How Can Logistics Companies Help the Healthcare Industry?

The healthcare industry is under tremendous pressure to enhance customer service, material handling, and inventory management while lowering costs. Healthcare organizations must look for ways to save costs while maintaining the quality of patient care and clinical procedures, owing in part to decreased payments for their services.

Medical equipment are one of the most common targets for cost-cutting strategies, and many healthcare providers are requesting price reductions from device makers. Medical device and product producers must meet these requirements. Fortunately, some supply chain solutions can assist healthcare firms in meeting these objectives and overcoming these problems. Working with 3PLs (third-party logistics businesses) is the key to cutting healthcare expenses without sacrificing quality.

Meeting the Healthcare Industry’s Changing Requirements

Working with the proper supply chain partner has many advantages, including lower logistical expenses. Healthcare organizations, for example, MHRA approved warehousing UK can take advantage of the logistics provider’s existing infrastructure, superior technology, and faster processes if they have temperature-sensitive shipping requirements.

By decreasing inefficiencies and waste in their supply chains, medical manufacturers and health institutions can save money. They’ll have to make various operational and “cultural” changes to make that happen.

Improvements in operations

To begin, they must simplify their supply chain by lowering the number of touchpoints and minimizing product handling to the greatest extent possible. They will also need to boost openness so that items can be effectively monitored from the manufacturer to the patient. While this necessitates expenditures in product tracking equipment, the end result is a reduction in transportation costs in the long run. The next step will be for healthcare firms to set aside additional resources in order to fulfill expanding regulatory requirements and remain compliant.

The healthcare supply chain is one-of-a-kind, making it more complicated. Staying ahead of important regulatory changes that make compliance difficult is impossible without expertise in healthcare logistics. These changes are happening swiftly, and many 3PL companies have reported a significant increase in regulatory inspections of pharmaceutical supply and medical warehouses in the last five years.

Changes in culture

When we talk about cultural adjustments, we’re talking about aligning the healthcare supply chain’s culture to address new healthcare issues. To begin, the supply chain must be flexible enough to generate innovative solutions that can support the rising shift in healthcare from hospitals to more cost-effective places (e.g., patients’ homes).

In order to be more intelligent, supply chain decision-making must also be driven by data. This necessitates a more sophisticated application of new techniques and innovations in order to produce clear demand signals that optimize inventory levels. To build more successful transportation and warehousing plans, supply chain partners should discover methods to collaborate more. The healthcare supply chain must be nimble and flexible enough to handle frequent changes in regulatory compliance, product complexity, points of care, warehousing, and transportation.

Ways for Logistics Companies to Improve Service to the Healthcare Industry

Combining best practices into a unified logistics plan, while challenging to adopt, is critical to success in the fast-changing world of healthcare. Here are some examples of how working with a logistics provider might improve healthcare quality:

1. Taking advantage of 3PLs or multi-tenant warehouses to increase efficiency

Medical device warehousing has been plagued by inefficiency and waste. Each company constructs its own warehouses and supply chain infrastructure, which are typically overcapacity from the start. Warehouses may only be 60-70 percent filled at any given time, but they must cover 100 percent of their infrastructure expenditures. Some manufacturers may have two warehouses within a few miles of one other, or multiple firms in the same location, all with half-filled warehouses. These methods are unsustainable in the face of rising costs.

Third-party logistics companies might supply their own warehousing services or assist in the consolidation of a company’s warehousing (combining inventory from several manufacturers in a shared or multi-tenant healthcare facility). This would prevent any unnecessary costs, which is crucial in the healthcare industry. Because industry regulations are always changing, it is more cost-effective to keep products in a shared facility and share regulatory costs with others.

2. Technology is readily available

Healthcare firms can gain access to the technologies needed to automate and streamline their supply chain by employing a reputable third-party logistics provider. Your 3PL can withstand maintenance expenses and handle the upfront expenditure because they are equipped to share their technology with several clients, passing the savings on to you. Real-time order tracking, data analysis, reporting tools, route and consolidation optimization tools, freight audit and payment solutions, and transportation management systems are just a few of the useful technologies that a 3PL may supply (TMS).

Because the health and life of patients are dependent on particular products, it is vital to keep surplus inventory on hand. As a result, healthcare professionals frequently demand high fill rates. 3PLs can assist in achieving the highest degree of inventory availability by providing complete visibility and tracking of products from one end of the supply chain to the other.

3. Freight consolidation across manufacturers

The majority of freight in the healthcare industry is handled via LTL (less-than-truckload) services, which means that trucks are rarely fully loaded. Third-party logistics companies understand that the most cost-effective approach to convey freight is to combine shipments from several shippers whose goods are bound for the same destination. Furthermore, compared to the traditional LTL approach, consolidating freight implies fewer product contacts, which means fewer potential claims and damage, resulting in less losses and shortages.

4. Expertise in the industry and in operations

A healthcare logistics third-party logistics service is familiar with industry best practices. They are aware of the policies regarding pick-up and delivery periods, order configuration, equipment, and scheduling, among other things. They know how to express the needs of healthcare companies to insurance carriers. This can have a significant impact on performance. In addition, your 3PL has developed many industry ties and transportation experience in your business, which can benefit your overall operations.

5. Availability of network capacity

Before handing over a product to a driver or ordering a product from a manufacturer, a healthcare institution must confirm that it is in the appropriate hands. You can rely on your 3PL partner’s already vetted, established carrier network since assessing carriers for qualifications, insurance, and equipment is a serious job. Because of their competent network, third-party logistics providers can assist you in securing more capacity. If a 3PL is not asset-based, it maintains relationships with hundreds or even thousands of drivers and has a diverse carrier base. 3PLs have access to a wide range of solutions and possibilities thanks to their diverse network, which can save you a lot of time.

6. More time to devote to vital tasks

You have more time and money to focus on giving the finest possible care to your patients (if you’re a health practitioner) or delivering medical items and devices (if you’re a manufacturer) when you let a third-party company handle your logistics. To execute your supply chain management operations, a third-party logistics provider can assist you reduce the need to invest in employees, technology, warehouse space, and transportation. Staffing, auditing, optimizing, training, and developing various supply chain operations will be handled by your 3PL partner. The following are some of the tasks that a 3PL can help you with:

• Communication between the driver and the facility
• Management of problems
• Tracking of orders
• Scheduling appointments
• Choosing the proper service model and supplier and making a reservation
• Reporting on performance
• Invoices and paperwork


Healthcare firms can benefit from third-party logistics providers’ assistance in establishing an effective supply chain, saving time and money. Implementing some (or all) of the techniques we’ve discussed is difficult, and you’ll need to make operational adjustments, such as allocating more resources to compliance, boosting transparency, increasing supply chain visibility, and becoming more streamlined. Healthcare businesses will need to become more agile, collaborative, insightful, and flexible in order to accommodate operational changes.

Hiring a 3PL will help you improve your services in the long run, therefore it’s well worth the effort. Given the rising demand on healthcare institutions and medical-product makers to save costs, the supply chain can be viewed as a source of additional savings and efficiency by enhancing logistics.

If you’re looking for a 3PL partner, make sure they’re forward-thinking. The services you require in 12-18 months may differ from what you require today. Make sure you hire someone who is prepared to deal with your industry’s changing needs.

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Jerome Dodson