UPS, a supply-chain solutions provider, has expanded its Asia healthcare distribution network and aims to work with the Indian government. Lim Bee Koong, Director, Healthcare Strategy, UPS Asia Pacific reveals more about the company’s plans, in an interaction with Usha Sharma
Tell us about UPS’s contribution to the Indian pharmaceutical industry?
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Lim Bee Koong
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With our extensive global network and industry-leading products and services, we have been assisting the Indian healthcare businesses of all sizes to expand across Asia-Pacific and globally. We have invested heavily in temperature sensitive services such as UPS Temperature True which helps maintain shipment visibility and integrity, ensuring that shipments arrive in perfect condition. Our healthcare facilities across the world, with the closest one to India located in Singapore, connects our customers to the global key markets. We expect the business to expand at strong pace with the growth of the healthcare industry in India.
How big is the Indian pharma supply chain market and what is its growth rate?
Pharma logistics is a big market in India. The projections for this market in India are certainly positive. According to the Business Monitor International (BMI), India is noted to be the second fastest growing market in APAC through 2020. This aligns with the findings from The UPS Pain in the (Supply) Chain survey, which reveals that India (13 per cent) is the second top market in Asia for expanding companies, just after China (27 per cent).
Unlike other industry, the pharma industry is very sensitive particularly in the supply chain. What do you have to say on this?
The pharma industry is very sensitive as the integrity (or quality) of healthcare products needs to be maintained if compromised, damaged product can result in very severe consequences or even death.
In fact, some healthcare products are very delicate and need to be handled with great care every step of the way. According to the latest UPS Pain in the (Supply) Chain survey, product damage and spoilage is one of the top three supply chain concerns of the healthcare executives, cited by 67 per cent of healthcare executives in Asia – versus only 38 per cent in North America and 34 per cent in Western Europe.
Trade and healthcare regulations vary across the different countries throughout Asia. Increased awareness and rapid growth in the sector, especially in new therapy areas, is contributing to increased oversight and caution by the authorities. Coupled with a relatively immature transportation infrastructure, the potential for shipment delays is higher than that in the mature markets. Transportation delays, such as customs hold, could cause products to experience temperature excursions and be damaged.
Healthcare companies are constantly seeking appropriate solutions and technologies to ensure adequate protection and visibility to ensure supply chain efficiency. Time and temperature-sensitive products also require constant cold-chain transportation and storage to safeguard product integrity. To protect these high-value products, manufacturers are looking to invest in temperature sensitive services such as UPS Temperature True solutions to maintain shipment visibility and integrity.
Share the highlights of the global healthcare survey report on ‘Pain in the (Supply) Chain’.
Healthcare companies in India share similar business and supply chain concerns as their peers in Asia:
Top business concerns
The top business concerns in Asia this year are:
Increasing regulations is the top business concern, cited by 52 per cent of healthcare logistics executives in Asia; increasing competition is the second business concern at 51 per cent; healthcare reform/ changes in legislation came in third at 48 per cent; patent expiration is also a concern in Asia, as cited by 41 per cent of executives – more than in any other region of the world.
Top supply chain concerns
Product security is the number one supply chain concern in Asia, as cited by 76 per cent of healthcare logistics decision makers – the highest worldwide. Regulatory compliance was the second top issue, cited by 70 per cent, product damage and spoilage came in third, cited by 67 per cent of healthcare executives in Asia – versus only 38 per cent in North America and 34 per cent in Western Europe.
Executives in Asia report large gaps between their supply chain concerns and success levels in addressing concerns, signifying that new strategies and more progress are needed in these areas.
Like last year, the UPS PITC survey shows that healthcare companies are still coping with the regulatory compliance, product security and cost management, underscoring the importance of continuing efforts required to implement strategic supply chain initiatives to address these issues in Asia.
What are the topmost problems in the industry in Asia? How can these be solved?
Product security is the number one supply chain concern in Asia, as cited by 76 per cent of healthcare logistics decision makers, the highest worldwide. This is due to the geographical dispersed nature of the region as well as infrastructure challenges in developing markets, hence the need for added measures to protect products. Healthcare companies are taking several measures to address this concern. Logistics and distribution partnerships, IT investment, shipment insurance and supply chain optimisation analysis are some of the strategies companies are employing. Technology investment has also become one of the top strategies for healthcare executives in Asia, with 72 per cent planning to invest in new technologies with special focus on order management, serialisation technologies and security-specific technologies in the next three to five years to heighten monitoring and visibility capabilities.
Temperature-sensitive products also require constant cold-chain transportation and storage to safeguard product integrity. To protect these high-value products, manufacturers are looking to invest in temperature sensitive services such as UPS Temperature True solutions to maintain shipment visibility and integrity.
