The Healthcare Logistics industry is a rapidly growing sector of the healthcare world. Healthcare logistics providers are an integral part of the supply chain, overseeing and coordinating all aspects of medical product transportation.
Healthcare logistics organizations provide many different services that healthcare manufacturers and shippers need for safe and reliable transportation, including warehousing, distribution centers, cross-docking facilities, load consolidation, inventory management systems, quality control measures for shipments, and more.
In this guide, we will examine what healthcare logistics is and how medical logistics providers can help those operating in this industry. We will be reviewing the benefits of healthcare logistics organizations and how these third-party logistics companies help medical device manufacturers and shippers in the healthcare industry.
What Is Healthcare Logistics Management?
Healthcare logistics refers to the act of planning, handling, and overseeing transportation activities for healthcare goods. Healthcare logistics management usually requires a team that includes drivers, warehouse personnel as well as managers who are responsible for quality assurance.
To better put things into perspective, we can compare logistics management with the supply chain. Simply put, the supply chain is a network of interconnected businesses, operators, service providers, and other stakeholders that engage with the supplies being shipped from the manufacturer through to the final healthcare customers.
Supply chain management aims to connect all those networks and organize an efficient end-to-end strategy that improves routing speed and reduces cost without decreasing the product’s value or quality.
Healthcare logistics is a subcategory of supply chain management, and it primarily deals with the transportation and distribution of medical devices from manufacturing to hospitals or healthcare facilities. Healthcare logistics managers are responsible for coordinating all the various processes that need to be completed in order to ensure the safe delivery of these health care goods.
Logistics provides accounts of the complex transportation of a product and ensures this shipping is quick, safe, and reliable. The third-party logistics service for the healthcare industry focuses on the flow of information and products from suppliers to healthcare customers throughout the manufacturing processes.
Logistics can be a component of an overall supply chain, aiming to move products efficiently.
Setting up a supply chain that effectively manages this end-to-end approach is the best way for healthcare organizations to minimize costs. When organizations have an effective supply chain, stakeholders and partners are better at collaborating. This facilitates innovations for logistics solutions that can handle any challenges the supply chain may face.
The Importance of Healthcare Logistics Healthcare
Statistics indicate that clinicians and other healthcare providers spend twice as much time as they can afford on supply chain-related tasks. In doing so, they spend less time on their patients, decreasing their quality of service. In addition, around 20% of clinicians say that supply chain tasks are adding to their already stressful jobs.
Too many non-value-added supply chain tasks were also shown to contribute significantly to employee turnover and decreased job satisfaction. An increasing number of healthcare professionals on the front lines feel that they cannot solve these logistics and supply chain issues, which further puts a strain on their job satisfaction.
Over 66% of clinicians and hospital supply chain decision-makers have said that supply chain issues are a significant source of staff frustration. Likewise, around 94% have also said that their logistics and supply chain management is strongly tied to their financial success.
For this reason, many are looking to partner up with suppliers and distributors that are willing and able to play a more prominent role in the logistics process.
The Benefits of Healthcare Logistics
Healthcare logistics can provide many benefits to those operating in the industry. Unlike traditional logistics, there are several types of services that are specific or are useful whenever transporting or warehousing medical products, components, devices, or pharmaceuticals.
Healthcare logistics can significantly increase efficiency in the medical supply chain and often leads to lower manufacturing costs. Healthcare logistics providers are invaluable when it comes to managing inventory, shipping products at a faster rate, or helping with compliance and quality assurance issues that may arise on site.
Some of the benefits include:
- Healthcare Logistics helps reduce operating expenses through cost savings from faster shipping and less expensive transportation.
- Healthcare Logistics can help with compliance issues, such as recalls or maintaining correct inventory levels by providing additional space for storage. Healthcare logistics providers often provide the necessary infrastructure to ensure that these products meet international standards.
- Healthcare Operations has been growing in recent years due to changes in how healthcare is delivered to patients, and Healthcare Logistics can help support Healthcare Operations by offering a full range of services.
- Healthcare logistics providers have been seen as the solution to many challenges in healthcare. Healthcare logistics is an integral part that helps organizations maintain their competitive position and meet customer expectations.
- Healthcare logistics providers are also more cost-effective than hospitals or clinics trying to set up their own in-house Healthcare Logistics operation.
- Healthcare 3PLs offer a range of packaging, storage and distribution services to healthcare manufacturers and shippers in the Healthcare industry. These third-party logistics companies provide clients with customized solutions that help them solve their specific challenges and helps deliver safe shipments of medical devices worldwide.
