7 Best Practices in Healthcare and Life Sciences Transportation Spend Management
Healthcare and life sciences is one of the most complex and intricate supply chain practices globally. When your products save lives, quality and timely shipping is vital. To overcome the complexity and make sense of the gargantuan amount of data pouring into your healthcare and life sciences supply chain, you need to adopt best practices and the right technology.
As a leader in Transportation Spend Management, we at Trax will walk you through these best practices so you can reach more customers to save more lives, without sacrificing revenues.
1. Establish and Optimize Standard Operating Procedures
It’s not uncommon for poorly written standard operating procedures (SOPs) to be the root of an issue—they can lead to poor communication and monitoring, incorrect data, loss of customers or profits, and more. Creating optimized SOPs helps eliminate errors and inefficiencies from your supply chain process, as well as identify opportunities for improvement and growth.
Start with identifying all your business goals. Then break down how to achieve them in a step-by-step fashion. Your SOPs should leave no room for interpretation, but rather create reliability and consistency. They set the bar for product (and employee) quality, safety, and so on. However, all of this work is only valuable if you review and normalize the data and continuously improve processes to eliminate errors and assumptions, as well as keep up with changes in the market.
By mapping out your SOPs, you begin to create your roadmap to optimization of your Transportation Spend Management. This can be enhanced by using top-tier tools like Trax’s to ensure the data that you’re building your SOPs upon is normalized, up to standard, and centralized for user-friendly analytics reporting. Robust, high-quality data in hand means you have data-informed decisions that will improve the quality and service to your customers and benefit your business.
2. Leverage Technology for End-to-End Supply Chain Visibility
By adopting technological solutions, such as Trax’s platform, you enhance your end-to-end visibility into your Transportation Spend Management. It becomes easy to quickly identify gaps or issues and address them before they become major problems.
This heightened visibility also simplifies the complexity of your global, multi-carrier, multi-mode logistics network and minimizes your risk for error. For example, our Performance Manager tool highlights carrier performance so you can prevent shipping issues that lead to delays and dangerously affect your temperature-controlled cold chain. Having deep insight into your Transportation Spend Management makes it possible for you to set a standard of excellence to abide by.
Furthermore, technology allows you to automate processes. Benefits abound with automation: reduced human error, freed up resources, increased efficiency, streamlined communication and decision making, and much more. For example, Trax’s Claims Manager and Accrual Manager tools automate and optimize the claims and accrual processes, respectively. And our freight audit and payment (FAP) services eliminate errors in one of the most challenging practices within supply chain management. Instead of committing time and resources from your various departments, our FAP experts use technology to boost efficiency, such as eliminate errors and make timely payments, so your resources can focus on making the world healthier.
3. Identify Shipping Requirements with a Tailored RFP
What makes healthcare and life sciences Transportation Spend Management so challenging and complex are the unique and intricate shipping requirements—security, temperature, humidity, pH balance, pressure, elevation, and more. All of these factors drastically affect your shipment’s quality, customers, and bottom line. RFPs are not one-size-fits-all, and most RFPs weren’t originally designed with supply chains in mind, but rather for either services or tech purchases. Using a typical RPF to select your carriers is like trying to fit a square peg into a round hole—it just doesn’t deliver good results. Plus, not all carriers are created equal. Some dabble in global transportation while others have global resources, processes, and tools.
Having the right RFP eliminates the costly mistake of choosing the wrong carrier that can’t get the job done within the parameters you need. This mistake could lead to significant financial losses from lost sales or delayed/damaged shipments. That’s why Trax helps you identify the critical factors for your shipments and tailor RFPs to match your needs. We have the global expertise and have worked with more than 4,000 global carriers. We took our experience and created the RFx Manager tool that helps you compare bids, from capabilities to capacities to costs and more.
4. Partner with the Right Carrier
With a customized and comprehensive RFP, you get critical insights laid in your hands before choosing a carrier. Additional—not substitute—ways to parse out the best of the best is to create comprehensive KPIs and robust carrier scorecards that measure carriers’ performance. These produce high-quality, refined data so you have insights into details such as carrier damages and on-time delivery rates, invoice accuracy and timeliness, accessorial charges, responsiveness to resolution, and other factors that are critical to your business and customers.
