As witnessed throughout the Covid-19 epidemic, expansion within the at-home diagnostics market has been greatly attributed to consumer preferences for convenience, cost-effectiveness, and ease – and technology advancements have further supported this growth. Take diabetes monitoring, for example. No longer do patients have to manually record glucose levels – instead, they can use wearable devices that provide continuous monitoring, recording, and sending of numbers and also administer or adjust insulin automatically.  

This increased consumer demand brings challenges for the at-home diagnostics market, however, particularly when it comes to logistics and associated impacted areas, including delivery, shipping, and storage conditions, as well as the reverse logistics process. These challenges are closely followed by product availability. In this piece, we dive into those logistics challenges for the at-home diagnostics market and how to overcome them. 

5 Logistics Challenges for the At-Home Diagnostics Market 

Meeting Consumer Demand 

Consumer demand for faster delivery has driven the supply chain to explore and adjust their logistics decisions. These modifications have been seen across all industries and the at-home diagnostics market is no exception. Working with experienced logistics providers that are skilled in rapid turnarounds and accelerated timelines is one way that at-home diagnostics companies can navigate some of these logistical challenges. For example, FedEx and UPS partner with the US Postal Service (USPS) to support last-mile delivery services. The USPS’s expansive network provides accelerated delivery, especially for those who live in a rural setting, and changes within the USPS have supported the growing consumer demand and expectation for deliveries seven days a week. 

Product Storage and Shipping 

Product storage and the establishment of appropriate shipping conditions are related logistical challenges. When an at-home test ships directly to a customer, the conditions by which the product is shipped are important to understand. Traditionally, products ship in an ‘ambient’ manner; therefore, if a product needs to remain within a certain temperature range, such as for an at-home testing kit, it’s important to consider how conditions outside of this range impact product.    

Similar to shipments, the evaluation and monitoring of how the product is stored is just as important to ensure customers receive a quality product. Assuring there is a clearly defined plan for products impacted by specific storage requirements must be established when developing distribution and fulfillment strategies. To support this evaluation, companies should ensure a packaging, shipping, and storage validation is conducted. Areas of consideration are the length of time and the condition the product could be exposed to while in both storage and transit, as well as how the product performs after being shaken and tossed around (commonly referred to as a shake test). The validation should consider worst-case scenarios and build the results into the packaging, shipping, and storage standards.  

One method commonly used to measure product temperature is the use of color changing indicators. If too much shaking or movement of the product is critical to its quality, there are indicators that can be placed on the product to indicate this condition as well. This can help to visually identify if the product has been exposed to unexpected events, prompting an evaluation of the product quality. With the increasing dramatic changes of weather conditions, this evaluation is of greater importance to ensure a plan is established for the safe handling of product throughout the supply chain. Additionally, this is an easy way to provide visual indicators to the consumer, as well, so they know if they should report a problem.  

Product Expiration and Stability  

In addition to packaging and shipping conditions, product expiry is a challenge for the supply chain. During the verification and validation stage, stability programs should be setup to determine how long a product maintains its quality attributes and at what temperatures. These profiles are the foundational product requirements, as they provide guidance for determining how the expiration date is assigned, how a product is stored, and how it’s shipped. The output of these studies provides the scientific evidence to answer questions from customers concerning product viability.  

Reverse Logistics  

While outbound shipping has various challenges that must be overcome, many diagnostic kits require the consumer to return the materials in order to process the results. This reverse logistics process should be designed to minimize challenges for both the consumer as well as the business. Clear instructions of how to gather, package, and return the samples is extremely important. These should be clear, concise, and easily followed. If there is any ambiguity in the directions, the sample may not be collected or shipped correctly. The result could even require the patient to go into the office for a repeat collection, potentially delaying diagnosis and treatment or having to repeat the collection at an added cost. 

Product Availability  

Lastly, ensuring product is available when the consumer places their order is a game-changer. The companies that can react to customer demands for greater speed and agility are the ones who will succeed in this changing market. Meeting these requirements requires the establishment of an effective inventory strategy. This can only be accomplished when the supply chain focuses on three separate, yet related, areas: demand and supply planning, the incorporation of product longevity, and customer fulfillment expectations. 

As with most markets, there are always products that can easily be predicted. The challenge comes with predicting the moderate and low-running products. It’s important for at-home diagnostics companies to remain vigilant and use the S&OP process to gather consumer and market intelligence from sales and marketing. Furthermore, promotional activities, new product launches or changes, and customer retention and acquisition strategies must be considered when developing the demand plans.  

The establishment of a successful inventory strategy can only be developed once the demand plan is shared, the longevity of the product is understood, the customer fulfillment requirements are identified, and the cycle time for manufacturing and/or purchasing. These inputs allow for the supply chain team to establish an inventory strategy to meet these availability requirements.  Not including one or more of these inputs can have devastating consequences – a loss of customers due to product availability and/or lead time; increased financial liability due to expired product; increased overtime due to schedule changes to create product that is now needed; and increased freight costs both inbound and outbound. 

At-Home Diagnostics and Logistics

The evolution of at-home testing and monitoring is projected to continue growing. Consumers are in command of their health perhaps more than ever before, and the convenient ability to grab an over-the-counter diagnostic test at the local pharmacy or a DTC website will only continue to increase in the near future. As such, at-home companies need to have the proper strategies and processes in place to find success in this evolving market – from relevant marketing, to the supply chain, to data and analytics. 

To chat more on supply chain and logistics implications for the at-home market, connect with one of our experts today. 

 Contributions from Julia Hoffman and Shane Partington