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Download the white paper, “Creating a Better Healthcare Cold Chain,” to see how UPS can help transform your health care cold chain.

Finding the right high-quality logistics provider that will help ship your products safely and cost-effectively isn’t always easy, but the potential rewards are simply too great to ignore.

Consider these five perspectives to help overcome doubts about outsourcing your temperature-sensitive supply chain:

Misconception #1: “They don’t understand our operations”

You understand your health care products, but is your team up to speed on optimizing your packaging and shipping requirements? Does your company have monitoring and intervention capabilities that can help minimize product losses and delays?  Among health care logistics executives surveyed in the most recent UPS “Pain in the Chain” survey, 46 percent said regulatory requirements involving temperature-sensitive packaging are driving costs.

“Logistics executives can choose to provide their own company’s infrastructure at the expense of capital,” said Tom Heavrin, health care QA manager at UPS, “or they can simply plug and play with a 3PL that already has all assets and expertise in place.”

For many companies, it’s more cost-effective to engage a 3PL that already knows the ins and outs of the industry. Health care logistics experts like UPS have transportation assets, fully compliant cold-chain infrastructure and solutions in place worldwide that can help health-care companies lower expenses.

Misconception #2: “I need to maintain control over my products”

No one can control all the variables. When weather goes wild, or infrastructure in some distant market lets you down, well-made plans can go astray. Are you prepared for the cold-chain complexities that often pop up in distant, emerging markets?

“The more diversity you have in a network, the harder it is,” said Wanis Kabbaj, director of health care strategy at UPS. “Supply chains that work perfectly well in the U.S. can’t be expected to work as well in markets that have different characteristics.” In addition, as supply chains have grown longer and more complex, maintaining control has become more difficult. And impractical: 48 percent of health care logistics executives surveyed said new market expansion has driven up costs.

Partnering with a world-class 3PL makes competitive sense because it accesses experts who know how to efficiently move goods across suppliers, vendors and customers. It also offers a level of control that previously may have been lacking. Using a 3PL like UPS, for instance, lets health care customers leverage a global network of storage, transportation and strategically-located warehouse and distribution facilities to help preserve product quality end-to-end.

Misconception #3: “3PLs over-promise and under-deliver”

You may know of colleagues who used logistics providers that claimed to have cold chain infrastructure but suffered significant failures. It’s important to rigorously vet prospective transportation partners to be sure you are working with a quality service provider. Among companies that use 3PLs, 73 percent say their logistics provider provides innovative ways to improve supply chain effectiveness.

“The truth is, the combination of both an integrated network (that is owned by the logistics provider), combined with the ability to develop solutions from a virtual network is better than either option by itself,” said UPS’s Kabbaj. “Plus, you can utilize a single point of contact at that 3PL to make all of these things happen, which is significantly more effective than managing multiple vendors.”

Misconception #4: “Outsourcing is expensive”

Providing services that maintain quality has associated costs, to be sure. But when quality improves in other areas through the efforts of your 3PL, total costs may be lowered. Fewer products are spoiled, supply chains operate more efficiently and overall the investment can translate into savings. In the latest UPS “Pain in the Chain” survey, nearly seven in 10 North American health care logistics executives identify “logistics and distribution partnerships” as a way to successfully manage costs.

Misconception #5: “Vendors don’t really understand cold chain QA requirements”

If you have recurring problems along your cold chain, it’s likely either that the vendor is not the right one for the job, or the challenges are so complex that the vendor’s capabilities and limitations can’t be accurately assessed. Either way, the experience may leave you unwilling to embrace a 3PL—despite the benefits.

The best approach is first to understand your needs and then identify who can work with you to deliver better results. It’s worth it: 73 percent of North American health care executives surveyed cited “partnered with a higher quality carrier” as a strategy that reduced product damage and spoilage, meaning lower costs.

“UPS has a health care-dedicated QA team that can identify risks, collaborate on documented training, standard operating procedures and contingency plans—upgrading requirements and auditing shipments as needed,” Heavrins said. “By establishing an independent health care-dedicated QA group at UPS, we have, in effect, provided our clients with a system they don’t have to create for themselves.”

Choose your partners carefully

At least 25 percent of all health care products today are temperature-sensitive. Cold chains are growing at twice the rate of other shipping. The rewards of seeking expert, outside help far outweigh any potential risks. Start with an analysis of your cold chain, and then choose carefully.

See why it makes sense to outsource your healthcare cold chain to UPS.

Learn more about how UPS can keep flowers fresh, from farm to florist.

A holistic view of the supply chain–one that considers potential tradeoffs between both upstream and downstream processes–is among the few ways that manufacturers today can find meaningful efficiencies that help them accelerate toward the future. In fact, it’s possible that changes can pay for themselves, and can help get them better positioned for the future.

