UPS United Parcel Service

By Sara Castellanos 

United Parcel Service Inc. early next year plans to launch a service for health-care customers that uses sensors and data analytics to track medical packages' exact location in near-real time.

The service, UPS Premier, will prioritize the handling of shipments such as personalized medicines, DNA and gene therapies, investigative drugs, laboratory specimens and implantable medical devices. The goal is to ensure that packages arrive at exactly the right time and place, despite factors such as bad weather.

"Having better visibility about where shipments are [means] when unexpected things happen, we'll be in a better position to react," said Juan Perez, the company's chief information and engineering officer.

UPS sees opportunity for growth in the area of so-called precision logistics, or the act of getting critical drugs and health-care devices to their destinations at the right time with a high level of consistency, Mr. Perez said.

Sensors on the packages will let UPS staff know where they are at any given time. Currently, UPS employees know where a high-priority package is at a few points throughout the delivery cycle based on visual cues that are placed on packages.

The new sensors interact with electronic readers in sorting and distribution operations, using technologies including Bluetooth, cellular and Wi-Fi. UPS employees can use that information to prioritize deliveries and change them as necessary, Mr. Perez said. For example, if there is a risk of a weather-related delay, the package can be quickly identified and rerouted to make sure it still gets to patients on time, he said.

The new service is the latest example of how technology is being used to improve the complex health-care supply chain, which often involves packages that are temperature-sensitive and can expire quickly. As many as 10 entities handle a drug before it gets to a patient, including manufacturers, pharmacies and wholesale distributors, experts say.

FedEx Corp. has a health-care focused logistics service called SenseAware that customers can use to monitor location of shipments, as well as precise temperature, light exposure and barometric pressure. The system gives customers updates in near-real-time.

Merck KGaA said last month that it plans to start testing a cloud-based software platform that can analyze in real time data points from various organizations within the drugmaker's supply chain. The goal is to use analytics and machine learning to predict and prevent drug shortages.

UPS's new service will depend in part on a tool that uses analytics and machine learning to gather and consolidate data from various applications within the company's logistics network to better predict package flow, volume and delivery status.

The need for precision logistics has increased because of a growing elderly population and trends toward personalized health, which focuses on predicting and preventing diseases.

UPS could eventually expand the more advanced level of package tracking beyond the health-care industry, Mr. Perez said. Eventually, customers might be able to reroute packages at any point during the delivery process if they decide they don't want a product or they want it delivered to another destination. "Supply chains of the future will require that level of flexibility," Mr. Perez said.

Write to Sara Castellanos at sara.castellanos@wsj.com

(END) Dow Jones Newswires

November 20, 2019 18:04 ET (23:04 GMT)

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