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Watch for Sensor-Assisted Boomers

Sept. 24, 2014
There are millions to be made by turning supply chains into life support systems for kids of the Greatest Generation.

We Baby Boomers are not getting any more attractive as we age—except maybe to the industries falling all over themselves to answer our expanding list of concerns. One of the concerns we have in common with those industries is risk. Our risks are obvious (like falling all over ourselves). The risks for the Baby Boomer Support industry stem from regulation. That’s particularly true of healthcare service providers.

Boomers represent a global market, and regulations governing supply chain issues can make a big difference in how successful those companies are. For example, UPS just released the results of its 7th annual “Pain in the (Supply) Chain” survey, which reports that globally, healthcare executives are planning for strategic partnerships and technology investment to mitigate the risks associated with supplying pharmaceuticals. What risks?

The big one is that those chemicals will go bad.  Product damage and spoilage came in just a few percentage points below product security and cost management as a concern in the UPS survey, and that matches up with previous-years’ survey results.  Melanie Alavi, director of global healthcare strategy for UPS, explained to me why that made sense. She cited the 2014 Biopharma Cold Chain Sourcebook, which shows that eight of the top ten pharma products in 2016 will be moved through the cold chain—up from five in 2009.

“While regulatory compliance as a broader topic could continue to overshadow other concerns, we believe that the focus on product protection will continue to be top-of-mind issues for both our customers and the respondents to the Pain in the Chain survey,” she said.

That made sense when she explained it, but in looking at the survey numbers something didn’t add up.  The percentage of executives concerned about product security and damage seemed low to me—46%. I would have thought that number would be somewhere in the 90s, considering that without it there would be no products to sell. I asked how she accounted for this.

“Concerns around product protection—which includes both product security and product damage and spoilage—can be related to regulatory concerns,” she said. “There is overlap between product protection and regulatory compliance, which is the top supply chain concern for the third year in a row, with 60 percent of respondents citing it as a concern. When thinking about some of the key checkpoints for manufacturers becoming compliant with the Drug Supply Chain Security Act (DSCSA) or European Good Distribution Practices (GDP), as examples, product security and product damage and spoilage could appear to be, individually, less top of mind.”

“While regulatory compliance as a broader topic could continue to overshadow other concerns, we believe that the focus on product protection will continue to be top-of-mind issues for both our customers and the respondents to the Pain in the Chain survey."—Melanie Alavi, director of global healthcare strategy for UPS

She added, however, that companies taking steps to meet the transaction requirements for the DSCSA (which calls for national standards to track pharmaceuticals through the distribution chain) will already be moving toward making their products safer from fraud and theft—as well as spoilage.

There were interesting regional findings among global players in the healthcare industry, too. For example, despite acknowledging the risks inherent in their supply chains, only 26 percent of healthcare executives surveyed cited contingency planning as a top supply chain concern. This is despite the fact that 34 percent in Asia and 22 percent in Latin America say that more than one-quarter of their companies’ supply chains were affected by unplanned events in the past three to five years. What gives here?

The report states that these events are seen as being too unlikely or infrequent (61 percent), that back-up infrastructure is seen as too expensive to deploy (46 percent) and that little to no prioritization is being given to this area (42 percent) versus other more urgent matters.

“We know that technology investments often have to be prioritized,” Alavi explained. “So, it might not be that the percentages here are low, but that some other investments are taking center stage at the time—specifically, order management, serialization and track and trace technologies.”

The first phase of the DSCSA goes into effect on January 1, 2015, which requires manufacturers, wholesalers and pharmacies to pass on transaction history, information and statements. Alavi said that the healthcare executives in the UPS study are balancing a number of investment priorities across their business to keep pace with global expansion, product development and changing distribution channel strategies.

If these executives are anything like the participants in MHI’s Material Handling & Logistics Roadmap workshops that took place across the country last year, they will see to it that those investment priorities merge. The report that came out of those workshops stated that damaged or mistreated goods in any supply chain (due to temperature changes, for example) will be unacceptable. One way they believe such problems will be avoided is by using sensor systems and alerts throughout all supply chains. In fact the Roadmap report’s authors state that by 2025, the material handling and logistics industry will have to “offer a wider suite of services, at a faster rate and at a lower price point,” to make this vision of a super-sensitive supply chain a reality. What will that reality look like?

“By 2025, sensors that automatically communicate with the Internet without human intervention could be almost ubiquitous,” the Roadmap states. “Containers should have sensors communicating vital information in real time, such as shock and temperature so remedial actions can be made if an unsafe condition is encountered.

We Boomers could be wearing those sensors by 2025—in case we fall down and live up to our name.

(As Boomers leave the workforce, they're leaving a void that's hard to fill. Go to our Gallery, "Occupations Most Vulnerable to Boomer Retirements," to see what kind of problem you'll cause upon exit or what kinds of opportunities are opening for fresh young talent.)