Monster Moto, a Ruston, La., maker of popular mini bikes and go-karts is a great example.

The big picture

Not long ago, Monster Moto managed manufacturing and assembly in China because of the efficiencies promised by more available and affordable labor. But after Monster Moto worked with UPS to analyze its entire supply chain, a critical insight emerged: It would be more efficient to ship its parts from China to the United States for assembly.

“A single ocean container could hold 219 completed mini-bikes,” said Alexander Keechle, Monster Moto CEO. “If the units were unassembled with engines in one container and frames in another, we can surely surpass 219.” He added, “If all we achieve is a 50 percent increase, up to 330 units, our transportation cost will go down.”

Monster Moto opened a new, 100,000 square foot facility from which it warehouses, assembles and ships products to dealers and consumers. While inventory management may be more challenging when dealing with parts and components rather than assembled products, the transition has paid off with dealers and customers.

“With parts on hand, we can switch things out a lot faster because the inventory is more interchangeable,” Keechle said.

Know when to make tradeoffs

Monster Moto’s experience demonstrates the value in taking a broader view of supply chain “give and take.” Its decisions may have brought the challenges of reshoring and a modified operating model but resulted in net, tangible benefits to the company and its customers.

The tradeoff may be less clear for others, however. A digital age has brought consumers and business buyers to the virtual doorstep of manufacturers, ready to transact. Goods makers are at a crossroads: Should they continue selling only through intermediaries or potentially harm longstanding relationships in order to meet direct-buying demand?

These days, that is not necessarily an either/or answer.

“The digital landscape has changed the way both businesspeople and consumers want to buy,” said Brian Littlefield, director of marketing strategy at UPS. “Brands are wise to capitalize on demand where it happens organically.”

However, Littlefield added that a company just starting to sell direct is usually not set up to deliver the level of service that intermediaries provide like sales support, special pricing or returns. An easy and customer-friendly online experience is also crucial as are a wider variety of options for shipment sizes, modes and delivery speeds.

The infrastructure needed to deliver on customer expectations can be unaffordable for many without making sizable shifts in other areas, whether financial, operational or both. UPS’s Littlefield suggests that companies call on their business partners for a thorough analysis of their entire supply chain to see where gains can be made.

“With things moving as quickly as they are, tapping into the expertise of suppliers and partners can lead to breakthrough ideas that can help you set loftier goals and achieve them faster,” he said.

Capture your supply chain’s full potential

Sometimes opportunities found in supply chain analysis cost very little but have a profound impact. For example, setting new business rules may prevent unnecessary expedited shipments from happening across multiple continents; contracting for 3D printing of low-demand parts could reduce carrying costs and make room for faster-moving SKUs.

Realistically, though, many of the changes needed to thrive in this day and age require capital investment in equipment and technology, and human capital investments for staffing or training. Still, few companies realize that a holistic supply chain analysis may lead to insights that can help to offset the cost of needed investments.

Take for example five of the most used Key Performance Indicators in supply chain management:

• Production
• Inventory management
• Warehousing
• Transportation
• Supply chain risk management

Now imagine the wide-ranging impact possible from approaching risk management differently. For example:

Company A operates at a 5 percent margin. In the past, they had self-insured against bad debt. Therefore, if a customer went bankrupt, leaving $100,000 in uncollectable debt, Company A needed cash reserves to cover operating expenses, and then had to generate $2 million in topline sales to recoup the loss. It also risked falling short of revenue and profitability projections.

If Company A had purchased trade credit insurance—from UPS Capital, for instance—to cover the majority of a loss from qualifying bad debt, its cash reserves would have been relatively unaffected and available for investment. That single step may have cost very little but could bolster Company A’s ability to adapt and grow into the future.

Consider also the potential of third-party services to help fuel growth without major capital investment:

A vital customer of Company A needed it to locate a distribution facility closer to a supplier in another country. When this happened previously, Company A reassigned an internal team to conduct due diligence on purchasing, building-out and staffing the warehouse.

In two years, with $5 million invested in equipment and IT infrastructure, the facility was running. But, in the meantime, the customer had begun to dual source to keep operations moving. Although that caused a temporary loss for Company A, its breakeven point stretched out more than two years. Productivity slowed on enterprise strategic initiatives while key team members were reassigned to setting-up the new facility.

When it came time for Company A to meet the second customer request, they enlisted help from UPS, who was already operating facilities in the customer’s desired location. In just over six months, with no capital outlay, Company A’s warehouse was up and running. Its breakeven point and opportunity cost was low from outsourcing physical ramp-up and staffing.

