CSCMP's Supply Chain Quarterly
October 24, 2018
Forward Thinking

Regulations bedevil health care supply chains

The annual UPS "Pain in the (Supply) Chain" survey finds that regulatory compliance tops the list of worries for manufacturers of health care products.

Regulatory compliance is the top supply chain concern for executives at U.S.-based manufacturers of health care products, according to the results of a recent survey. Seventy-three percent of the U.S.-based health care executives who took part in the fourth annual UPS "Pain in the (Supply) Chain" survey ranked regulatory compliance as a top supply chain concern. Second on that list, cited by 64 percent of U.S. respondents, was managing supply chain costs. Additional supply chain issues cited included product security, product damage or spoilage, and access to global or emerging markets, among others.

The telephone survey of supply chain and logistics executives at pharmaceutical, medical device, and biotech manufacturers in the United States, Europe, and Asia was conducted for UPS by the global research firm TNS. Approximately 250 companies participated in the study.

Regulations were at the top of another list: barriers to global expansion. Forty-two percent of all respondents said that country regulations were a "high or extreme" barrier. Other barriers cited included intellectual property protection, product quality, product security, limited infrastructure, managing multiple logistics providers, and managing global suppliers.

The survey also found that 86 percent of all respondents plan to invest in technology over the next three to five years to boost competitiveness. One of the reasons for their strong interest in technology investment is the need to contain costs; in fact, only 42 percent of the surveyed managers said that they had had any success to date in controlling supply chain costs. Among the other strategies for increasing competitiveness cited by respondents were tapping new global markets, increasing use of new distribution channels/models, working with or increasing reliance on third-party logistics providers, and relying more on global manufacturing/suppliers.

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