Biopharm turning to 3PL & global suppliers for savings

By Nick Taylor

- Last updated on GMT

Related tags Supply chain management Logistics

Close to two-thirds of biopharm companies plan to increase reliance on 3PL providers and global manufacturers in coming years, a survey found.

Increasing outsourcing to third-party logistics (3PL) firms and relying more on global suppliers were two of the top ways biopharm surveyed by UPS plan to increase efficiencies in the next five years.

"Going forward, companies have to find new ways to innovate and adapt to rapid market changes and this is where the supply chain plays a pivotal role​”, Bill Hook, vice president, global strategy at UPS Healthcare Logistics, said.

While most surveyed plan to use 3PL and global suppliers, the overwhelmingly most popular option to boost efficiencies was investment in technology. Of the 250 biopharm and medical device employees surveyed, 86 per cent said they will invest in technology in the next five years.

Breaking the data down by geography shows this figure rises to 93 per cent among US respondents, with Europe and then Asia lagging behind. Investment in technology is ramping up from a sizable base, with 72 per cent of healthcare players saying they have spent in the area in the past 18 months.

Global expansion

Adding customers by entering new markets just trails technology investment as a priority. Challenges linked to managing 3PL providers and global suppliers were viewed as high barriers to expansion by 13 per cent of respondents, making it a much smaller obstacle than national regulations.

Again, the desire to enter new markets varies from region-to-region, with Asia-based respondents very likely to expand geographically. Asia-based companies, such as Indian generic firms, have built a presence in their home markets and are now looking overseas and to the US in particular.

While some concerns vary from region-to-region, they remain constant from year-to-year. “Comparing year-over-year trends, companies remain highly concerned about the issue of supply chain cost management but report limited success in addressing this issue​”, UPS said.

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