Three Ways A Logistics Partnership Can Reduce The Cost Of Global Expansion

By Trisha Gladd, Editor, Life Science Connect

In order to meet the needs of an expanding global market, healthcare executives find themselves facing the daunting challenge of not only making their product accessible to foreign markets but also maintaining quality during shipment. I recently spoke with Robin Hooker, director of Global Healthcare Logistics Strategy at UPS, about how a logistics partnership can help reduce the costs associated with these challenges and provide advantages beyond the bottom line.

Making Your Global Footprint With a Bigger Shoe

Anyone in the healthcare logistics industry paying attention to the global market knows there are opportunities across the globe that are expanding every day, but many companies don’t have the money or resources to keep pace with the growth. “The healthcare logistics industry is facing constant cost pressures, and the challenge of expanding into new markets continues to be a topic of concern,” says Hooker. “Right now, when we look at global populations and how they are aging, we are seeing that by 2050, there is going to be an explosion in the 50+ age group, particularly in Asia. That is going to drive the chronic disease patterns that ultimately put a burden on the healthcare industry to supply and manage all of the logistics needs.” Because it would be too costly for a company to establish a branch in each of these locations, it’s important to select a logistics partner who is able to reach as many markets as possible.

To help their clients reach more locations, UPS expanded its global healthcare network at the end of 2012 with three new facilities in the Asia Pacific region. Additionally, in July 2013, the company completed the acquisition of CEMELOG, a Hungary-based pharmaceutical logistics company. Scott Davis, UPS chairman and CEO, described the acquisition as “a continuation of our ongoing growth strategy across our business units that allows us to create innovative solutions for our customers and leverage UPS’s global network.” With new locations also opening in North America earlier this year, UPS now has a total of 42 healthcare-dedicated facilities internationally.

Through its efforts to grow into the global market, UPS also has been able to address another pain point for healthcare executives —the high costs associated with global expansion due to regulatory requirements. “Because there is no global standardization, each country is unique with its own rules, and those rules are constantly in flux, which is stressing IT budgets for healthcare companies,” says Hooker. “Logistics and distribution partnerships allow expansion into global markets by allowing companies to access multi-client facilities and regulatory expertise in key market areas, which offers cost advantages to companies that are seeking to expand their global footprint without tying up capital resources and investing in new infrastructure. No particular business functions well without leveraging and having some interdependency with some trusted partners.”

The need to meet varying regulatory requirements has increased UPS’s awareness on how to protect its clients’ products. “In order to meet local regulatory requirements, we have set one standard for all of the healthcare facilities within a region. Our teams can assess a facility, and based on the knowledge obtained through touring other healthcare facilities, can identify areas of weakness,” explains Hooker.

Advanced Technologies for Cold Chain Shipment

With cold chain pharmaceuticals on the rise, Hooker believes pharmaceutical manufacturers will need to look to advanced technologies to ensure safe delivery of their product, especially for those expanding to the global market where longer shipments are inevitable. “There are a lot of areas of risk that can complicate high value temperature- and time-sensitive pharmaceutical products. What we offer are technologies that can protect your product in the event that there is one of those occurrences,” says Hooker.

Specifically, UPS offers leasing of an active packaging system developed by Cool Containers. “The PharmaPort^TM 360 actively monitors the temperature of a product and can address temperature excursion through hot and cold plates that store temperature energy and uses thermostats, monitors, and fans to keep the pharmaceutical product inside at the right temperature on an active basis,” he explains. “Those types of technologies protect product and can save several hundred thousand dollars by preventing temperature excursions, product spoilage, and replacement cost.” Because of the ability to lease a system like this, pharmaceutical manufacturers can save money by using the system only when the size and value of the shipment deems necessary.

Insurance For The Unavoidable

Pharmaceutical companies face many risks related to shipment delays, especially when shipping across multiple regions with unpredictable weather conditions. To further address this gap in the marketplace, UPS has recently launched UPS Proactive Response^TM Secure. This solution offers clients shipment monitoring combined with risk management for time- or temperature-sensitive products.

“What we started to realize is that the market is looking for risk mitigation and prevention. They want a safety net in case the unavoidable occurs,” says Hooker. “Through remote package monitoring, our Proactive Response team can identify when a delay may or has occurred and initiate intervention protocol solutions.” UPS Proactive Response Secure offers insurance up to retail value and even coverage in the event of a weather delay, both of which Hooker says have not yet been seen in the marketplace.

By taking advantage of the movement a logistics partner has made globally, a company can significantly reduce the associated costs and focus their attention and resources on what is most important – a quality product.