Logistics in healthcare is known for being plagued with inefficiencies. Studies show that 67% of providers spend over 10 hours per week addressing supply chain challenges—time that could be better spent on patient care. And here’s the most bitter part: Beyond financial losses, staff dissatisfaction, and poor patient experience, these inefficiencies can directly impact patient health, with nearly 40% of providers having canceled or rescheduled patient cases at least quarterly due to product shortages.

This underscores the vital importance of resilience in healthcare logistics, as it can quite literally save lives. As a software development provider with a decade of experience delivering solutions across industries, including logistics and healthcare, we know exactly how to ensure this resilience with the power of technology.

Let’s start with a bird’s-eye view of the healthcare logistics market.

Overview of the Healthcare Logistics Market

The rising demand for pharmaceuticals and the complexity of the healthcare supply chain fuel significant growth of the healthcare logistics market. According to the researchers from Research and Market who analyzed data about 41 logistics vendors, in 2023, this market was valued at $185.77 billion and is projected to reach $290.73 billion by 2029, with FedEx Corporation, DHL Supply Chain, AmerisourceBergen, UPS Healthcare, Kuehne + Nagel, DB Schenker, and Medline Industries being its major players.

However, despite the considerable healthcare logistics market size and its robust growth prospects, the industry is struggling with a few serious challenges:

  • Temperature control. With over 95% of all approved biologics requiring strict temperature controls during transportation and storage, the pharma industry loses $35 billion annually due to improper handling of temperature-sensitive shipments.
  • Shelf-life management. Aside from being a source of substantial financial losses reaching billions, expired medications can also pose serious risks to patient safety. Monitoring expiration dates effectively remains a challenge for many organizations.
  • Supply chain disruptions in the wake of COVID-19. The pandemic highlighted vulnerabilities in global supply chains, leading to delays and shortages in critical medical supplies. The repercussions of these disruptions continue to be felt across the industry.
  • Regulatory compliance. Storing and transporting medical products is heavily regulated. Navigating these regulations can be complex and resource-intensive.

IoT, AI, cloud-based ERP, and other solutions can potentially address these challenges. In other words, transforming healthcare logistics through innovation is not merely a strategy for gaining a competitive edge; it has become essential for the survival of the entire industry.

Logistics in the Healthcare Market: The Key Trends for 2024 and Beyond

No matter the year, the core responsibility of healthcare logistics stays the same: delivering the right drug or medical device to the right place at the right time, safely, and in full compliance with regulations.

However, ever-changing external factors—such as the repercussions of COVID-19 and new regulatory requirements—introduce unique challenges and solutions.

Advanced Technologies

With their ability to tackle many healthcare logistics challenges, technologies like AI, IoT, and blockchain aren’t going anywhere. For example, AI enables predictive analytics, optimizing routes, and automating inventory management for greater efficiency. IoT supports real-time tracking of shipments and monitoring of temperature-sensitive products. Blockchain offers secure, transparent tracking of medications, fostering trust and accountability throughout the supply chain.

Cloud-Based ERP Solutions

Cloud-based enterprise resource planning (ERP) solutions are essential for effective healthcare data management. One of their primary advantages is the capacity to consolidate vast amounts of information related to inventory, procurement, distribution, and other supply chain activities from multiple sources into a single, cohesive platform.

Enhanced with AI and IoT capabilities, cloud-based ERP systems provide real-time visibility across the entire supply chain. This lets healthcare providers swiftly identify disruptions and take immediate action to mitigate any potential issues.

On-Demand Healthcare Logistics

The global on-demand logistics market is projected to grow substantially, expanding from $12.4 billion in 2021 to an estimated $80.63 billion by 2031, reflecting a robust CAGR of 20.8%. This significant shift underscores the increasing demand for flexible, technology-driven logistics solutions.

Unlike traditional supply chain management approaches that rely on fixed schedules and predetermined routes, the on-demand model uses advanced technologies and a network of available vehicles and carriers to address logistics needs as they arise. This approach aligns with the healthcare industry's growing need for resilient supply chains to meet the urgent demands of providers and patients.

Although statistical evidence showing widespread adoption of on-demand logistics solutions in healthcare may be limited, the industry's future clearly leans toward greater integration of these flexible, technology-driven models.

Sustainability and Eco-Friendliness

As environmental concerns keep growing, healthcare companies focus more on implementing green logistics, sustainable packaging, energy-efficient warehousing, collaborative shipping, and other sustainable practices.

FedEx, one of the largest providers of logistics services across industries, has significantly bolstered its commitment to making our planet a safer place. Operating over 7,100 electric vehicles worldwide, the company has recently introduced green logistics practices like fleet electrification, renewable energy integration, and innovative community engagement in Asia Pacific. Kuehne+Nagel, another giant, reduces CO2 emissions in healthcare logistics through cross-docking.

These trends indicate that advanced technologies are set to address both existing and emerging challenges within the industry. Let’s take a closer look at what these technologies have to offer for healthcare supply chains.

