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The top two planned investments for healthcare companies globally - as cited by 83 percent of decision-makers - are tapping into new global markets and investing in new technologies. Survey respondents plan to employ both strategies over the next three to five years to increase their competitiveness, maintain product integrity and gain efficiencies. The top four countries where companies will focus expansion efforts over the next three to five years are China, the United States, Brazil and India.
While planning investments, healthcare decision-makers remain "cautious" on the state of the industry. They cite as challenges a difficult economic environment, pressures to reduce costs and struggles with increasing regulations and reform.
The UPS "Pain in the (Supply) Chain" survey, conducted by TNS, reflects the views of senior-level healthcare supply chain decision makers in the pharmaceutical, biotech and medical device and supply companies in the U.S., Western Europe, Asia and Latin America.
Despite signals of investing, barriers to global expansion remain with the top barrier being country regulations, cited by 46 percent of executives. Country regulations have remained the top barrier to global expansion each of the past three years. Other barriers to expansion include intellectual property protection concerns and product quality and security concerns, cited by 33 percent and 27 percent of executives, respectively.
"Healthcare companies are feeling the pressure to expand and drive new growth while containing costs and ensuring compliance around the globe," said Bill Hook, vice president, global strategy, UPS Healthcare Logistics. "That has only heightened the need to build more global flexibility, integration and transformation into the healthcare supply chain."
Top business and supply chain concerns
Globally, the top healthcare business concerns include increasing regulations - the top concern cited by 52 percent of executives - as well as healthcare reform and other changes in legislation, cited as a concern by 51 percent. Intellectual property protection ranks third on the list of top concerns, cited by 48 percent of respondents. Concerns around intellectual property protection are highest in the U.S. and Asia.
The No. 1 specific supply chain concern is regulatory compliance, cited by 65 percent of respondents. Cost management comes in second with 60 percent citing this as their top supply chain issue. Only 41 percent report success in managing their supply chain costs. In addition to regulatory compliance and managing supply chain costs, product security and product integrity have risen to the third-most cited supply chain issue, reported by 57 percent. In emerging markets, it is a more significant concern as it is ranked first or second by survey respondents.
"Concerns around regulatory compliance and cost management have been constants for healthcare supply chain decision-makers over the past five years while we've seen growth in concern around areas such as product security and product protection," said Scott Szwast, UPS Healthcare Segment Marketing Director. "While these areas will always be a focus in the healthcare industry, companies can experience positive impact by examining strategies such as increased collaboration, adopting segment based supply chains and leveraging new innovative models and technologies."
Views on economy and industry
In addition to exploring top business and supply chain concerns, the survey probes healthcare decision makers' views on the economy based on what they are seeing within their own companies. Healthcare decision-makers in the United States were slightly less optimistic on the economy, with 53 percent of U.S.-based decision makers reporting they're still feeling economic impacts in terms of tightened spending and other reductions. This compares to 43 percent in Latin America, 35 percent in Western Europe and 26 percent in Asia that are still feeling economic impacts.
U.S.-based decision-makers also were asked their views on the state of the healthcare industry against the goals of the new reform law. The largest group - 38 percent - are "cautiously optimistic" of progress, yet 26 percent espouse a "negative" view while another 22 percent say they are "neutral."
Over the past five years, a top trend in the healthcare industry has been increasing global growth with companies ramping up expansion into new markets each year. With the rise of increasing globalization, healthcare executives have reported growing concerns around the areas of product protection and intellectual property protection. Product protection concerns include both product security and the issue of product damage and spoilage. Concerns around intellectual property protection have grown every year for the past three years.
The survey's five-year data also illustrates the "constants" in the industry that have continued to challenge healthcare supply chain decision-makers. Concerns around cost management and regulatory compliance top the list of industry constants over the past five years.
"The five-year survey trends underscore what we are hearing from all segments of the healthcare marketplace," said Hook. "From industry leaders to middle market companies, healthcare companies are looking for ways to be more collaborative, provide integrated solutions and address segmentation issues around their customers. This information has been critical in continuing UPS's success as a global leader in healthcare logistics."
To download an executive summary and special five-year report, click here.
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