Medical logistics has transformed from simply transportation to packing, transporting, sorting, and even claims processing. Healthcare product transport companies provide medical logistics with specialized healthcare product fulfillment services such as temperature-controlled shipping for sensitive products like vaccines or biohazardous waste disposal, among other specialized and customizable services.
Other specialized healthcare logistics services include things like new machine installations, critical parts solutions, white-glove services, inside deliveries, and more.
Simply put, healthcare logistics can help healthcare manufacturers and shippers increase their efficiency, decrease costs, reduce errors in shipping processes, and provide specialized logistics solutions for medical product fulfillment or transportation of fragile materials with proper handling by trained healthcare professionals.
How to Streamline Healthcare Logistics
Healthcare logistics are plagued by many challenges, such as safe and reliable transportation, storage management, inventory management, and waste management.
Physicians are faced with time-consuming, manual procedures, skyrocketing labor costs, and a lack of storage space. Building an alternative logistics solution, in this case, can be challenging.
Below are several challenges and solutions in healthcare logistics.
Better Inventory Management
Inventory shortages and also excess happen due to the unpredictability in the medical product market. Manufacturers must also consider how to manage the company’s production cycles with patient demand patterns. Slow-moving products and long lead times can lead to high levels of supply chain visibility.
However, supply chain technology will allow medical manufacturers to track what products are on-hand and what needs to be supplied. When medical device manufacturers and shippers have access to updated data that showcases the transparency in healthcare logistics, the costs of mistakes are reduced.
With this trend that 3PLs can provide, organizations will be able to abolish the need for excess inventory building thanks to increased visibility.
Overnight Product Shipping
The costs of overnight shipping can add up over time, and high expectations for delivery times make things worse.
To meet the demand for overnight shipping, healthcare organizations experience higher costs. Furthermore, supply chains are usually built with just one process in mind, so alternative methods that allow for demand changes and the elimination of inventories could be more efficient.
The solution to this problem is a decentralized warehouse network that allows for effective and faster delivery of medical products (even in urgent situations). With logistics partnerships, healthcare organizations can evaluate the efficacy of various modes of transport and adopt a safe and efficient shipping model. Inventory is decentralized, which reduces the need for frequent and large shipments.
Manual processes and limited supply chain visibility lead to increased logistics costs and increased risks of errors, oversights, and delays. Organizations are failing to reap the benefits of data-based decision-making because they rely on manual data management and entry, leading to higher labor costs and a higher risk of inaccuracy. In the healthcare industry, we face a lack of data standardization including data processes, interchange, and capabilities.
Reducing healthcare costs is one of the many benefits of automating manual processes. Third-party logistics providers will automate many tasks in the warehouse, such as purchase orders and invoices. The 3PLs have the expertise to easily automate these processes, which is why it’s essential that manufacturers establish partnerships and can legally rely on them.
Which Technologies Improve Healthcare Logistics?
Today’s technology is rapidly progressing. With this progress, innovative solutions addressing the main pain points in healthcare logistics are constantly emerging. Medical device manufacturers and shippers can use technology to help them manage their supply chain. Among these technologies, we can include:
- Shipment and product tracking tools – these tools are an essential requirement for any medical device manufacturer and shipper. These solutions allow companies to track their goods across the supply chain, from production or warehouse to final destination.
- Electronic data interchange systems – EDI is a viable solution in healthcare logistics as it allows enterprises to exchange product information automatically with trading partners utilizing computer-to-computer connections.
- Logistics optimization tools – also known as logistics control technologies, these tools help medical device manufacturers and shippers reduce their logistical footprint by increasing warehouse productivity and reducing transportation costs.
- Real-time pricing and freight booking tools – real-time pricing tools allow logistics managers to analyze and adjust their contracts with carriers in real-time, while freight booking systems can optimize the transportation of goods by compiling multiple orders for a single shipment.
- Warehouse Management Systems (WMS) – Healthcare manufacturers can benefit from WMS solutions that provide real-time visibility into their warehouse operations and help them quickly identify and correct any inefficiencies.
- Transportation Management Systems (TMS) – These systems can act as control towers for the entire healthcare logistics operation, allowing shippers to manage crew schedules, carrier contracts, and fuel consumption.
How 3PLs Help With Healthcare Logistics?
