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More details on UPS healthcare survey surface

"As healthcare supply chains become more global in the pursuit to reach new consumers and patient populations, the returns process can become quite complex,” said John Menna director of global strategy for UPS healthcare logistics.
By Patrick Burnson, Executive Editor
August 09, 2011

As noted in yesterday’s report, a new UPS survey of healthcare executives revealed some surprising facts about new trends global distribution. Subsequent interviews captured more information on reverse logistics.

“As healthcare supply chains become more global in the pursuit to reach new consumers and patient populations, the returns process can become quite complex,” said John Menna director of global strategy for UPS healthcare logistics.

Menna told LM that some of these complexities may include navigating customs clearance and the varying country-by-country government regulations regarding the documentation, destruction or refurbishment of prescription products.

“So processing products for returns, for example, would potentially be more exposed to some of the major supply chain concerns such as regulatory compliance and product security that emerged in the survey results,” he added.

The survey also noted that healthcare companies remain heavily focused on global expansion, with the top five markets for growth cited as the U.S., China, India, Japan and Brazil. Interestingly, companies in Asia are more focused on global expansion than those in the U.S., with 75 percent of healthcare executives in Asia having recently expanded into new global markets to increase their competitiveness versus 58 percent in the U.S.

Several other interesting differences arose between regions.  When asked about business concerns, only 30 percent of U.S. company respondents had concerns about increasing competition versus 51 percent in Asia.  Around the issue of intellectual property protection, 50 percent of companies in Asia reporting concerns versus only 34 percent in Europe.

There were other key differences in supply chain concerns as well.  Companies in Asia were much more concerned about product security as a supply chain issue, with 71 percent reporting high concern versus 53 percent in the U.S. and 51 percent in Europe.  Product damage and spoilage was a much larger issue of concern in Asia and the U.S. than in Europe, with 70 percent and 67 percent of Asian and U.S. companies, respectively, reporting concerns versus only 27 percent in Europe.

With extended supply chains due to globalization and the introduction of more specialized products into the marketplace, concerns over regulatory compliance, product integrity and security all remain at the top of supply chain concerns again this year.

Regulatory compliance is the No. 1 supply chain concern cited by 73 percent of respondents. Product security was cited as a concern by 61 percent and product damage / spoilage by 56 percent. Managing supply chain costs came in second overall, with 64 percent of healthcare executives rating this as a top supply chain concern.

Comparing year-over-year trends, companies remain highly concerned about the issue of supply chain cost management but report limited success in addressing this issue.  Only 42 percent of global executives surveyed in 2011 reported success in supply chain cost management.  In the U.S., however, companies appear to be getting better at cost management, with 53 percent of U.S. executives reporting success in this area in 2011 versus 44 percent in 2010.

About the Author

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Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


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