COVID-19 turned healthcare upside down. Because of the pandemic, doctors, hospitals, labs and other shippers needed a new partner to help them provide patient care: logistics companies.
"Before this, our customers were primarily asking us to focus on the 'last mile' which really only solves a portion of our customers' business challenges. Now, we're working across the entire supply chain," says Dan Gagnon, vice president of UPS Healthcare Marketing and Strategy.
Shipping Complexities Necessitated Leadership Along the Chain
The pandemic brought about new, global conditions for healthcare manufacturers, distributors and retailers who had to meet the needs of hospitals, governments and patients in more intricate and important ways than ever before.
Distributing vaccines worldwide became a massive operations and logistics puzzle—not just a shipping challenge. And the complexities of end-to-end cold chain management only compounded as new mRNA frozen vaccines were hitting the market.
Understanding and meeting customer regulatory requirements, setting up freezers and cold storage infrastructure, and ensuring quality and visibility for time and temperature-sensitive deliveries necessitated smarter collaboration and more leadership from logistics partners.
Having delivered over one billion vaccine doses to over 110 countries with a 99.9% on-time delivery rate, UPS has experienced this change firsthand. Read our press release, The Faces Of A Billion, to learn more.
"The pandemic brought with it new supply chain problems for governments and ministries of health who needed UPS Healthcare logistics expertise to design, implement and execute. It has not only redefined how our industry responds in public health emergencies, but is a lesson that will continue to shape how we do business," said Gagnon.
Logistics Needs Remain High as Global Demands Continue
With new variant strains, clinical trials and booster programs underway worldwide, the job of pharmaceutical manufacturers, clinical research organizations and distributors continues. The global nature of the virus has only helped prepare the healthcare industry for faster, more reliable execution from highly urban cities like Tokyo to extremely remote areas like Greenland.
Global Industry Analysts Inc. estimated that the U.S. healthcare supply chain management market would reach $1 billion by the end of 2021 and China's would hit $192.9 million by the end of 2026. Growth across Canada, Japan, Europe, Germany and other major markets shows the potential for more complex demands in this new era of healthcare logistics.
To build a sustainable supply chain that rises to this occasion and withstands the final miles of COVID-19, healthcare shippers and manufacturers should fortify their operations with enhanced visibility tools; higher-tech shipping and storage; and better regulatory brokerage.
Three Strategies for a Modern, Sustainable Healthcare Supply Chain
1. Leverage technology that helps tighten grip on supply chain management and operations
In this current environment, shippers, suppliers and logistics providers need solutions that allow them to over communicate. Everyone along the chain has to know where their shipments are, what condition they're in, and if they're going to arrive on time and as designed.
Novel GPS sensor tracking technologies on packages and within storage facilities help improve readiness, security, performance, sales and reputation. The ability to monitor in real time and rapidly and strategically respond to opportunities, market changes, and global health needs will be critical in this new era of healthcare logistics—even for small shippers.
This visibility is not only key to understanding quality, operational health and supplier performance, it can also be predictive in identifying weak performing shipping lanes, help shore up cash management, cut costs and mitigate risk overall.
With 10+ million square feet of high-tech and healthcare-compliant warehousing worldwide and the unparalleled tracking capabilities of UPS® Premier, UPS Healthcare offers a portfolio of service options supported by technology to create a fast lane for your critical healthcare shipments.
2. Get support from regulatory experts with global reach to broker complex, time-consuming relationships
Supply chain costs comprise 50-60% of a typical healthcare company's expenditures. The time and resources needed to manage and address changing product safety and regulatory requirements can cost millions, especially as supply chain globalization accelerates.
It's so costly because healthcare supply chains are highly specialized. For example, storage and transportation requirements differ by product and destination delivery, and regulations can differ by country. Multiply that across 200+ countries and territories and human capital (and, well…regular capital) investment becomes immense.
And with so many demands and critical patient needs in front of healthcare manufacturers, labs and other shippers as COVID-19 continues, understanding regulation will be the first of their problems but should be the last of their worries.
Rather than reinventing the wheel each time, lean on logistics providers that have healthcare and regulatory expertise. The experts know the product, regulators, requirements for delivery and can execute a global solution at a local level ensuring that customers—no matter who and where they are—are satisfied.
3. Hope for the best but prepare for the worst to maintain business continuity in this new era of healthcare logistics
If the last two years have illustrated anything, it's that "plan then test," is an important mantra for critical supply chains within healthcare that want to deliver in spite of challenging circumstances.
For example, prior to the approval of vaccines in the first quarter of 2020, countries were heavily invested in securing and distributing PPE. With production at capacity, airplanes grounded and hospital personnel fighting to save lives, the strain on the supply chain was enormous. Aircraft charters, which normally cost $300K per flight, were going for $1.3M. And despite intentions or best efforts, needed supplies just couldn't get off the ramps.
Many governments, manufacturers and distributors learned a valuable lesson about the need for strong, actionable business continuity plans. Having a good plan to source supplies, labor and required assets can't be a lifeline, it has to be the status quo in today's environment. Because as the pandemic continues, providing critical, life-saving care to patients is really what's on the line.
The Future of Healthcare Logistics is Patient-Centered
Getting more patients what they need, when they need it, is going to take on new meaning in the years to come. Meeting more intricate requirements, addressing globalization and managing the complexities of our interconnected supply chain will require continued partnership between manufacturers, suppliers and logistics companies—all of whom now play a more important role in helping providers deliver quality patient care.
COVID-19 isn't over. And the virus will likely require annual or bi-annual boosters for the foreseeable future. Despite the harsh reality of that timeline, UPS Healthcare remains motivated by the pandemic—ready to solve problems and continue charging into this new era of healthcare logistics. To succeed, we have to focus on maintaining a sustainable, collaborative supply chain that delivers for everyone on this hard road ahead.