concerns around intellectual property protection are highest in the U.S. and Asia.
I was surprised to see that while only 13 percent of the survey respondents cited product security and product integrity as a concern in the 2008 survey, the number had rapidly climbed to 61 percent by 2011, and now dipped slightly to being cited by 57 percent of the healthcare executives. It is the third most cited supply chain issue overall. In emerging markets, however, it is a more significant concern, and is ranked first or second by survey respondents.
Concerns around regulatory compliance and cost management have been constants for healthcare supply chain decision-makers over the past five years while we’ve seen growth in concern around areas such as product security and product protection, says Scott Szwast, UPS Healthcare Segment Marketing Director. While these areas will always be a focus in the healthcare industry, companies can experience positive impact by examining strategies such as increased collaboration, adopting segment based supply chains, and leveraging new innovative models and technologies.
If your company is in the pharmaceutical, biotech, or medical device and supply industry, do these survey findings mirror your own concerns? If not, what are your key concerns and challenges?