Healthcare logistics providers are primarily in the healthcare industry to help with transportation. Healthcare is a vast industry, and it has many complexities, such as the high volume of goods being shipped between warehouses or hospitals.
Healthcare logistics companies have devised new ways for these medical device manufacturers and shippers within the healthcare industry to transport their goods safely and reliably without growing too bogged down into the intricacies and complexities of healthcare logistics.
Healthcare transportation providers have the knowledge and expertise to help medical device manufacturers coordinate reliable transportation with carriers like trucking companies or freight forwarders and handle all paperwork for customs clearance.
Companies often outsource some inventory management duties to these third-party logistics partners, such as warehousing large quantities of goods in an efficient way to minimize their costs and risks. By working together with a specialized 3PL, healthcare professionals will experience the following benefits:
Access to State-of-the-Art Logistics Technologies
Third-party logistics companies have the needed technology to streamline your supply chain, and as their partner, you gain access to it. They are a more automated and streamlined supply chain management, with improvements in the transportation management system (TMS), freight audit and payment, and route selection optimization tools.
Having a half-filled warehouse can be problematic because you will need to fix up the entire infrastructure as well, even if it is not being used. Third-party logistics companies have their own warehousing infrastructure or can help you store your products in a shared facility. This solution will provide you with a more efficient and cost-effective way to eliminate unnecessary expenses.
Specialized Logistics Know-how
By working with a healthcare 3PL, you will have access to their logistics expertise. If you are not following the best practices and trends in healthcare logistics, then engaging with a medical supply 3PL that specializes in healthcare is most beneficial. Third-party logistics companies have a vast network of partners to meet your needs and they understand what’s important to you.
Access to a Qualified Carrier Network
If you are new to healthcare logistics, then partnering with a third-party logistics company that specializes in this area will help your business grow more quickly. Healthcare manufacturers and shippers want the same thing: quality service providers who have access to qualified carrier networks within their industry.
Third-party logistics companies often maintain relationships with hundreds of carriers. This array of potential options means that you can entrust your products with a third-party logistics company, safe in the knowledge that they will be looked after by an effective and reliable carrier.
Medical device logistics providers can help medical suppliers and medical shippers deal with the many time-consuming tasks that fall under healthcare logistics, leaving employees to focus on the most critical work – delivering devices in a way that puts patients first. Healthcare logistics companies have the experience needed to carry out the tedious tasks required of healthcare providers.
How to Choose the Right Healthcare 3PL
Choosing the right healthcare logistics provider will ultimately boil down to the exact needs of every organization. That said, there are several key aspects that these 3PLs need to have, which are usually indicative of high-quality service. Among these, we can include:
- Healthcare logistics providers must have a track record of success in the industry. This includes experience in every facet of healthcare logistics, from manufacturing to distribution and, more recently, reverse logistics.
- Healthcare logistics companies need strong relationships with suppliers as well as customers, including those within different industries such as pharmaceuticals or medical devices.
- Healthcare organizations should look for logistics providers that are capable of increasing the visibility of the supply chain. The best way of doing this is through real-time tracking technology.
- Healthcare logistics service providers also need to be FDA certified to ensure that all products are handled and stored safely.
- Healthcare organizations should look at logistics providers who offer customized solutions for every facet of healthcare logistics, right down to the smallest detail.
- Logistics providers also need to be able to project manage complicated and time-sensitive projects. Healthcare organizations should consider how well their potential provider is suited to handle such situations.
- Another selection criterion is the 3PL’s reverse logistics services and whether or not they deal with returns.
- Whether or not the 3PL offers additional white glove services, inside deliveries, machine installations, other such critical parts solutions, and more.
In this age of increasing global demand for healthcare, the need for logistics in the sector is also soaring. One approach to this problem would be to establish partnerships with different 3PL providers and other trading partners to smoothen the business. This will also help prevent any additional hiccups that may arise during contracting logistics companies. Healthcare providers are relying on logistics providers to keep up with changes in global trade laws and regulations.
Healthcare logistics companies are being employed more and more in the healthcare industry to help those involved transport their goods. It helps with time savings, a reduction in errors in orders, and better quality of the product.
To conclude, the benefits of healthcare logistics are long-lasting and wide-ranging. Healthcare organizations need increased flexibility, responsiveness, scalability, resourcefulness, and trust. Redbird Logistics is one such professional healthcare logistics provider that can help with these needs. We have the right tools, infrastructure, and know-how to help healthcare organizations achieve the best of their logistical potential. Contact us today for more information.