The potential game-changers in Company A’s future were as elemental as an insurance policy and third-party services. And, more are out there for the taking. Partnering with a knowledgeable supply chain advisor such as UPS can help a company take a holistic view of its supply chain, and spot the potential game-changers in its future.

Winning in business starts with a winning supply chain and logistics network. See how UPS can help transform your supply chain.

Looking to extend your global reach? Discover how UPS supply chain experts can help you successfully navigate customs and deliver across borders worldwide.

The UPS Pulse of the Online Shopper™ Study showed that 85 percent of its avid online shoppers surveyed had visited an online marketplace in the past year. And consumer preferences for online marketplaces such as Amazon, eBay, Newegg, Etsy and newcomer Jet have made them well-established sources.

Although these marketplaces vary widely in scope, popularity and what they sell, they all work in more or less the same way—curating goods from a variety of sources, and then selling them on a pay-per-transaction or subscription-fee basis, or one that combines both methods.

Why are business shoppers so unmoved by B2B marketplaces? The less-than-seamless nature of many B2B sites may be partly to blame. To improve the attractiveness of B2B sites, a recent Bain & Company brief suggested that “the key opportunity might be to mimic the smooth and efficient business-to-consumer (B2C) customer experience that retailers like Amazon and Zappos have made commonplace.”

One company that operates a B2B site that is succeeding in this space is Global Industrial, which features the same integrated, user-friendly purchasing processes used by B2C sites. Alibaba, China’s behemoth e-commerce company—and, as of April 2016, the world’s largest retailer—is another strong example. The company’s website provides a B2C-like shopping experience for a previously overlooked cohort.

To meet the needs of customers, B2B marketplaces are under pressure to improve efficiency in areas from warehouse management to last-mile delivery. Supply chain visibility—even transparency—is critically important. The good news is that, by applying the data-gathering infrastructure of the Internet of Things (IoT), which can link all phases of a warehouse operation into one long chain, attaining that visibility is more possible than ever. Providing customers with real-time information about inventory and accurate delivery time estimates are critical to establishing credibility.

Web-connect devices and technology such as temperature sensors that enable IoT are proliferating: Gartner predicts that there will be 25 billion of these connected nodes by 2020. About two-thirds of these will contain embedded radio-frequency identification (RFID) sensors that can track the progress of items as they move along global supply chains.

As the price of these sensors falls, production, supply chain, fulfillment and sales will, increasingly, be monitored in real time. The resulting end-to-end transparency may well open up new relationships. Point-of-sale data, for example, might inform production schedules; prices could fluctuate as the cost of raw materials changes.

The explosive growth of e-commerce will increase the pressure on fulfillment networks. Innovative technologies may help address this challenge: in particular, warehouse automation is gaining traction as a productivity solution. Autonomous mobile robotics systems—in other words, robots with the capability to sort, store and move products in warehouses, for instance—are being developed both by startups and established warehouse automation providers.

One key trend in the healthcare industry is the utilization of more forward-stocking facilities that better serve consumers by placing products closer to the demand for them and can help provide better patient outcomes.

UPS, for example, recently opened a 208,000-square-foot, healthcare-compliant distribution and warehousing facility in New Jersey. This new multi-client hub offers comprehensive services—including inspection, replenishment and sterilization capabilities that can help implantable medical device companies operate more efficiently—and with less inventory.

In addition, the extensive UPS network allows healthcare manufacturers and distributors to reach more than 80 percent of hospitals in the United States within just four hours.

As B2B marketplaces improve their appeal and better utilize supply chain information to become increasingly transparent, it appears likely that B2B buyers and procurement teams will come to rely upon them much more than they do today, and that manufacturers will increasingly come to utilize these new sales channels.

]]> http://www.washingtonpost.com/sf/brand-connect/B2B-marketplaces-retool-to-better-serve-customers/feed/ 0 http://www.washingtonpost.com/sf/brand-connect/wp-content/uploads/sites/3/2016/07/Picture1.png http://www.washingtonpost.com/sf/brand-connect http://www.washingtonpost.com/sf/brand-connect/wp/enterprise/surpassing-customer-expectations-3/ http://www.washingtonpost.com/sf/brand-connect/wp/enterprise/surpassing-customer-expectations-3/#comments Wed, 01 Feb 2017 21:53:25 +0000 http://www.washingtonpost.com/sf/brand-connect/?post_type=enterprise&p=4831 Customers expect great service from every industry they encounter. Melissa Baird, director of product & operations at online retailer Bonobos shares what it takes to make a personal connection with online customers and create loyal shoppers. And Derrick Johnson, vice president of corporate segment marketing at UPS describes the many ways companies can innovate from a logistical perspective to help maintain that customer relationship—from returns to repeat purchases.

