Transforming Healthcare logistics in South Africa

DSV has reinvented itself over 21 years to meet South Africa’s changing healthcare supply chain needs.

DSV’s healthcare business is quite different from the one that operated in 2003, which distributed medicines for four original manufacturers.

The business grew, but changing market realities – including pressure to cut costs and manufacturers’ changing product mix and customer base – led to a new business model emerging, and a reversal of the original strategy: fine distribution once again became the preserve of medical wholesalers, and DSV worked with, rather than around, them.

Today, DSV is a broad healthcare provider, and in addition to original branded medicines we transport generic, device and diagnostic, consumer health, and animal health products. We have grown our business by expanding into new markets, while at the same time reducing our risk.

The data shows that the traditional medicines market is not growing at a unit level in South Africa, and DSV’s revenue growth has come by diversifying services (see graph above) and opening up to the broader healthcare market.

The evolvement has not been easy. While the sectors share similarities, they have unique requirements which took time to understand. DSV built out the capabilities and competencies to meet the market’s needs and its focus on performance has guided its evolution over the past twenty years.

Data, digitization and automation
How DSV is transforming medical logistics with data and automation has evolved. Building out data analytics and self-help capabilities, and reporting capabilities have evolved from static monthly KPI dashboards to interactive data sets run through Business Intelligence (BI) platforms. The discussion and review sessions we have with our clients today are so much more insightful and valuable.  

We have made advances with process automation, and expanded self-service capabilities to enable our clients to handle certain tasks independently. Removing steps in the process speeds up transactions and reduces the impact of errors through manual interventions.  

Compliance
Manufacturers and downstream service providers have had to adapt to increasingly strict levels of compliance, especially around last mile temperature controls. DSV has invested heavily in providing an end-to-end compliant, ambient temperature-controlled distribution network, as we have a deep understanding of the impact of compliance on last-mile healthcare logistics in South Africa. This service forms the spine of DSV’s cost-versus-value proposition to the industry.

Sustainability
DSV takes sustainability seriously, and the company has several initiatives in play designed to reduce environmental impact. In addition, DSV is having conversations with clients around the combined impact which can be made when strategies and resources are aligned.

More with less
In the first decade of operation, DSV Solutions’ specialized healthcare logistics grew its footprint to seven warehouses across the country. But now there are just two stock holding facilities and the consolidated reach had improved efficiencies and reduced costs.

We felt we were over-servicing the market and could provide the same service at less cost. Our network gives us the ability to service all of South Africa, as well as our neighbouring countries and we have built a fully compliant ambient temperature-controlled logistics distribution network to do just that.”

While there was a focus on medical warehousing in South Africa years ago, it has evolved today and the focus is on maintaining temperature, end-to-end, and after a period of considerable investment we are probably the only 3PL with a fully compliant end-to-end solution.

DSV’s healthcare business was limited to warehousing and last-mile offerings, and worked with DSV Air & Sea on import and export, and DSV Road for parcel and full-truckload solutions. DSV has a strong network in Africa, blending owned offices with agents, and the combined service offered highly competitive solutions throughout the continent.