May 17, 2020

The Resilience Imperative: Reinventing healthcare supply chains

4 min
The Resilience Imperative Reinventing healthcare supply chains.jpg
Written by Metin Parlak This thought leadership paper identifies a number of key trends which could derail the industrys logistics such as emerging ma...

Written by Metin Parlak


This thought leadership paper identifies a number of key trends which could derail the industry’s logistics such as emerging market growth, burgeoning regulatory and compliance requirements, changing product characteristics, and rocketing counterfeit drug trafficking. Moreover, shrinking margins, escalating cost pressures and growing consumerism are transforming the business paradigm. What is emerging is a business model that looks and acts like the consumer goods industry, where the customer – not the manufacturer – holds the power.

Lisa Harrington, President of the lharrington group LLC, prepared the report in collaboration with DHL to identify the challenges and developments affecting the sector globally. Harrington is also Associate Director of the Supply Chain Management Center and lecturer of supply chain management at the Robert H. Smith School of Business, University of Maryland.

She says, “The stakes in the new normal of LSH are enormous. So large, in fact, that the U.S. Congress was willing to shut down the entire U.S. federal government for two weeks while it fought over healthcare reform issues. That shutdown, according to Standard and Poor’s, cost the U.S. economy more than $24 billion.

“The LSH sector finds itself in the position of needing to rethink its entire economic model, and find ways to reduce costs across the board, in order to maintain share in a marketplace that is no longer willing, or able, to fund previous pricing.

“The old LSH supply chain model is no longer fit for purpose. The new LSH environment requires a more resilient, adaptive supply chain model that delivers robust global management capabilities, reduces costs and hard-wires the agility, flexibility and resiliency needed to support the challenges of global health.”

For most industries, experiencing two or three complex challenges at one time is enough to cause turbulence. But the LSH sector is contending with a complex web of issues which amount to the end of business as usual and call for a corresponding change in supply chain management:

Patent cliff, changing products and profit erosion: In 2012, $38bn of sales was lost due to patent expiration on major drugs moving to generics, while the global austerity of from value-driven governments, commissioning bodies and private payers worldwide has contributed to prescription sales falling by 1.6% to $714 billion. A highly cost-effective supply chain that also delivers fast, reliable speed is required to meet the needs of an increasingly empowered, consumer-led market. Meanwhile, higher value products that are better protected from sales erosion carry significant financial risk if mismanaged in the supply chain. These include biological pharmaceuticals focused on unmet medical needs or medical devices with proven clinical benefits which have complex ranges, temperature requirements and final destinations (including hospitals and to home).

Emerging markets, demographic shifts and healthcare policy: The world’s population in aging with over 60’s expected to be more than 1/3 by 2050. In addition, emerging markets such as Brazil, Russia, India, China and Mexico and their growing middle-classes represent a significant growth opportunity for LSH companies. To adapt, LSH companies must adopt business models which allow for geographical range and therefore require tailored supply chains that deliver a higher volume of goods to increasingly diverse end points such as hospitals and distributed care in the home.

Regulations, compliance and product integrity: The growing issue of counterfeits has led to regulators enforcing stringent and diverse product integrity control. Intensified security and data collection adds pressure throughout the supply chain, as rigorous serialization is required at distribution touch point, often painstakingly at the unit rather than lot level.

Jonathan Blamey, VP LSH, DHL Supply Chain, says, “Providing life-saving products is a big responsibility, one with risks that far outweigh those in a typical supply chain environment. LSH companies have to configure their business for each market, meeting the regulatory requirements and operational constraints of each healthcare system. Add in manufacturing constraints, compliance, temperature control and other factors, and you get a highly complex supply chain.

“To capitalise on growth opportunities and prosper in this environment, there is a tremendous opportunity and pressing need for LSH companies to take learnings from other supply chain models such as the automotive and FMCG industries. We understand the challenges facing LSH companies and have created solutions that help our customers to meet today's challenges and anticipate tomorrow’s.”

DHL Supply Chain has expanded its global network of LSH services by over 25% in 2013 with the addition of 30 new warehouses, of which 12 are in emerging markets. It now operates over 150 facilities comprising over 2 million square metres of warehousing space and 1.9 million pallet locations dedicated to LSH, with over 4500 dedicated healthcare staff worldwide.

Download and view the full report at For more information about supply chain best practice, solutions and success stories, visit the DHL Supply Chain LSH pages at

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Jun 18, 2021

Skin Analytics wins NHSX award for AI skin cancer tool 

2 min
Skin Analytics uses AI to detect skin cancer and will be deployed across the NHS to ease patient backlogs

An artificial intelligence-driven tool that identifies skin cancers has received an award from NHSX, the NHS England and Department of Health and Social Care's initiative to bring technology into the UK's national health system. 

NHSX has granted the Artificial Intelligence in Health and Care Award to DERM, an AI solution that can identify 11 types of skin lesion. 

Developed by Skin Analytics, DERM analyses images of skin lesions using algorithms. Within primary care, Skin Analytics will be used as an additional tool to help doctors with their decision making. 

In secondary care, it enables AI telehealth hubs to support dermatologists with triage, directing patients to the right next step. This will help speed up diagnosis, and patients with benign skin lesions can be identified earlier, redirecting them away from dermatology departments that are at full capacity due to the COVID-19 backlog. 

Cancer Research has called the impact of the pandemic on cancer services "devastating", with a 42% drop in the number of people starting cancer treatment after screening. 

DERM is already in use at University Hospitals Birmingham and Mid and South Essex Health & Care Partnership, where it has led to a significant reduction in unnecessary referrals to hospital.

Now NHSX have granted it the Phase 4 AI in Health and Care Award, making DERM available to clinicians across the country. Overall this award makes £140 million available over four years to accelerate the use of artificial intelligence technologies which meet the aims of the NHS Long Term Plan.

Dr Lucy Thomas, Consultant Dermatologist at Chelsea & Westminster Hospital, said: “Skin Analytics’ receipt of this award is great news for the NHS and dermatology departments. It will allow us to gather real-world data to demonstrate the benefits of AI on patient pathways and workforce challenges. 

"Like many services, dermatology has severe backlogs due to the COVID-19 pandemic. This award couldn't have come at a better time to aid recovery and give us more time with the patients most in need of our help.”

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