Expansion of healthcare business with new Memphis location

For this purpose, the distribution center, which has been expanded to around 320,000 square feet, has now been officially opened with the cutting of the opening ribbon. The new client at the site is one of the world’s leading medical technology companies, for which Arvato will handle all logistics and distribution in the US.

“The project supports our growth strategy in the healthcare market and enables us to enter the U.S. market with one of the leading companies in medical technology,” says Dr. Thorsten Winkelmann, President Arvato Supply Chain Solutions. The U.S. medical device market is considered attractive with good growth opportunities as it accounts for more than 40 percent of the global medical device market. For the expansion of the healthcare business and for the client’s central warehouse strategy, the new location is ideal to ensure fast delivery to the customers. For example, the FedEx World hub and Memphis International Airport, the world’s second busiest cargo airport after Hong Kong, are in close proximity to the new distribution center. “With the centralization project that we have already implemented for this client in Europe, the company now has access to a global multi-warehouse solution – just like the one we offer pharmaceutical companies within Europe," explains Dr. Thorsten Winkelmann.

In Memphis, Arvato is consolidating the logistics for medical products from the client's three business units, which were previously handled at two separate locations, under one roof. The expansion of the warehouse space from 215,000 to a total of around 320,000 square feet was followed by the implementation of the intralogistics system. At the heart of the warehouse automation system, a modern AutoStore system with a capacity of 50,000 bins and 52 robots was installed for this purpose – a system that Arvato is already using at other locations to increase process efficiency in the warehouse. "In the Memphis logistics region, however, our AutoStore is the first automation solution of its kind and is generating corresponding interest in the market," says Stephan Hackert, Vice President und Industry Lead Healthcare Arvato US. For example, the medical technology client’s products are very well suited to the tote storage of the AutoStore system, which meets all the requirements for a flexible automated storage and picking solution. It is also expandable, has productive and easy-to-operate goods-to-person stations, and is extremely energy-efficient. "With the implementation of this project as well as the official opening, we have succeeded in creating several hundred new jobs,” explains Stephan Hackert.

For Arvato, the commissioning of the state-of-the-art distribution center was also a lighthouse project, with charisma for other companies. Memphis, for example, is considered a hotspot where numerous medical technology companies have settled. A number of research and development facilities, production sites and sales offices of Arvato clients are also represented there and in the surrounding area – from the healthcare industry as well as from the consumer products and tech sectors. Mitat Aydindag, President Arvato Supply Chain Solutions USA: “These are good conditions for further driving and securing the organic growth of Arvato Supply Chain Solutions in the U.S.” On this path, Arvato is not limiting itself to taking over warehousing and transportation. Dr. Thorsten Winkelmann: “In the USA we also want to offer our end-to-end supply chain solutions, e.g. orthopedic loaner management, and work for other healthcare segments, e.g. health supplements as well as servicing new channels, mainly direct-to-patient delivery.”