It seems as if everyone is talking about the latest and greatest supply chain solutions. In fact, there’s so much buzz about it that it can be a little overwhelming – kind of like all of that advice you get when you bring home a newborn baby. If you’ve been asking yourself, “What matters the most?” we have some answers for you. The latest annual UPS survey (421 interviews of executives across 16 countries) of the healthcare and life sciences supply chain highlights the biggest issues facing the industry, and those pain points are a good place to focus your attention.
1. Regulatory Compliance
Compliance with national and international regulations affects everything from employee training to transportation decisions. When UPS conducted their survey in 2014, 60% of respondents listed regulatory compliance as a top concern, and 78% reported that it was a “top trend driving business and supply chain changes.” In the 2015 survey, one respondent said that “Complying with regulations is paramount. The product has to meet our own specs, and also the specs of the ministry of health in the destination country. It’s an everyday concern for us.” That’s why supply chain management software that monitors, collects, updates, and applies regulations from all applicable nations and agencies sits at the top of our list.
2. Product Security
In the 2014 UPS survey, 46% of respondents identified product security as a top concern, and 40% cited product damage and spoilage as a major concern. The 2015 survey results indicated improvement in both areas, thanks to technological advances in IT solutions like bar coding, serialization, visible holographs, security links, thermal packaging, enhanced temperature monitoring/intervention, and improved shipping service levels. We recommend that healthcare companies that want to make a significant impact on product security invest in these and other technological solutions.
3. Cost Management
Between rising bonuses, decreasing payments, fluctuating costs of fuel and raw materials, stricter regulatory controls, technological investments (whether new or replacements for outdated technologies) and the costs inherent in rapid growth, cost management was also ranked as a top concern for the 2015 survey’s respondents. Their primary areas of focus include optimizing transportation costs, increasing supply chain visibility, and consolidating the number of transportation providers they work with. All of these can be addressed on an enterprise level with a robust supply chain solution that not only offers visibility but supplies detailed analytics and points out areas of opportunity. And investing in technologies that enhance speed and automation can have a big impact on costs at a task-specific level.
4. Auditing/Consulting Services
Everybody needs a little help now and then. Sometimes you’re just too close to things to really identify the main problems and opportunities. Other times, you can identify the problems but need help with supply chain solutions from experts who are out there every day working with the most innovative best practices. And sometimes you may need help in making your case for change – not to mention implementing that change. An audit or a brainstorming session with a good consultant could be a good place to start. If you know that you need change – and why you need it – but not where to go from there, hiring a consulting service could be one of the best investments you make.
5. Group Purchasing Organizations (GPO)
A GPO is a coalition of companies that combine their purchasing volumes to negotiate better prices and share cost savings. The end result is that small providers have access to the same prices – and the same products – as larger providers. It’s estimated that GPOs save as much as $36 billion per year in price discounts and $2 billion per year in associated labor costs. Because vendors pay the majority of administrative fees, GPOs have a very low barrier to entry and should be a top priority for any healthcare organization that isn’t already using one.
Sometimes there are so many voices shouting about so many problems, opportunities, services, and products that it’s hard to know where to look first. Based on information gathered by a wide variety of professionals experienced in the supply chain, these 5 methods make the top of the list for your next investment. If you’ve been unsure of where to start when it comes to supply chain solutions, look here first.