Innovations Transforming Healthcare Logistics

Digital investments in healthcare supply chain technology are on the rise: 43% of providers rely on technology and data to monitor supply availability. However, the usage of logistics software in healthcare extends far beyond this.

Here are some key innovations transforming healthcare logistics.

Smart Warehousing

Smart warehousing relies on automation, robotics, AI, and other cutting-edge technologies to streamline warehouse operations. Smooth inventory management is an absolute must for critical medication and medical supplies to be delivered promptly and securely. Basically, smart warehousing is a mix of various solutions, including:

  • Automated guided vehicles (AGVs) can transport goods around a warehouse without human intervention. They navigate using sensors and predefined paths. In healthcare, AGVs can efficiently move medical supplies and equipment, reducing the risk of human error and improving workflow.
  • Collaborative robots (cobots) can work alongside human workers to handle picking, packing, and sorting. These robots can take over repetitive or hazardous jobs, enhancing productivity and safety.
  • IoT devices like RFID tags and smart sensors can monitor inventory and equipment in real-time, helping ensure essential supplies are always stocked and reducing losses due to expiration or misplacement.
  • Automated storage and retrieval systems (AS/RS) maximize storage space and minimize retrieval times. This is crucial for healthcare facilities that require quick access to medications and medical devices.
  • Advanced warehouse management systems (WMS) integrate various technologies to manage inventory, track shipments, and optimize workflows.

Smart warehousing penetrates supply chains across industries, and healthcare is no exception. DHL, which caters to healthcare providers, optimizes its inventory management and forecasting with IoT and data analytics. Another example is Novartis, which partnered with Mecalux to build a fully automated storage and distribution facility in Poland.

Drone and Autonomous Vehicle Deliveries

Drones and autonomous vehicles are revolutionizing the delivery of drugs and medical supplies. These technologies make it quicker to transport goods, especially to remote or hard-to-reach areas, which speeds up delivery times and makes healthcare services more accessible.

For example, UPS Fly Forward showcased the potential of drone deliveries in healthcare by transporting COVID-19 vaccines to Atrium Health Wake Forest Baptist during the pandemic. Equipped with advanced cold chain technology, these drones maintained temperature control within the critical range of 2 to 8°C. Additionally, their battery-powered design resulted in zero operational emissions and reduced vibration compared to ground transport. Spending less time in transit, the drones required less insulation and utilized gel packs instead of dry ice.

Cold Chain Advancements

Cold chain logistics is critical for preserving the quality of temperature-sensitive products, such as vaccines and biologics. Innovations in this area include:

  • IoT and real-time monitoring. Sensors track temperature, humidity, and location data in real-time to detect problems immediately.
  • Improved packaging. Advancements in insulation materials, phase change compounds, and smart packaging ensure greater thermal protection of temperature-sensitive products.
  • Solar direct drive refrigerators and freezers, powered directly by sunlight without batteries, provide an eco-friendly cold chain solution for areas with unreliable electricity supply.
  • Predictive analytics. Based on historical and real-time monitoring data, predictive analytics can forecast potential disruptions in cold chain operations, maintaining the integrity of temperature-sensitive products and minimizing waste.

In particular, to ensure the potency of its vaccines during storage and transit, Pfizer relied on Controlant’s cold chain solution. This system utilized real-time IoT data loggers placed inside vaccine containers to monitor critical shipping parameters, including the quality of the contents, location, temperature, and exposure to light. The data collected by the loggers was transmitted to a cloud-based platform accessible to all supply chain partners. In the event of any issues, the system immediately alerted users so they could quickly take corrective actions.

Pfizer's CEO reported that an impressive 99.99% of the company's vaccines were successfully received and administered.

Blockchain Solutions

Blockchain technology strengthens transparency and security in healthcare logistics. By creating immutable records of transactions, blockchain maintains the integrity of the supply chain, allowing stakeholders to track products from manufacturers to end-users.

Big companies recognized the potential of blockchain a while ago. For example, DHL has launched a prototype that utilizes blockchain technology to track and authenticate medical products within its pharmaceutical supply chains.

Collaborative Delivery Management Platforms

These platforms enable real-time coordination among various stakeholders in the healthcare supply chain. By integrating data from multiple sources, they enhance visibility, ultimately improving patient care.

Collaborative delivery management platforms are not a novelty. For instance, UPS Premier helped healthcare providers track COVID-19 vaccine shipments. McKesson and Cardinal Health rely on similar platforms to achieve end-to-end visibility and smooth communication throughout their supply chains. FedEx offers a customer-facing solution called FedEx Surround, which provides healthcare clients with insights into delivery lead times, warehouse inventory levels, and various performance metrics across the FedEx network.

Key Considerations for Healthcare Logistics Software Development

Your future healthcare logistics solution must address three primary objectives.

First, it should effectively mitigate risks associated with logistics management in healthcare. This involves consistently maintaining proper conditions for temperature-sensitive products, monitoring expiration dates, and keeping necessary medical supplies in stock.

