In summer 2022, UPS Healthcare released the results of Vital Signs, a survey assessing where decision-makers in healthcare see the industry now. The survey engaged 600 director-level and above healthcare supply chain and logistics professionals in North America, Europe, the Middle East, Africa, and Asia-Pacific.
In three important segments – pharmaceuticals, laboratories, and medical device manufacturing – distinct post-pandemic priorities have emerged. Overall, end-to-end supply chain connectivity is in demand. Cold chains will be more and more vital to success ... along with real-time temperature monitoring. And, holistic logistics driven by technology will be in demand.
These priorities can be broadly summarized in three categories:
- Adaptability. Logistics decision-makers express a need for efficient services. Customers are more demanding than ever, their expectations trending toward same-day or next-day delivery. They're not looking for efficiency alone, but seek logistics partners that can efficiently and quickly adapt, real-time, to changing circumstances ... and ensure on-time delivery.
- Visibility. Healthcare firms fully expect today's logistics partners to give them real-time visibility with intuitive dashboards, interfaces, and other solutions. But COVID brought a new expectation – firms also want visibility into the condition and state of their shipments. In an age when life-saving medicines swell complex networks, logistics partners must be able to employ smart packaging, internet-of-things sensors, and other data-collecting technologies to enhance the customer experience.
- Scalability. Firms will value logistics partners who help them reliably scale their operations, automate processes, and enable them to meet or exceed customer and patient expectations.
"In a post-pandemic world, we expect healthcare logistics leaders will increasingly make decisions based on the adaptability, visibility, and scalability features offered by logistics partners," says Shannon DeMar, Director of Strategy, UPS Healthcare.
With new post-pandemic industry priorities, strategists in pharmaceuticals, medical device manufacturing, and laboratories have been analyzing their unique situations and challenges.
The Vital Signs study offers insights on their logistics/partnerships thinking.
Pharmaceuticals
Pharmaceutical firms are prioritizing compliance, cold chain costs, and portfolios.
"Pharma companies have made significant investments in new technology, and they're primed for growth," says DeMar, "but they've also faced increased scrutiny over their ability to deliver therapeutics equitably and at scale. Their ability to coordinate global Governmental regulatory environments is increasing as well. To deliver products globally, large and small manufacturers must navigate a web of laws and compliance directives."
The Vital Signs survey suggests pharma companies in the short term (1-2 years) will focus on
- Reducing portfolios to focus on effective products (34%)
- Reduce compliance costs (33%)
- Improve compliance adherence (31%)
The focus on portfolio reduction likely means successful products will see new investment and scale-up.
Longer term (5-10 years), Vital Signs indicates that companies will prioritize:
- Reducing compliance costs (23%) and cost controls (18%)
- Focusing on acquisitions (19%)
- Expanding their product portfolios (18%)
All of the above suggest they anticipate growth. Other noteworthy long-term priorities include cold chain costs (20%) and home health (17%), driving the need for logistics partners who can facilitate.
Download Vital Signs for Pharma
Laboratories
Laboratories are prioritizing cost controls and expansion.
"Demand for lab services was already on the rise before the pandemic. Advancements in healthcare/consumer technology before and during the pandemic resulted in many home-based healthcare services relying on outsourced labs," says DeMar.
"The number of labs has actually doubled since 2019 – we have 31,000 today. Labs in the United States alone will do 14 billion diagnostic tests this year. This market will be valued at $75 billion by 2027."
Short-term (1-2 years), strategic priorities in the lab sector are:
- Cost control (67%)
- Territory expansion (46%)
- Expanding testing portfolios (37%)
This indicates that labs mean to improve return-on-investment and operation efficiencies as they generate new revenue through expanded testing capabilities.
In the next 5-10 years, strategic priorities are:
- Home nurse availability (51%)
- Cost control (44%)
- Expanding testing portfolios (43%)
"The focus on home nurse availability confirms that home-based care continues to emerge as a priority," says DeMar. "As healthcare systems struggle with staff shortages, home care will take on more importance ... and that means labs will compete with hospitals and facilities for nursing staff to perform home-based sample collection and on-site testing."
Download Vital Signs for Laboratories
Medical Device Manufacturers
Medical device manufacturers are prioritizing cost reduction, technology, and expansion.
"Not long ago, the medical device industry was one of the fastest-growing sectors in healthcare," says DeMar. "Much of the technology making contemporary medical devices possible was relatively new. While the market has stabilized some, firms expect the sector to still grow significantly as at-home and personalized medical care gain prominence."
Vital Signs reveals the short-term focus:
- Compliance with increasing regulations (43%)
- Reducing compliance costs (40%)
- Improving processes for refurbishing, decontaminating, and sterilizing devices (32%).
Long-term focus differs. Device manufacturers report the following as top sector priorities:
- Competing with more advanced technology (31%)
- Expanding territory (28%)
- Nearshoring upstream manufacturing (28%)
Other priorities include reducing logistics costs (26%) and expanding a product portfolio (25%).
Download Vital Signs for Medical Device
Patients, beginning to end
Post-pandemic priorities have evolved.
The Vital Signs survey shows pharmaceutical, medical device manufacturers, and laboratories shifting focus to adaptability, visibility, and scalability ... with a close eye on cost reduction and innovation.
"This survey suggests that enterprises in these sectors are most interested in finding a reliable partner who will provide them with real-time visibility into their supply and logistics networks," says DeMar, "as well as scalable solutions that help them solve problems for their businesses ... and for the patients who rely on their products."