Trax’s Carrier Management Services gives you exclusive insight into our expertise and assistance in managing carrier performance and services. Pair that with other tools like our Performance Manager, and you have the complete package that ensures you choose the best carrier for the job every single time—without sacrificing quality or your bottom line.
5. Know Your Total Cost of Ownership (TOC)
Knowing TOC in healthcare and life sciences Transportation Spend Management is critical to success. The complexity of healthcare and life sciences means there are an abundance of direct costs, which 80% of executives say increased in 2020, and indirect costs associated with it, including patient safety, market share losses, product waste or expiry, sensitive brand risks, and more. To fully calculate your TOC and keep it aligned with your budget, you need enhanced visibility through a constant influx of quality freight and financial data. Sorting out your TOC also can help with identifying unnecessary costs and maximizing your savings.
Trax guides you through optimizing your Transportation Spend Management to gain greater visibility into your supply chain cost centers and windows of opportunity. It also makes sense of the hundreds of daily carrier payments, which our TraxPays service reduces to only 52 payments a year. Our other tools, like Trax’s Accrual Manager and Budget Manager, also help you to figure out your TOC, as they aid with delivering better budgeting, forecasting, and planning within your business objectives.
6. Continuously Review Compliance
Compliance is another major pain point, as regional tariffs, various government regulations, differing custom clearance requirements, add to the complexity of healthcare and life sciences Transportation Spend Management.
Non-compliance leads to critical issues like shipments being delayed at port, potentially ruining them if they’re temperature- or time-sensitive. Shipments with specific shipping and handling requirements like these need your entire logistical network’s total compliance to ensure safe and successful delivery.
For example, a biopharma product shipment is stored at a warehouse that needs to be GDP certified and ensure that the handling and shipment comply with specific temperature requirements. Keep in mind that 20% of temperature-sensitive products are damaged during shipping, so you can imagine the colossal loss the warehouse's non-compliance can incur. And that doesn’t even include the potential harm to your customers and brand. We can’t emphasize enough the importance of network compliance to ensure your product reaches the destination in good condition.
A combination of our tools, such as our Performance Manager, Carrier Management Services, and Match Manager, helps you achieve network compliance. Our Match Manager aligns freight-oriented data with supplier-oriented data, giving you better visibility over transportation costs so you can cross-check them and optimize your logistics network for performance and budgetary compliance.
7. Establish an Agile Network
If the year 2020 highlighted anything in the industry, it’s that supply chains must become more agile and resilient during challenging times. Companies that had a flexible and robust logistical network during the pandemic made informed decisions within a short timeframe, earning the upper hand and maintaining clients while onboarding new ones—and left competitors floundering to keep their heads above water. To create an agile supply chain, you need complete end-to-end visibility and control, which is achievable by optimizing your Transportation Spend Management.
Trax's Transportation Spend Management Maturity Model is a framework that provides a roadmap for large, global enterprises to shift from a lack of visibility and control to a fully optimized and accurate data-based transportation supply chain for all modes and geographies.
Optimizing the performance of your supply chain, its cost centers, and your freight data management puts you on the path to being a leader in the market. Leading companies use the most challenging times to their advantage by widening the gap from the competition when competitors are struggling to survive.
Healthcare and Life Sciences Transportation Spend Management Simplified and Enhanced
The challenges in healthcare and life sciences Transportation Spend Management are amplified due to the sensitivity and expense of the products and the stakes at hand. Be it financial challenges—such as controlling costs—or operational challenges like maintaining performance, it’s imperative for companies to eliminate errors that can lead to customer harm or extreme financial loss.
Trax's status as the global leader of Transportation Spend Management gives us unique insight into healthcare and life sciences supply chain management complexities. We understand the challenges, as well as the opportunities, and offer our clients a divine mixture of expertise, services, best practices, and technological solutions to optimize their supply chains. To start implementing the best practices in healthcare and life science Transportation Spend Management, contact Trax today.