UK logistics supplier bags £6m deal with AZ

By Emilie Reymond

- Last updated on GMT

Related tags: Supply chain management

British drug maker AstraZeneca has awarded UK-based NYK Logistics a
two and a half year contract for the distribution of its drugs
throughout Europe, worth £6m (€8.9m).

NYK said that this newly announced deal will bring together the distribution operations of AstraZeneca's European manufacturing facilities for the first time, as until now, each plant operated independently and was responsible for its own transportation. Under the terms of the contract, NYK will use its pan-European network of road transport partners to provide AstraZeneca with the temperature-controlled distribution of almost 50,000 pallets of product per year from AstraZeneca's 10 manufacturing facilities across the UK, Belgium, France, Germany, Italy and Sweden to 30 delivery points throughout Europe. This latest deal is a clear example that the European contract logistics market is booming and is showing no sign of slowing down. Recent research from Analytiqa revealed that the European spending on outsourced logistics services in the pharma industry is likely to exceed $2bn (€1.5bn) in 2011 as opportunities arise for third party logistics (3PL) providers. While the pharmaceutical supply chain is highly complex and regulated, and outsourcing of logistics services to third parties is still in its infancy in Europe, there is significant potential for expansion and innovation for services providers, particularly in the use of temperature controlled services, and the research predicted that logistics spend in Western Europe markets is set to grow by more than 20 per cent in the next four years. NYK said that the development of a pharmaceutical cross-dock network - a process where drugs are received at the warehouse or distribution centre without being held in inventory - will support the transformation of AstraZeneca's supply chain from 'push' to 'pull', reducing inventory in the pipeline and providing a more responsive service to customers. NYK is also developing a system of shared loads with other European drug makers and maximising round trip opportunities to cut costs and reduce pollution. Commenting on the deal, James Shaw, in charge of Global Category Lead Freight & Logistics at AstraZeneca said: "NYK's solution went beyond our initial requirements and demonstrated a high level of added value, along with an understanding of the importance of quality, integrity and audit control in the pharmaceutical chain". ​ He added: "NYK recognised that the new approach would represent a major challenge for many of our manufacturing plants and established a dedicated implementation team to ensure a seamless transition to the new system, including a dedicated relationship manager to ensure maximum confidence and co-operation from every site." ​ NYK said that of the 22 companies pitching AZ for the contract, it was the only one not to be an existing supplier for the drug maker, but managed to convince AZ to swing its decision in NYK's favour.

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