Discover what it takes to meet your online customers’ expectations. Download the latest UPS Pulse of the Online Shopper Study.

It’s sometimes difficult to tell the difference between organizations that employ disruptive thinking and those that are just playing catch-up. What does seem clear, however, is that groundbreaking ideas may find their most fertile fields in middle market companies, where organic change is often easier to effect.

Businesses of all shapes and sizes are learning to marry innovative culture and a more effective framework for execution with an improved focus on customer service and satisfaction. Here are four traits that characterize those highly disruptive companies and offer some signals for how organizations may position themselves for transformative change.

1. Shift your focus from “inside out” to “outside in”

Seeking inspiration outside your organization is a healthy impulse, but you may already have planted some seeds of creative disruption. All that’s needed is a fresh, customer-centric perspective. The solution? Become your own customer. “No idea is completely original,” said Debra Kaye, CEO of Lucule, an innovation consultancy. “When we work with clients, we ask them to give us their old concepts. Products they tested where something went wrong. Or maybe the idea was just before its time.”

Cloud-based collaboration app Slack wasn’t the first chat service aimed specifically at business, but since its February 2014 launch, user numbers have ballooned to 4 million per day. The company’s seamless integration of multiple services answered an unfulfilled customer need and, in the process, raised $340 million in funding.

Combining the best of Facebook, Twitter, iMessage and Dropbox, Slack created a chatty bot that could be custom coded and programmed to interact with users and facilitate tasks, turning it into a platform where employees wanted to hang out at work.

2. Innovative cultures start with innovative values

Risk-taking needs to be contextualized as a process for learning from mistakes and making missteps in the service of improvement. The potential advantages of private middle market companies in this climate are clear. If working with discretionary capital, they have more leeway to take calculated risks. They are often more agile than their larger, public rivals, and can effect the sort of end-to-end transformation to which the best forms of disruptive thinking often lead.

There is a storied history of failures that later have turned into transformative innovations. The ubiquitous Post-it note evolved from the failed attempt by a chemist at 3M to develop a super strong adhesive for the aerospace industry. The inadequately sticky substance had the ability to re-stick a number of times, and facilitated the handy little yellow squares.

There is also Apple’s Newton tablet, which was simply a flop that never went anywhere. The key difference is a corporate culture that not only can move on from such disappointments, but has as well the vision to see the wider field of possibilities.

Employees increasingly prize work environments where their ideas are valued and they aren’t sanctioned for coloring outside the lines. A culture that promotes failure as a healthy signpost on the road to innovation is considered essential in the majority of today’s leading tech companies.

3. Explode your view of “the company”

In an era of steadily increasing customer expectations, looking for extensions of your business is a must. Businesses that break out of conventional bounds tend to see themselves as bigger than they are. Taking an extended view of what constitutes the “company” opens the door to innovations from unexpected quarters.

An exploded company view can mean drawing on suppliers to cultivate innovative ways of improving business and serving customers better. It can also mean using supply chain optimization, improved supplier and contract logistics and streamlined management to scale up or down more cost-effectively.

Unilever followed this plan when it launched a website to gather and assess ideas from outside the company. The project enhanced receptiveness to customer needs and bolstered sales from new products. Unilever queried universities, engineering and design companies and environmental groups for new ideas. Since its so-called open innovation unit began to connect with outside partners in 2012, the company’s business units adopted 60 percent of the external ideas submitted within just the first two years, up from 25 percent.

4. Think ahead. Way ahead.

Business may be a hard-nosed affair, but giving your company free rein to dream about the future may end up to be a great brainpower investment. Home delivery of goods has, for example, gotten faster and faster, but same day delivery was a threshold that wasn’t crossed until recently. While big names have gotten major attention for getting into the same-day business, smaller companies were early pioneers in this concept. For example, in the early 1990s, Peapod transformed a family-owned delivery service in the Midwest into a national operation that now services a number of large regional grocery chains.

Highly disruptive companies never stand still, and they share more than these four traits. Above all, they are also relentlessly inventive. Uber, Apple, Slack, Unilever, and every other company that has made a point of reframing a category or creating a business see continued innovation as the way to stay ahead of the competition. Remarkably, they even managed to anticipate unexpressed customer expectations. That’s where the greatest potential is to be found.

Discover what it takes to make your company more customer-centric. Download the UPS Pulse of the Online Shopper Study.

Canada is the United States’ number-one trading partner, accounting for $575 billion in annual, bidirectional goods trade in 2015. Mexico is second, with $531 billion in goods crossing the border each way last year. Cross-border commerce adds up to unprecedented opportunity for U.S. exporters.

Enhance your global trading success with strategies and tips from supply chain experts at UPS.