Most of us interact with package delivery companies such as the United Parcel Service (UPS) and FedEx at our front door, as these companies bring our online purchases and whisk away items that looked better on eBay. Without the efficient, secure and accurate movement of parcels, many of us would risk receiving stale birthday cake or Christmas cookies around Easter. If it were not for the services these companies provide, there would be no Amazon and fewer small businesses.
But package delivery companies do a lot more than just move boxes from one location to another. They now provide a wide range of supply chain solutions from warehousing to product support and repair and even inventory controls. For example, for more than a decade, Toshiba has relied on UPS for the repair and servicing of all its laptop computers. Individuals drop their computers off at one of the thousands of UPS stores around the U.S. From there it is sent to a special facility in Louisville, Kentucky, next to UPS’ Worldport– the central hub of the company’s global aviation logistics architecture. The Toshiba computer repair facility is so efficient that laptops brought in one day can often be sent back to the owner the next. Toshiba saves money on this arrangement in multiple ways: not having to build or rent facilities, reduced losses in transit, fewer repair errors and a faster return of working computers to their owners.
What parcel delivery companies have done for retail sales they are about to do for the healthcare industry. Everyone recognizes that priority must be given to managing healthcare costs while improving the quality of care. Insuring the fastest and most accurate delivery of medical devices and supplies and managing the inventory of medicine, blood products and other critical items could significantly reduce national healthcare costs. The money saved could be spent on increasingly expensive research and development. One healthcare logistics provider observed that “over the past few years—during which research and development costs, for example, have quadrupled—healthcare businesses have started seeking areas where they can save money. One such area is the supply chain.”
There is also a strong push to focus more on patient-centric care which includes providing consumers with direct access to healthcare supplies and reducing the requirement for hospital stays, doctor’s visits and even trips to the pharmacy. The ability to manage large networks of hospitals and clinics with direct delivery of products to patients could both save money and create a better experience. According to John Menna, UPS’ Vice President of Global Strategy, Healthcare Logistics:
“One trend is for hospital systems to invest in building and buying out clinical locations that are closer to the patient, which widens the scope of logistical complexity for their supply chain executives. The goal of providing more patient-centric care requires building a supply chain network that meets the needs of not only the institutional hospital, but also the ambulatory, clinical, and homecare settings.”
The field of healthcare logistics is particularly in need of the kind of end-to-end supply chain solutions that major logistic and package delivery companies have spent decades perfecting. Merely keeping track of all the different items that must move through the heathcare logistics network can be a daunting task. Many healthcare products require great attention to transportation and specialized storage to ensure quality and avoid spoilage. The regulatory environment for medical products is complex and in a state of flux. The crisis created by illegal drugs, such as opioids, forces nations to take steps that complicate the legitimate movement of medical products. In an increasingly global healthcare marketplace, suppliers have to contend with an expanding array of trade, security, safety and environmental regulations.
The major parcel companies are investing heavily in this area counting on their decades of experience in global supply chain solutions and rapid, accurate movement of goods across state and international borders to translate to the field of healthcare logistics. UPS has built specialized compartments in more than fifty warehouses around the world with precise temperature and humidity controls as well as continuous monitoring and other security measures. The UPS tracking system provides a certified chain of custody for sensitive shipments.
The company also recently opened its first medical device facility, located in Swedesboro, New Jersey. This facility is more than a warehouse. It loans high-end medical equipment to hospitals around the nation. It then receives back the equipment, sanitizes it, replaces expended parts and certifies the assemblage for use. Often this process takes only a few days. The ability of hospitals and medical centers to use expensive equipment only when needed can result in tremendous cost savings.
Healthcare logistics is a critical issue when it comes to natural disasters such as Hurricanes Harvey and Irma. Obviously it is important to move critical medical supplies into affected areas as rapidly as possible. But it is also vital that the safety of drugs and blood products be assured. Because of their resources and knowledge, package delivery companies are major partners to local, state and federal agencies in disaster response and recovery.
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