DSV Healthcare also delivers 350,000 patient-ready packs every month to chronic patients, which makes DSV the country’s second-largest pharmacy. And the business case can be exported.
In South Africa, DSV has developed its reputation around its quality service, a highly successful private - public health project in the Western Cape, its cold chain expertise and its technologically sophisticated distribution facility in Meadowview, Johannesburg. These characteristics underpin the 227 dedicated vehicles that every day provide the country’s hospitals, clinics, medical centres, pharmacies and wholesalers with more than 52% of the pharmaceutical products delivered in South Africa every year.
To put it simply, we’re the country’s leading distributor of pharmaceutical and healthcare products. We offer the healthcare industry a complete logistics outsourcing solution to allow them to focus on their core competences,
says Anthony Diack, Managing Director, DSV Healthcare.
DSV's healthcare success story in South Africa was launched in 2004 when UTi purchased International Healthcare Distributers Limited (IHD). At that time IHD were owned by 11 major pharmaceutical multinationals. Then, as now, IHD was a logistics operator offering warehousing and distribution of pharmaceutical products to end-users in South Africa. The offering incorporates a full order to cash solution, which includes product storage and distribution and order and cash management.
Today DSV Healthcare represents over 40 individual pharmaceutical and healthcare organisations and delivers their products to slightly more than 4,500 customers. Of these 40 organisations, 14 are listed in the top 20 pharmaceutical companies represented in South Africa (as listed by IMS).
“Our client base covers the top players in the industry, which is something we are incredibly proud of”, says Anthony Diack. In order to deliver for our clients, we have five Healthcare grade warehouses and 13 Cross Dock facilities. Our flagship facility is the operation we have in Meadowview, Johannesburg. This is a fully automated warehouse which opened in October 2012, and which resulted from the consolidation of ten individual warehouses in the Johannesburg region.
Jens Bjorn Andersen, CEO, has had an opportunity to visit Meadowview and get an understanding of the technology behind the processes.
Meadowview is one of the most sophisticated logistics operations I have ever seen. UTi obviously has pharmaceutical logistics expertise that we can benefit from in DSV,
He was impressed by the size (the ceiling height gets to 32 metres) and not least the client portfolio that includes the world’s largest multinational pharmaceutical companies. The construction of the fully automated Meadowview distribution centre tripled the capacity and halved the manual processes. All storage picking and packing is handled by robotic systems that navigate the 26,000 m2 warehouse to pick and pack more than 15,000 individual parcels for end users every day.
An exception is ‘addictive and controlled medicines’ that are picked and packed by trained pharmacists (and kept in designated, secure areas). Some 500 cameras monitor the entire operation and are supervised from the centralised control room, which is staffed 24/7. This is also where the staff ensures that the temperatures in the various facilities and fridges never exceeds the stated limit.
“We integrate safety considerations into every aspect of our business,” says Anthony Diack. Among other measures, he has furnished all 227 vehicles, large and small, with live satellite tracking – and more than one system to safeguard against hijacking. “It is an expensive solution, but these are the conditions we operate under in South Africa, and our clients expect us to protect their products completely” he says.
Apart from the remotest parts of the country, all consignments (98%) are delivered by UTi’s own vehicles.
Medicine for chronically ill patients
The second stage of the rocket – which helped catapult DSV Healthcare to the Champions League – was in April 2012 when the company took over the distribution of medicine for chronically ill patients in the public healthcare system in the Western Cape.
Initially, it involved 145,000 scripts being delivered. Today, DSV packs and delivers an average of 350,000 patient-ready packs to the Cape Winelands, West Coast, Overberg and Eden districts every month. This makes DSV the second biggest dispensing pharmacy in the country. Deliveries have grown from 250 points to over 1,000 sites within the various districts.
“We work intensely and closely with health authorities, who have appointed their own full-time on-site project manager,” Anthony Diack explains. He also emphasises the well-defined procedures for training new employees and the provision of ongoing training and education of employees in the individual facilities, doctors, clinical staff and other support functions.
“There’s no room for surprises when providing vital medicine to 350,000 people each month. We have agreed all necessary procedures in close interaction with the authorities,” he says, mentioning measures for handling prescription errors and the collection of non-claimed medicine. Every day, UTi brings back some 700 – 800 medicine packages that have not been claimed for one reason or another.
Close relations with clients
Jens Bjørn Andersen has been impressed with the close relations that DSV South Africa has with its key clients. Anthony Diack agrees this has always been a priority. “The business is built around our clients’ needs. The technology, the set up and the systems and processes are based on our clients’ requirements and expectations, so yes, we’re closely linked to our clients. We have a powerful client base and our ability to retain clients and bring in new business indicates we are moving in the right direction.
Healthcare logistics is perhaps one of the most complex forms of 3PL, in part due to aspects of legislation, expiry management, safety and correct storage (many products have a short shelf life and require a specific temperature and humidity). “Processes and protocols are very advanced, and we must safeguard ourselves and our clients towards grey market products. We must never forget that we ultimately serve people who depend on us being thorough. There’s simply no room for error,” says Anthony Diack.
While DSV Healthcare initially only provided a distribution solution to the pharmaceutical industry, this has grown to include capabilities in the Consumer, Devices and Diagnostics and Animal Health industries, and of course there is the dispensing unit in the Western Cape spoken about earlier.
”We have become a broad based logistics solutions provider in the healthcare sector, with expertise to service each segment of the sector”, says Anthony Diack. And he adds, that the pharmacy solution in SA is a business model that can be exported:
”The storage and delivery of medicine is a specialised service calling for a dedicated effort – and significant investments. By pooling customers in the same logistic set up we ensure that we deliver the most competitive solutions for everybody involved. We now have the knowledge and experience to actually export this business case to other countries in the network – and we are certainly wanting to do so”.
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