Logistics

                    FESTEL CAPITAL

Outsourcing of Logistics for Finished Goods in Healthcare
(Pharma, Medical Devices)

Background

Logistics in Healthcare (pharma, medical technology) is going through a phase of change.

At the end of 2003/beginning of 2004, FESTEL CAPITAL conducted an interview-based market study to obtain a better understanding of the future trends and success factors with regard to the outsourcing of logistics.

Summary of the results of the market study

Core Messages

  • The significance of logistics in Healthcare (pharma, medical technology) is increasing due to the rise in cost pressure on standard healthcare products and the high quality demand on top healthcare products.
  • The share of outsourcing with regard to transport is currently almost 100% and storage is approx. 50%, but this is expected to increase to around 80% mid- to long-term.
  • Even though additional factors such as flexibility and expertise influence the decision to outsource, the cost factor plays the deciding role
  • The cost saving potential through outsourcing varies depending on the healthcare area (in terms of turnover: from 0.1% for ethical medicines up to 0.5% for medical devices).
  • The level of quality is very important especially for high-priced products such as ethical medicines and must be guaranteed by the logistic service provider.
  • Necessary personnel measures hinder outsourcing, therefore outsourcing solutions where a transfer of personnel to the service provider could be helpful.
  • Mid-term,  new logistics structures in healthcare will develop due to the rise in outsourcing and additional factors such as concentration of wholesalers, the forming of larger chemist chains and increasing  internet mail order for medicines.

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