Specialty Logistics Outlook. Six facts to focus on in the coming year.
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1 2015 Specialty Logistics Outlook Six facts to focus on in the coming year.
2 THE BRIC NATIONS BRAZIL, RUSSIA, INDIA AND CHINA ARE POSITIONED TO ACCOUNT FOR MORE THAN $248 BILLION IN PHARMACEUTICAL SALES BY 2016 i 1 4 THE RISKS ASSOCIATED WITH SUPPLY CHAINS ARE EVOLVING FROM A BACK-OFFICE CONCERN TO A PROMINENT POSITION ON THE BOARDROOM AGENDA ii 2 5 SHIPPER-3PL PARTNERSHIPS SHOWED AN AVERAGE OF9% LOGISTICS COST REDUCTION IN 2014 ii 3 6 SKILLED LOGISTICS MANAGERS ARE IN DEMAND BECAUSE OF THEIR ABILITY TO SPOT COMPLICATIONS AND CREATE EFFECTIVE SOLUTIONS ALL IN SUPPORT OF A COMPANY'S OBJECTIVES iii AS COMPANIES EMBRACE CSR, THEY ARE CHANGING HOW THEY ADDRESS TALENT MANAGEMENT AND THE INDIVIDUALS WHO OVERSEE SUSTAINABILITY ii THE GLOBAL PHARMACEUTICAL INDUSTRY WILL SPEND MORE THAN $8 BILLION ON COLD CHAIN LOGISTICS IN 2014 vi What does it all mean for 2015?
3 Emerging Markets Remain an Opportunity and a Challenge To date, there are more than 178,000 registered clinical trials taking place across the globe iv, and global pharma s volume has more than doubled over the last decade. With emerging markets showing explosive predictive growth through 2016, shippers and trial sponsors can expect continued regulatory and overall logistics complexities that foster demand for local, inmarket resources across the globe. Take China, for example. While the country is making strides in streamlining processes for shippers of all types of products with initiatives like batch clearing of waybills, pricing pressures from domestic transport providers meant that, in 2014, growth for non- Chinese logistics providers was somewhat slowed v. It s perhaps for these reasons that manufacturers worldwide are investing more in their supply chains. Pharmaceutical Commerce predicts a $15 billion increase in the global biopharma logistics THE BRIC NATIONS BRAZIL, RUSSIA, INDIA AND CHINA ARE POSITIONED TO ACCOUNT FOR MORE THAN spend between 2012 and 2018 vi. $ Specialty Logistics Outlook BILLION IN PHARMACEUTICAL SALES BY 2016 i
4 Risk Management Efforts Create New Stakeholders Quality departments within pharmaceutical manufacturers operations are gaining more and more influence in the selection of vendors from packagers to logistics partners. Why? Because supply chains hold inherent risk factors that are compounded when more money is invested in creating more efficient supply chains. And the spend that s going into logistics an estimated $64 billion in 2014 vi is no doubt capturing attention from new stakeholders. It s this risk-based approach that means manufacturers and their supply chain partners must focus on creating processes and leveraging tools that allow for increased visibility and effective management across the supply chain. THE RISKS ASSOCIATED WITH SUPPLY CHAINS ARE EVOLVING FROM A BACK- OFFICE CONCERN TO A PROMINENT POSITION ON THE BOARDROOM AGENDA ii Specialty Logistics Outlook
5 Logistics Partnerships Reduce Costs SHIPPER-3PL PARTNERSHIPS SHOWED AN AVERAGE If the logistics industry held a state of the union address, successful partnerships would be the takeaway. Shippers continue to report cost reductions from logistics partnerships and outsourcing and controlled logistics expenditures as they relate to total revenue. What s being outsourced? Domestic transport, international transport and warehousing rank at the top of the list of outsourced logistics services. Among shippers who utilize 3PL services, 80 percent say they outsource domestic and 70 percent outsource international transport ii. In the same survey, 67 percent of shippers reported they would increase their use of LOGISTICS outsourcing, while 53 percent will COST reduce or consolidate the number of 3PL providers they use. In response, logistics providers are ramping up efforts to increase their REDUCTION foothold as supply chain partners with everything from improved OF 9% technology to high-touch transport offerings and a focus on strategic alignment with manufacturers goals. IN 2014 ii Specialty Logistics Outlook
