Panalpina powers digital data centers through procuring and owning inventory for tech companies

Big social media companies used to moving digital bits and bytes now have Panalpina as an ally in Logistics Manufacturing Services (LMS). A pioneer of LMS, Panalpina has made further inroads into the high-tech space by managing inventory for its customers and holding up the backbone of their supply chains to serve data centers. With this latest offering, Panalpina takes another important step towards managing entire product life cycles in an increasingly circular economy.

Being digital on a global scale is only possible if you have an armada of physical servers and switches to channel all the data. The pioneer of Logistics Manufacturing Services (LMS), Panalpina has scored another industry first by offering inventory procurement and ownership, a model of value-added reselling, to high-tech companies as part of its growing LMS offering.

Buy, assemble, configure, test and ship

With inventory procurement and ownership, Panalpina in effect takes inventory off customers. It buys materials, components and products from original equipment manufacturers (OEMs), plans and manages assembly and configuration, uploads and tests software, then sells the finished products and ships out to final destinations.

Reduced lead times and total cost of ownership

Customers benefit from Panalpina’s extended purchasing power and sourcing from a vast network of suppliers. They do not have to carry excess cost due to overstock, because a reliable partner is buying and managing inventory for them.

“We use our worldwide network and our manufacturing expertise to source, assemble, configure, test and deliver on demand globally. This significantly reduces lead times for our customers, as well as the total cost of ownership in the supply chain,” explains Mike Wilson, Panalpina’s global head of Logistics and Manufacturing.

Rack-based servers ready for installation

This model of procurement and ownership works particularly well in the high-tech sector with its short product life cycles. Corporate data centers are usually built from products that are highly optimized for certain functions such as data storage or routing. In the constant race to reduce lead times, the most efficient way to roll out data services is to provide rack-based servers that are ready for installation.

Panalpina has turned inventory procurement and ownership into reality by managing the entire supply chain of a high-tech customer’s enterprise servers. Started in 2018, volumes are now ramping up, with Panalpina handling thousands of servers through its new facility in Prague. On behalf of a known social media company, Panalpina buys diverse materials directly from suppliers – servers, USB devices, cables from Hong Kong, switches from the Netherlands. The inbound materials are processed, assembled, configured and tested, then shipped outbound across Europe and to worldwide destinations.

Managing not just supply chains but product life cycles

“Our Logistics and Manufacturing Services have never just been about storing and moving products; our customers want a partner to help them go to market in the most efficient way possible,” says Wilson. “With inventory procurement and ownership, Panalpina takes care of all the manufacturing and supply chain activities for its customers, shortening lead times and significantly reducing inventory and therefore cost in the process.”

Panalpina’s Logistics and Manufacturing experts also look closely behind a supply chain at a product’s lifecycle – from sourcing to disposal.

“Buying components used for manufacturing and managing inventory are one end of a product’s lifespan,” explains Wilson. “At the other end are remanufacturing, repairs and returns. Panalpina aims to become an indispensable partner for its customers by managing not just supply chains, but product life cycles in an increasingly circular economy. That’s where we can truly unlock value.”

Find out more about inventory procurement and ownership and remanufacturing in supply chains.