UPS Makes Big Bid for Medical Supplies Supply Chain

UPS said this week it is taking steps to optimize 36 U.S. Field Stocking Locations in order to serve the medical device sector as part of its global healthcare growth strategy.

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UPS said this week it is taking steps to optimize 36 U.S. Field Stocking Locations in order to serve the medical device sector as part of its global healthcare growth strategy.

Company officials said that the objective of this healthcare-compliant FSL network is to reduce delivery time of medical device shipments and also to augment inventory visibility. UPS defines its FSLs as strategically-located facilities designed to support time-sensitive distribution and efficient warehousing of products that help companies get products to their customers faster while better managing inventory costs, regulatory compliance and end-to-end visibility.

And they added that these 36 FSL locations will offer medical device manufacturers with access to more than 80 percent of total U.S. hospital beds within four hours, adding that they will:
-operate under the guidance of UPS’s industry-leading quality assurance and compliance program; and
-feature temperature-controlled or monitored environments and offer same-day delivery services that will enable medical device manufacturers and their field sales representatives to provide best-in-class service to their customers and better manage their inventories to gain efficiencies
UPS director, global healthcare strategy Josh Cannon told LM there were various reasons for enhancing these FSLs.

“With trends like the growing aging population and the increased need to deliver better care at a lower cost, we are working to provide healthcare companies with innovative solutions that help them better manage inventory and realize greater cost efficiencies,” he said. “With 36 cGMP-compliant field stocking locations (FSLs) in the U.S., we are able to provide medical device manufacturers with quick access to over 80 percent of hospital beds within four hours, along with end-to-end visibility of their products, which allows them to have greater control over their costs and inventories.”

Cannon pointed out that the U.S. is the largest medical device market globally, representing 38 percent of the global medical device market in 2012, according to U.S. Department of Commerce data. And Commerce says the market is set to increase to $133 billion by 2016. With that in mind,  Cannon said it made sense for UPS to optimize the U.S. FSL network to better support manufacturers in the U.S.
When asked about the biggest benefits of this news for customers, Cannon cited how there are things that impact not only medical device manufacturers but also their customers, such as hospitals and other healthcare providers.
“First, we are now able to provide manufacturers with increase speed of delivery, by utilizing our strategically located, cGMP-compliant FSLs around the country to quickly reach those who need the devices,” he said. “The solution also provides manufacturers with enhanced visibility, allowing them to track their inventory throughout the supply chain. And, finally, this contributes to better inventory management which can often realize cost efficiencies, as supply chain efficiencies are identified.”

Cannon declined to disclose the next steps for these healthcare FSLs, but he did say UPS constantly evaluates current and future needs in each region and adapts solutions to serve its customers globally.

“We also look for cross-industry solutions when available,” he said. “For example, traditionally, the UPS FSL network is often used by high-tech, telecommunications, aerospace, industrial, automotive and non-regulated medical device manufacturers. We were able to leverage and enhance this existing asset to quickly develop and implement this solution for medical device manufacturers.”


About the Author

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 [email protected]

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