6 Workforce Management is an Emerging Priority The logistics industry is facing a couple of key challenges when it comes to talent: difficulty attracting talent and the evolution of the ideal logistics skill set. Industry estimates show a predicted shortage of 20 million professionals by 2015 ii. Coupling these challenges with the complexity of specialty logistics means manufacturers will not only be competing for talent with 3PLs, other industries and consulting firms, they ll also be tasked with finding outside partners who have the right blend of industry expertise and execution experience. SKILLED LOGISTICS MANAGERS ARE IN DEMAND BECAUSE OF THEIR ABILITY TO SPOT COMPLICATIONS AND CREATE EFFECTIVE SOLUTIONS ALL IN SUPPORT OF A COMPANY'S OBJECTIVES iii Specialty Logistics Outlook
7 Sustainability Enters Supply Chain Conversations Corporate Social Responsibility (CSR) covers everything from conserving natural resources and business impact on the environment to animal testing, human rights and labor practices. And while the issue of sustainability has been hot in the corporate world for some time now, CSR is proliferating such that it s now a supply chain consideration that touches packaging, transport and global relations. Sustainability-savvy manufacturers particularly those in agribusiness and other R&D fields will be looking for ways to transform their supply chains in more responsible ways. AS COMPANIES EMBRACE CSR, THEY ARE CHANGING HOW THEY ADDRESS TALENT MANAGEMENT AND THE INDIVIDUALS WHO OVERSEE SUSTAINABILITY ii Specialty Logistics Outlook
8 Temperature Control Evolves THE GLOBAL PHARMACEUTICAL INDUSTRY WILL SPEND Products that require temperaturecontrolled and monitor during transport. transport are, more and Manufacturers of these products more, moving into all temperature will benefit from an industry-wide ranges. From body temp to increase in packaging and storage ambient, innovation in R&D means innovation that enables reduced new temperatures to accommodate supply chain dependencies Specialty Logistics Outlook $8 MORE THAN BILLION ON COLD CHAIN LOGISTICS IN 2014 vi
9 World Courier World Courier is a global specialty logistics company that designs world-class logistics and supply chain programs in complete alignment with our customers business goals. Pharmaceutical companies rely on us because they value the peace of mind that comes with our unsurpassed knowledge, global reach and flawless supply chain execution. Each trusted partnership we form with a customer is deeply rooted in our shared vision of improving global health. With 2,000+ associates in more than 140 offices across the globe, we offer solutions that instill confidence in the on-time, on-temperature delivery of critical products. When trust is absolutely essential, there s only one choice: World Courier. worldcourier.com References i IMS Health. The Global Use of Medicines: Outlook Through July Available online at Content/Insights/IMS%20Institute%20for%20 Healthcare%20Informatics/Global%20Use%20of%20 Meds%202011/Medicines_Outlook_Through_2016_ Report.pdf. Accessed 7 November ii 2015 Third-Party Logistics Study. Available online at Accessed 14 November iii Vella, D. Supply Chain Management: A Needed and Growing Opportunity. Inbound Logistics. Available online at supply-chain-management-a-needed-and-growingopportunity/. Accessed 18 November iv Number of Registered Studies Over Time. ClinicalTrials.gov. Available online at clinicaltrials.gov/ct2/resources/trends. Accessed 17 November v Zakkour, M. Supply Chain Key to Success in China Outlook Forbes Asia. Available online at supply-chain-key-to-success-in-china-outlook-2014/. Accessed 17 November vi Lipowicz, M and Basta, N Biopharma Specialty Logistics Outlook cold chain forecast. Pharmaceutical Commerce. 29 April Available online at pharmaceuticalcommerce.com/index.php?pg=supply_ chain_logistics&articleid=27206&keyword=biopha rma-cold%20chain-logistics-forecast. Accessed 30 October 2014.
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