Since the pandemic, supply chains have been in a constant state of disruption. Much of that is outside of the healthcare industry’s control, so how do we control what we can control while mitigating those risks?
We must continue to challenge the whole concept of what supply chains look like, imagining what we could achieve and control with true end-to-end systems from the clinic to the hospital or patient’s home.
Excitingly, we’re now at the point where we can go beyond providing quality storage and transportation of these complex products, to playing an active role in changing how we deliver healthcare and—most importantly—driving better patient outcomes.
Here are some key areas where this overall way of thinking is changing.
Managing and mitigating new types of risk
Overall, pharma supply chains have shown themselves to be adaptable, but if we look to the future, more than half of the drugs in development are biologics that require cold chain and temperature-monitoring services development. Adding in new treatments for aging populations and the growth of chronic diseases, the margins for error get even smaller—with a patient at the end waiting for his or her treatment.
Supply chains will need to continue to develop to adapt to a broad range of risks, from economic, social, and geopolitical. Creating and relying upon multi-modal supply chain networks that can pivot on a global scale to meet these needs will be essential.
To avoid these risks, companies are also actively seeking alternative sources closer to home for their drugs and devices. Nearshoring and diversification of supply chains aren’t theoretical. They’re happening now. Operations that are closer to home can reduce expenses and complexity. It provides enhanced control over products and the moderation of the financial impact of restrictions on shipping and deliveries. Simply being in the same time zone as production and shipping simplifies business and improves collaboration.
That’s why we are so focused on simplifying and de-risking our customer’s supply chains as much as possible, making logistics a competitive advantage. When you marry control and visibility, it allows you to orchestrate an entire supply chain from end to end. With the right network, it also means you can effectively utilize and divert resources from one mode to another in response to disasters or disruptions.
Bringing treatment to heart and home
New technologies, along with supply chains, can provide the convenience and control patients want and already experience in other areas in their daily lives. We’re all consumers after all. The most well-known example of this thus far is telemedicine, which we’re seeing grow globally.
Looking to the future, we can also see the home delivery of fragile prescriptions and specimen collection to inform individualized diagnoses, therapies, or clinical trials more quickly, or better reaction times should problems be picked up by remote monitoring of patients with chronic issues.
Around 22% of the global population is expected to be over 65 by 2050, which presents new opportunities to provide at-home healthcare services, so this isn’t only about convenience—it provides a major opportunity for healthcare systems around the world. Not only is this a win for patients, but it can also help free up much-needed space in hospitals and clinics, reducing care pressure and risk of infection.
Making the most of digital tools for data
We have access to more data than ever, but combining those data streams into one comprehensive view and being able to act on that information in real time will mark the next stage of supply chains.
By being able to aggregate data across the entire supply chain—inventory data in warehouses, inbound and outbound shipment data, temperature data, sustainability metrics, and more, you can create a comprehensive data stream from pickup to delivery that makes your supply chain “smarter” and by extension, more resilient. While resiliency and adaptability have been a major focus as supply chains have evolved, this is only one step in the journey. It’s now essential that our supply chains, underpinned by physical and digital infrastructure, become more proactive and predictive, ensuring that potential issues are dealt with before they even arise.
In operations, robotics and automation technologies are streamlining processes such as picking, packing, and shipping. Automated systems equipped with computer vision and machine learning algorithms enhance accuracy and scalability while reducing reliance on manual labor and mitigating human errors.
The best supply chains can and will run from a “control tower” overview, creating a comprehensive view from pick-up to delivery that makes your supply chain ‘smarter’ and, by extension, more resilient—especially if one area was to go down.
Healthcare supply chains have created a great roadmap for using technology in critical supply chain sectors. If we can work to this level of precision for even the most fragile products, it shows the possibilities still open to us for other products and sectors where we drive better outcomes for all.
Sustainability: The next frontier
Customers and governments are demanding that businesses become more sustainable and efficient, and the healthcare industry is no exception.
What makes it so challenging for the industry is that the majority of their emissions count as Scope 3, or those that are defined as activities that impact a company’s value chain but are directly created by their operations, such as transport and packaging. In my opinion, this will not change anytime soon, and sustainability will continue to remain top of the industry’s agenda meaning that partnerships and innovation will be critical.
When we consider that healthcare accounts for 4.4% of global CO2 emissions (according to Harvard Medicine Magazine)—more than either the aviation or shipping industries—there’s not only an incredible need for sustainability gains but also an incredible opportunity.
Alongside the efficiency gains brought about through the increased use of AI, automation, and other digital tools, we expect circular practices to gain momentum with greater emphasis on using less, using longer, and using again.
Whether it’s through recyclable packaging, renewable energy, reducing wastewater, or taking advantage of more readily available renewable energy there are real opportunities to drive the sustainability agenda in the healthcare space, with a positive financial impact.
About the Author
Scott Szwast is VP of International Strategy at UPS.