Walenda, CEO of DSV Solutions: The quality of a logistics provider is shaped by its experience

To provide logistics services to the pharmaceutical industry and the FMCG sector, logistics providers must fulfil numerous requirements. Maciej Walenda, CEO of DSV Solutions argues that they can only be met by an experienced company. What are the requirements? Read the interview with warehousefinder.pl to learn more.


Warehousefinder.pl: The latest report by JLL has shown that once again, the largest amount of warehouse space in Poland was delivered to logistics providers. In 2015, companies from this sector had a 35 percent market share. Why is their share so significant?

Maciej Walenda, CEO of DSV Solutions: Because Poland has become an excellent location for warehouses of all types. This is due to many reasons. The most popular one, which is always mentioned in this context, are low labour costs. This is one of the things that attract investors to Poland. In my opinion, however, a much more important argument in favour of our country is the quality that the Polish market can offer. In addition, the potential for the expansion of warehouse infrastructure is enormous. On the logistics side of things, Poland is the “last secure foothold” next to the Eastern border. This is yet another reason allowing clients to move their warehouse stock to Poland. Our country’s location is perfect for distributing products in the East. After all, many of the projects that we are supporting are not just focused on the Polish market, but also on distribution to neighbouring countries.

How much does outsourcing help in the development of the Polish logistics industry?

Over the years, clients’ awareness of the possibility of outsourcing warehouse services to an external company has changed. Even though they used to have some concerns about this solution, they are now increasingly willing to implement it. Many companies have realised that organising transport and warehouse networks on their own is extremely difficult, and most importantly – potentially unprofitable. On the other hand, logistics companies can offer state-of-the art solutions that make it easier to organise the chain of supply, together with highly trained staff. We simply know how to effectively arrange transport.

Moreover, outsourcing gives access to a full range of logistics services – from handling receipt and issue operations, collecting orders, packaging, and managing returns to additional services such as designing and preparing promotional packages, repackaging, labelling and tagging. Besides, with the increasing specialisation of the services offered by logistics providers, the confidence in outsourcing logistics increases as well. Because of the high quality of service and the benefits of synergy with other projects, companies from various specialised industries are more willing to outsource the logistics services for their products.

What are the other advantages – apart from the savings mentioned before – that come with logistics outsourcing?

Key benefits include consolidated deliveries, full tracking of goods and ensuring that clients receive tailor-made solutions that meet their needs and expectations. Moreover, IT solutions are a crucial element of successful collaboration with external providers. They can greatly facilitate client’s warehouse management. Mobile applications for salespeople, which have been introduced in DSV solutions, are an excellent example of this. They allow sales representatives to analyse the stock levels for their offered product range and check their availability in the central warehouse from any place in the world using their mobile devices. During a sales call, the solution enables them to assure their clients that they are able to make the delivery. Thus, it is possible to confirm that the ordered quantity is available without the need to contact several manufacturing plants or suppliers.

There is, however, one thing that clients should keep in mind. In order to take full advantage of the potential of logistics outsourcing, one has to make sure that their future partner has sufficient experience and fulfils the requirements needed to provide effective service for the given product group. The key requirements include: full control over the supply chain, real-time insight into their operations by means of integrated IT systems and full identification of products throughout the entire supply chain. The pharmaceutical industry is a great example of that. We have been supporting this industry in the Polish market since 1995. Our clients appreciate that we are able to recommend many proven solutions that support the service and make it more secure.

Especially that pharmacy is not an easy business.

To provide logistics services to the pharmaceutical industry, logistics providers must fulfil numerous complex requirements which are imposed by the market and the law. Fulfilling them is just the first step that has to be made to provide services to such a demanding industry. A logistics provider must cope with constant supervision over the implementation of procedures imposed by the state authorities, as well as successfully adapt to client demands. Each of the processes in providing services to the pharmaceutical industry is supervised by the relevant state authorities, which necessitates adopting appropriate practices.

For example, one of the basic prerequisites is ensuring appropriatestorage conditions. Another equally important requirement is maintaining full temperature continuity and preventing extreme fluctuations in this respect, no matter how short-term. In the case of medicines, even a minimum divergence can affect the structure of the chemical substance and render the product unusable.

How does DSV Solutions cope with these challenges?

We are one of the most specialised companies providing services to this market segment. We employ pharmacists who constantly monitor warehouse processes and verify the applicable, frequently changing regulations. Above all, they eliminate potential risk in the supply chain. Such tasks require close cooperation with the quality assurance departments of our clients, as well as maintaining strict discipline. This is the only way that allows us to ensure high quality parameters in terms of logistics, but most of all in terms of security of these sensitive products.

In case of providing services to such a sensitive industry as pharmacy, the logistics provider must also accept great responsibility.

The burden of responsibility is disproportionately higher than in any other industry. As a logistics provider, we are not just responsible for the client’s image and the accuracy and timeliness of deliveries, but also for fulfilling numerous critical requirements related to the logistics process. Meeting these requirements guarantees that pharmaceutical products maintain adequate properties.

Obviously, your company’s leading growth area is the healthcare industry, but you are also actively working on developing services for the FMCG industry.

Exactly. This is also an area where we have considerable experience. I keep emphasising this, as experience is an extremely important consideration when choosing a logistics provider. Many years of active work on improving processes when providing services to many clients enable a provider to gain a broader perspective and offer solutions which can guarantee high-quality service while eliminating potential risks. It is worth to see the provider’s case studies, which attest to their ability to effectively implement processes, as well as learn about the experience of other clients. This kind of credentials allows for realistic assessment of the provider’s competences and identifying their competitive edge. Another important issue is their ability to cooperate closely and look for savings together with their client. At every stage of the process, it is possible to identify areas for potential improvement. However, to achieve the most far-reaching effects, close cooperation between the client and the provider is key. From the perspective of logistics providers, the FMCG industry is an extremely attractive market, but also a very peculiar one.

Why?

There are several critical points. We should mention the volatility of volumes throughout the month, irregular changes in the number of orders related to sales opportunities, and unplanned amounts of returns from e-commerce orders.

This sector is also very quick to react to changes in the economy.

Yes. At the time of an economic slowdown, the consumption naturally shifts towards cheaper products. However, from a global perspective, the pace of growth in our clients’ turnover is constantly increasing. At the same time, clients are trying to intensify their marketing efforts and thus generate much larger turnover in the area of additional services. The key to success is close cooperation with clients and exchanging information on forecasts, not only with regard to the entire turnover, but also taking into account particular assortment groups or planned promotional campaigns.

What challenges are you presented with as a company providing services to the FMCG industry?

The distribution system is dependent on client needs and adjusted to the needs of a specific project. We fully monitor the flow of goods, up to the level of product batches or expiration dates. We have to be able to withdraw goods in a very short time, in line with the clients’ expectations, as well as sort the assortment in a very detailed way, also from such demanding distribution channels as e-commerce. When it comes to automation, providing logistics services without the use of IT tools seems impossible today. The requirements related to the speed of the flow of data and its complexity level are so high that any form of manual service would undoubtedly become a bottleneck in the entire process. In DSV Solutions, we are constantly working to improve our tools in a way that increases the efficiency, responsiveness and transparency throughout the entire supply chain. 


Tomasz Olszewski
Tomasz Mika