DHL Supply Chain inks deal with Siemens Healthineers

A collaboration, in the form of a United States service logistics agreement, was announced today between DHL Supply Chain, a subsidiary of global logistics services provider DHL, and Siemens Healthineers, a medical technology company, and subsidiary of Siemens AG.

DHL officials said that this collaboration will have a sharp emphasis on digital and robotics technology usage, in order for the Siemens Healthineers supply chain, specifically its U.S.-based Customer Service Material Logistics Unit, to provide continuous quality and cost improvements, which, in turn, are expected to result in strong delivery performance and customer satisfaction levels.

A major component of this collaboration centers on what DHL called a new 260,000 square-foot state-of-the-art Memphis, Tenn.-based World Distribution Center (WDC), which will be overseen and operated by DHL Supply Chain. This facility, which will be comprised of 105 DHL Supply Chain associates, will be comprised of various offerings and services, including: DHL’s proprietary warehousing and inventory management system, automated storage and retrieval systems and augmented reality-assisted picking, to maximize efficiency and productivity, digital technologies, like 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.

The 260,000 square-foot Memphis WDC is expected to open in October, with DHL owning the entire 422,000 square-foot facility, which DHL said was the first speculative distribution facility built in Memphis going back to 2007.

Siemens Healthineers President and Head of the Americas David Pacitti said in a statement that the Americas is an important growth market for Siemens Healthineers, and the quality, flexibility and speed of the service logistics platform it has established in the region is a clear source of competitive advantage.

“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,” he added.

In an interview, Scott Allison, Chief Customer Officer, Global Service Logistics, DHL Supply Chain, said that at a global level, DHL has a well-established relationship across all its divisions—particularly DHL Global Forwarding and DHL Express—with different operating units of Siemens AG.

“We have been working with Siemens Healthineers in other regions,” he said. “This is a new relationship for DHL Supply Chain in North America and represents a significant win for us in the life sciences & healthcare sector.

Allison said that a major cog of this relationship centers on how Siemens Healthineers manufactures medical devices and equipment, such as MRI/ CT scanners, and has installed a base of equipment across the entire U.S. for that, adding that Siemens then needs to support that offering with field service engineers to maintain and ensure it is kept running (if one goes offline, lives are potentially at stake), with high uptime levels are critical for most of its equipment.

“Our solution is built around [the Memphis WDC], which in turn is supported by 40 forward stock locations,” said Allison. “This enables a compressed (same-day, four-hour) delivery window to a network of hospitals covering 90% of the country; an engineer places an order via an app—we then need to deliver within four hours to get the equipment up and running again.”

When asked how, or in what ways, the Memphis WDC will provide support to Siemens, Allison explained that the facility will be at the heart of the solution that DHL Supply Chain will provide to Siemens Healthineers

“The Distribution Center will replenish 40 sites across the country with spare parts, and we will then oversee last-mile delivery to the field engineers (who can order via app and see the drivers in transit etc.),” he said. “A big part of the partnership is investment in robotics and technology at the site, The site is a modern ‘fit for the future’ building, in which we will be looking to deploy a range of modern technologies to maximize productivity and increase throughput, including, for example, vision picking and automated lifts. Memphis was a good location for a national distribution center, due to its positioning as a major logistics hub. DHL Supply Chain has a number of operations there, with at least 11 locations serving 25 customers, including from the Life Sciences & Healthcare sector. We have built up a campus location that allows us to leverage labor across the different sites.”

Looking ahead, Allison said DHL is factoring in a six-month start-up period for this initiative, with the first inbound orders to be processed in October and the project’s output is expected to be at a steady state by March 2021.

What’s more, on July 2, DHL Supply Chain announced a $70 million investment to expand life sciences and healthcare capabilities in North America, with today’s announcement being part of that investment.