May 17, 2020

Health and life science supply chain markets "ripe for digital disruption"

Healthcare Supply Chain
supply chain life sciences
DHL supply chain
Supply Chain
Scott Allison, President Life ...
5 min
Healthcare and life sciences ready for disruption
All signs are that the life sciences and healthcare market is ripe for disruption, with ecommerce coming into its own in the sector.

The push for onlin...

All signs are that the life sciences and healthcare market is ripe for disruption, with ecommerce coming into its own in the sector. 

The push for online pharmaceuticals is underway with multi-billion dollar ecommerce markets opening up as you read this. Very soon, patients around the world will have a genuine alternative to receiving drugs direct from their prescribing doctor and having to wait in line to fill prescriptions at their local pharmacy. Alongside these traditional channels, a burgeoning trend in life sciences and healthcare ecommerce means patients are starting to receive insulin along with many other life-saving pharmaceuticals literally to their doorsteps.

Why now? Firstly, consumers are changing and transactions are becoming increasingly digitised. This drives the demand for ecommerce solutions, with consumers ordering and receiving products at home. In addition, physical barriers to life sciences and healthcare ecommerce are being removed. We are able to deliver essential temperature control and sensitive product monitoring throughout the end-to-end supply chain. Added to this, logistics companies have achieved both cost efficiency and sophistication in serving the so-called ‘last mile’ of delivery – the final part of the journey required to ensure an item is safely and securely handed over to the right person.

Today, I believe there are five key drivers for the intense growth of life sciences and healthcare ecommerce, all working together to change the face of our industry forever.

Profit-seeking

Providing pharmaceutical products to patients is an extremely profitable business. Recent data from the USA indicates that Walgreens and CVS make at least 70% of their profits from the pharmacy outlets, which are typically tucked away at the back of their stores. This kind of margin makes it attractive for different players to try and take a share.

Cost-cutting

In traditional distribution channels, multiple parties have always had a finger in the pharma pie: manufacturers, wholesalers, distributors, pharmacies, doctors and hospitals, even the insurance companies profit heavily as products move from the factory to the patient. Ecommerce can cut costs by creating a direct relationship between the manufacturer and the patient. Governments and regulators can see this and, as pressure is on them to reduce healthcare cost, change seems inevitable.

Take for example the new two invoice policy in China. To keep a firm grip on pharmaceutical profiteering, this system allows a first invoice to be issued by the manufacturer to the distributor. After this, the only other invoice is from the distributor to the medical service provider or institution. Cutting touchpoints is an effective way of cutting costs (and it speeds up cycle times too).

Customer demand

Patients are also consumers. Across many countries of the world – particularly in the vast ecommerce markets of China, the U.S.A. and the U.K. – consumers are very familiar with the convenience of online purchasing and expect consistency in their omnichannel experience. Many of these consumers are already buying healthcare supplies online – for example, they fortify with vitamin supplements and see clearly with repeat-order disposable contact lenses. Their demands are propelling life sciences and healthcare ecommerce growth.

In developing countries with an immature supply chain infrastructure, customer demand may even result in a technology skip. In the same way as Africa embraced mobile banking in the absence of accessible traditional banking services, developing countries may now leapfrog and welcome direct-to-patient delivery.

Rejection of protectionism

As technology and progress are enabling new business models, lobby groups are very involved in protecting and bolstering the existing pharmaceutical channels of large companies. These companies must decide whether to “disrupt or be disrupted”. Failure to participate can mean missing out on valuable new opportunities as an e-pharmacy. Around the world there is rejection of protectionism in favor of open access and customer centricity.

Sheer momentum

It’s not all just about prescription drugs. Many of the largest pharmaceutical companies – such as Bayer, Colgate, Johnson & Johnson and Pfizer – have huge businesses that sell consumer healthcare and OTC products in vast quantities via the biggest online platforms. Medical device companies are already selling products online to business customers so why not direct to consumers too? Of course prescription sales are highly regulated but, like the proverbial last bastion, this is sure to fall with the sheer momentum of the ecommerce movement.

All signs are that the life sciences and healthcare market is ripe for disruption. Pharmaceutical companies and medical device manufacturers will continue to deliver in volume to wholesalers and distributors but they are now also embarking on direct-to-patient delivery. Ecommerce giant Amazon is hiring health professionals. There is a big slice of the healthcare market up for grabs – and the change is happening now.

Logistics is ready to respond with services tailored to different product types. For example, in big cities, essential insulin orders placed before 12-noon will be purchased with a four-hour delivery guarantee. Meanwhile, a supply of something less critical, such as aspirin, could arrive free of charge within a two- or three-day delivery window. When submitting online prescription orders for their patients, doctors will simply specify the delivery urgency in each case.

Patients will increasingly manage their own prescription medication online, as evidenced by the home delivery and pharmacy leader in ordering and refilling of prescription medicines, which embraces both a traditional pharmacy model and a home delivery model. The life sciences and healthcare sector may have been late to adopt digitisation, but ecommerce is set to propel it forward in the very near future.

Share article

Jun 16, 2021

Gartner: Women in supply chain at five-year high

supplychain
Diversity
women
Gartner
3 min
Overall percentage of women working in supply chain has risen, but concerns persist around declining representation in executive leadership

Women now represent a greater percentage of the supply chain workforce than at any other point in at least the past five years, according to a recent Gartner survey. 

The Women in Supply Chain Survey 2021, conducted by Gartner and Awesome, surveyed 223 supply chain organisations with more than $100m in annual revenue from February through to the end of March 2021.

Key takeaways 
 

  • Women represent 2% more of supply chain workforce than in 2020
  • Women now account for 42% of the workforce
  • Number of women in exec-level positions declined by 2%
  • Just 15% of top leadership are women (17% in 2020)
  • 84% of organisations say COVID-19 did not impact efforts to advance women


It found that women now represent two per cent more of the supply chain workforce than in 2020, accounting for 42%, compared with 39% last year. Dana Stiffler, Vice President Analyst with the Gartner Supply Chain practice, says the impact of COVID-19 on supply chain was significant, though different to other sectors. 

"Contrary to other industries, supply chain’s mission-criticality during the COVID-19 pandemic has meant that many sectors did not reduce their workforce, but rather continued to hire and even faced talent shortages, especially in the product supply chains," she said. "This resulted in many women not only standing their ground in supply chain organisations but increasing their representation in organisations. We also recorded a record number of specific commitments and supply chain-led actions and saw existing programs starting to pay off."

Gartner Women in Supply Chain Survey 2021
Women in Supply Chain Survey 2021

 



Supply chain still lacks women in executive leadership 


But the elephant in the boardroom remains. Though the figures present a positive step towards greater diversity and gender equality at all levels, the number of women in executive level positions declined by two per cent in the past year. Women represent just 15% of the upper echelons of supply chain leadership. Gartner did however record a rise in women at all other levels of leadership. 

The vast majority (84%) of organisations surveyed said the outbreak had no discernible impact on their ability to retain and advance women. But more than half (54%) admitted that retaining mid-career women was becoming increasingly difficult. A lack of career opportunities was cited as the biggest challenge to this, while other blamed a lack of development opportunities. 

Despite these challenges, companies of all sizes are becoming broadly better at gender diversity. Around a third more said they had a targeted initiative focused on attracting women and advancing their careers. 

Stiffler said a push towards measurable and formal initiatives is at least pointing in the right direction: “It's encouraging to see that the larger share of this jump was for more formal targets and specific goals on management scorecards. For these respondents, there is greater accountability for results — and we see the correlation with stronger representation and inclusion showing up in pipelines.” 

Share article