The report survey discovered that primary concern areas are regulatory compliance, product security and cost management. According to you, which one of these needs immediate attention and why? Will these actions improve the supply chain?
For the first time, product security has surpassed cost management and become the second-top global supply chain pain point. 76 per cent of the executives in Asia are concerned about product security. This is significantly more than their peers in North America (45 per cent) and Western Europe (47 per cent).
This new trend is alarming and companies must start combating this issue before it is too late. Healthcare companies are taking several measures to address this concern. Logistics and distribution partnerships, IT investment, shipment insurance and supply chain optimisation analysis are some of the strategies companies are employing. Technology investment has also become one of the top strategies for healthcare executives in Asia, with 72 per cent planning to invest in new technologies with special focus on order management, serialisation technologies and security-specific technologies in the next three to five years to heighten monitoring and visibility capabilities.
It is predicted that the top three growth strategies for healthcare executives over the next five years are technology investment, global market expansion and increased use of new distribution channels. What are your strategies on these fronts to stay ahead in this competitive scenario?
Healthcare is a key target growth industry for UPS and we will continue to invest in our healthcare business and network. UPS aims to deliver value to healthcare companies through a broad portfolio of specialised freight and small package transportation and distribution services in Asia and around the world.
To date, our global healthcare network is made up of 41 dedicated healthcare facilities encompassing 595,000 sq m and offers services such as temperature-sensitive handling, geographic-specific regulatory compliance, monitoring and security, kitting and labelling, as well as order management. Along with our facility in Singapore, our new healthcare facilities in Hangzhou, Shanghai and Sydney have significantly expanded UPS’s Asia healthcare distribution network. The state-of-the-art facilities have industry-leading technologies to maintain product safety and integrity and allow us to offer seamless, global solutions to healthcare companies looking to expand into, transport within, and export in Asia.
We are investing in our new global healthcare IT platform including enhancements to office services, warehouse, and inventory and transportation management services.
We are also continuously introducing new services and will continue to invest in building out our healthcare-specific services and offerings based on evolving customer needs.
Globally, pharma companies are optimistic about the economy even during the downturn. Which countries do you prefer as an investment destination?
Healthcare executives are optimistic about the economy and 74 per cent are planning to expand their businesses globally in the next five years, according to the latest PITC survey. The survey also reveals that the top markets for expansion over the next 18 months are China, the US, Brazil and India. While this trend is mirrored in Asia, especially expansions into China and India which are the two largest growing markets of the middle class and of the healthcare industry, the US remains a priority market for the most number of companies surveyed.
India is facing issues due to lack of infrastructure in the pharma and healthcare industry. Moreover, there is a lot happening on the regulatory front of these sectors as well. What suggestions do you want to put forth to the Government for a better supply chain and regulatory system in India?
At UPS, we move about two per cent of the world’s GDP on any given day. We operate in over 220 countries and territories and work closely with the governments in the markets that we operate to ensure we best serve the country and its companies through our industry leading products and services, such as UPS Temperature True solutions.
While we are not in the position to comment on the India government’s policies and plans, we will continue to be committed to the country and work closely with the government to further the supply chain industry in India.
Which compliance issues are the Indian pharma industry facing and how can these be overcome?
Regulatory compliance was the second top issue, cited by 70 per cent of the healthcare executives in Asia, according to the latest PITC survey. It is imperative for healthcare companies around the world to continually increase their standards and getting ahead of evolving regulations in anticipation of regulatory changes. It is critical for all healthcare companies to employ best practices, especially in areas of sourcing, manufacturing and sale of healthcare products. Partnerships with third parties became a strategic move that allows companies to assist them with expertise in relevant areas while they focus on their core business.
What suggestions would you like to give for better compliance system in the Indian pharma industry?
It is imperative for healthcare companies to continually increase their standards in anticipation of regulatory changes that may impact the sourcing, manufacturing, or sale of healthcare products.
UPS has a dedicated team of healthcare logistics professionals in Asia which includes operations specialists, information technology professionals, control tower staff, solutions engineers and quality assurance experts who ensure the entire supply chain is managed with strict adherence to global, regional and local healthcare regulations.
As part of UPS’s commitment to our customers, we provide solutions to help meet the rapidly changing needs of pharma companies today. We work very closely with our customers on strategies that ensure products are delivered to patients in the most appropriate and time efficient manner. Our approach is to provide logistics services for healthcare products across the supply chain to help our customers grow in key markets, while providing them with seamless connectivity and quality service.
How promising is the future of the Indian pharma supply chain industry?
As mentioned earlier, pharma logistics is a big market in India. The projections for this market in India are certainly positive.
We expect the healthcare sector in India to grow at a strong pace with the growth in manufacture of generic medicines along with increased consumption of healthcare services in the country.