The second goal is cutting costs since hospitals currently spend as much as 20-30% of their budget on logistics.

Last but not least is compliance. In addition to the well-known requirements of GDPR and HIPAA, hospitals must also adhere to ISO 20000, an international standard for quality management systems. Moreover, medical equipment companies are required to comply with ISO 13485, Good Distribution Practice (GDP) for medical devices, Hazardous Materials Transportation (HMT), and other regulations.

The following features will help you achieve these objectives.

IoT for Condition Monitoring

IoT sensors attached to containers and packages can continuously monitor temperature, humidity, and vibration, transmitting all data to the cloud wirelessly. Such visibility helps identify potential disruptions early.

GPS Tracking

Real-time location data obtained through telematics devices installed in vehicles is essential for safe, fast, and cost-efficient deliveries. GPS tracking should be integrated with route optimization and load planning features so medical organizations and healthcare logistics companies can determine the most efficient routes and consolidate shipments.

Predictive Equipment Maintenance

Broken equipment translates into the risk of temperature deviations and other disruptions in the healthcare supply chain. To keep the coolers and freezers operating properly, it is essential to implement an IoT infrastructure with connected sensors that continuously monitor equipment health. These sensors can alert maintenance staff when action is required, preventing serious issues.

Shelf-Life Management

Asset tracking solutions—barcodes and RFID tags—can capture critical product information, including production and expiration dates, lot numbers, locations, status, and other essential details. With all this data in a single system, you can track product shelf-life, identify items that require prioritized movement, and receive alerts when expiration dates are fast approaching.

Inventory Level Management

By integrating advanced inventory management features, you can track usage rates, forecast demand, and reduce waste. This approach guarantees that essential supplies are readily available without the risk of overstocking.

Routine Task Automation

Automating repetitive tasks like order processing and inventory replenishment can reduce labor costs and improve efficiency. This frees up staff to focus on higher-value activities, leading to better service quality.

Compliance Features

Regulations set the standards for every part of the healthcare supply chain—transportation, storage, packaging, human resources, and more. Given how often these rules change, staying on top of them can be quite resource-intensive.

A robust software application for healthcare logistics compliance can help:

  • Track regulatory changes
  • Keep quality standards, policies, and procedures up to date
  • Manage supplier qualifications, performance evaluations, and quality audits
  • Audit compliance processes

Security Features

Compliance is just not possible without strong security measures in place. Besides, compromised security might cost you even more than non-compliance. For example, Change Healthcare paid BlackCat, a ransomware group, $22 million to restore access to compromised data.

Your future software must protect sensitive patient and supply chain data from breaches both in rest and transit. This can be achieved with encryption, multi-factor authentication, role-based access controls, and secure APIs that allow authorized users to access necessary information without compromising security.
Regular audits and updates must be part of the software lifecycle to maintain compliance.

Why Investing in Healthcare Logistics Software Development Is a Great Idea

The aftermath of COVID-19, an aging population, and economic instability have created a pressing need for efficient logistics solutions for healthcare. According to the Premier’s new 2024 Supply Chain Resiliency Report, nearly 80% of healthcare providers and 84% of suppliers expect supply chain challenges to worsen or remain the same over the next year.

Meanwhile, the value of robust logistics software for all members of healthcare supply chains is self-evident. It speeds up delivery, reduces operational costs, minimizes the risk of delivering low-quality products, and fosters compliance. No wonder that 37% of suppliers from the survey quoted above are prioritizing technology investments in 2024, which reflects a long-term trend toward boosting supply chain resilience and efficiency with technology.

In essence, healthcare logistics is set for a digital transformation on a global scale. Our CEO echoes this sentiment, saying, "As we move towards a more interconnected healthcare ecosystem, the demand for sophisticated logistics software will only increase. The future of medical supply chains will heavily rely on data-driven decision-making, real-time visibility, and on-demand healthcare logistics, making software development a critical investment area."

In other words, investing in healthcare logistics software development presents a unique opportunity for businesses and investors to benefit from this growing market.

Conclusion

The healthcare supply chain is inherently complex and costly, with many different players involved, the need for temperature-sensitive medications, and the handling of perishable materials that require specific conditions. However, efficient and resilient healthcare logistics go beyond just cutting costs and meeting regulations—they are key to patient safety and well-being.

Even with the current inefficiencies in the global healthcare logistics market, businesses are increasingly seeing how technology can overcome these challenges. There is no turning back; technology is set to become an integral component of the medical supply chain, making logistics for healthcare an attractive opportunity for technology investments. If you’re ready to explore this opportunity, Exoft is here to help.

With over a decade of experience with projects in healthcare, logistics, and related fields, our software development company deeply understands healthcare logistics challenges, including regulatory aspects. We also have extensive expertise in AI, IoT, GPS, predictive analytics, and other advanced technologies. We are ready to discuss your project and start the implementation process. Book a call with us today!