DHL invests in pharma logistics

MEET THE NEED

PHARMA • DHL HAS BEEN BUSY IN NORTH AMERICA, ADAPTING ITS SUPPLY CHAINS TO HELP SERVICE INCREASING DEMAND FOR PHARMACEUTICAL AND HEALTHCARE PRODUCTS

DHL SUPPLY CHAIN, a North American leader in contract logistics, has announced further investment to strengthen its life sciences and healthcare capabilities, committing more than $70m to develop additional specialised warehousing infrastructure and deploy new technologies to support its pharmaceutical and medical device customers.

The latest investment builds on a $150m commitment in June 2019, which focused on expanding the company’s US distribution network with the aim of bringing critical healthcare products closer to its trade partners and their patients.

“DHL Supply Chain was already wellpositioned to support our customers in recent months, thanks to our industry-leading footprint in North America and the investments we have made in fully licensed sites that meet their storage and handling requirements,” says Scott Cubbler, president of life sciences and healthcare at DHL Supply Chain North America. “At the same time, we recognise that demand will only intensify in the future as the market develops its response to the Covid-19 pandemic and adjusts to new ways of addressing patients’ everyday healthcare needs.

“By making this investment, which will also allow us to expand the use of efficiencyboosting new technologies,” Cubbler continues, “we are providing our customers with a platform for further growth, as well as the flexibility they need to respond as essential services in a fast-changing environment.”

DHL Supply Chain currently operates 30 specialised facilities with more than 11m ft² of temperature-controlled and certified infrastructure in the US. This latest investment will include the development of new customer sites in Memphis, Tennessee and Indianapolis, Indiana, as well as the deployment of emerging technologies, such as the LocusBots collaborative robots that enhance picking productivity rates and site throughput. The company announced plans earlier this year to increase its fleet of LocusBots to 1,000 by the end of 2020.

SIGN WITH SIEMENS Further strengthening DHL’s position in the US pharmaceutical supply chain, the company has joined forces with Siemens Healthineers, a leading medical technology company, in the form of a comprehensive service logistics agreement in the US. An important focus area in the relationship will be the use of digital and robotics technologies that are designed to deliver continuous quality and cost improvements within the supply chain of Siemens Healthineers, enabling high levels of delivery performance and customer satisfaction.

“The Americas is an important growth market for Siemens Healthineers, and the quality, flexibility and speed of the service logistics platform we have established in the region helps us better serve our customers,” says David Pacitti, president and head of the Americas at Siemens Healthineers. “Working with DHL Supply Chain, we have an exciting opportunity to further strengthen our services and support our company’s ambition to deliver a digital advantage for our customers and their patients in this region.”

The two companies plan to invest in a state-of-the-art World Distribution Center in Memphis, which will be operated by DHL Supply Chain and will incorporate DHL’s proprietary warehousing and inventory management system and proven innovations, such as automated storage and retrieval systems and augmented reality-assisted picking, to maximise efficiency and productivity. Digital technologies, such as DHL’s MySupplyChain application and GPS tracking for final mile delivery, will provide engineers with additional transparency, visibility and control over their orders and returns.

“DHL Supply Chain is bringing more than 20 years of experience in healthcare logistics,

a company-wide culture of continuous improvement, and a broad suite of end-to-end, digitally enabled supply chain solutions to this relationship with Siemens Healthineers,” says Scott Allison, chief customer officer, Global Service Logistics at DHL Supply Chain.

“Thanks to Siemens Healthineers’ leadership in medical technology and their commitment to transforming care delivery through increased digitalisation, we believe that we have an opportunity to jointly leverage our capabilities and to generate substantial value in their supply chain,” Allison adds. “We will also be applying our expertise in contract logistics and the capabilities of our broader service logistics network to target cost savings in materials procurement, labor sourcing and carrier management.”

The ten-year agreement will occupy some 260,000 ft² of the 422,000-ft² facility DHL has acquired in Memphis; this was, DHL says, the first speculative logistics facility to be built in the region for more than ten years.

AIR ACTIVITY DHL Global Forwarding, another part of the Deutsche Post DHL Group, has also made investments, alongside its partner Air France KLM Martinair Cargo, to improve transparency in the pharmaceutical logistics chain, creating a direct host-to-host connection to provide reliable tracking data.

“When securing product integrity and patient safety in the supply chain, data transparency is key,” says David Goldberg, CEO of DHL Global Forwarding US. “Taking a partnership approach to automating shipment data sharing for cargo characteristics like container temperatures is an essential step to providing our customers with peace of mind about how their shipments are being moved across the globe.”

DHL Global Forwarding has recently renewed its certification according to the International Air Transport Association’s (IATA) CEIV Pharma standard. “For years, the number of regulations and requirements has been steadily increased in the life sciences and healthcare industry in general, especially regarding product transportation and storage,” says Nina Heinz, global head of Network & Quality, Temperature Management Solutions, at the company. “Although we at DHL have been a leader in ideas and innovation in the industry for a long time, we recognise that there is always room to improve. With our renewed IATA CEIV Pharma Certification, we are both clearly demonstrating our continued emphasis on constantly enhancing our service quality and showcasing that we are a reliable partner for transporting vital and temperature-sensitive products.”

Sister company DHL Express is also responding to the current Covid-19 crisis by expanding capacity and headcount at its locations at US airports, adding some 400 new positions. “Inbound shipment volume is booming, particularly from Asia,” says Greg Hewitt, CEO of DHL Express US “Our customers are relying on us to deliver their shipments, whether it’s personal protective equipment (PPE) or home necessities, so we must add staff at our hubs, gateways and on the road to continue providing our customers with excellent service.”

Volumes have significantly increased in recent months due to a spike in online shopping as people stayed quarantined. Urgent shipments such as masks, gloves and other PPE also contributed to Holiday-season-like volumes, but these volumes have come without the usual pre-season preparation time for the peak.

“Our challenge this year is that we’re seeing peak volumes in the summer, which is a non-traditional time. We normally have time to prep for peak season,” says Hewitt, noting that volumes through the DHL Express Americas Hub at Cincinnati/ Northern Kentucky International are 30 per cent higher than a year ago. www.dhl.com

MANY OF DHL’S BUSINESS UNITS IN NORTH AMERICA

ARE LEVERAGING THE BENEFITS OF DIGITAL SYSTEMS

TO EXPAND THEIR SERVICE OFFERINGS IN THE PHARMA