In greater detail 01/20

A question of chemistry

Good things come to those who wait

Merck, the oldest pharmaceutical and chemical company in the world, and Rhenus Logistics celebrated almost ten years of cooperation in June 2019. The French Rhenus subsidiary has also been operating a warehouse at the port of Strasbourg exclusively for Merck’s use since last year. Manfred Fischer, Head of Distribution EMEA, LATAM & Global Transport Merck Life Science, and Laurent Schuster, CEO of Rhenus Logistics France, talk about recipes for success, challenges and future prospects.

Laurent Schuster
After studying at Paris Dauphine University, Laurent Schuster spent 15 years working in industry. He moved to the British company, Wincanton, as its Financial Director in 2008. Schuster has been managing Rhenus Logistics in France since September 2018.

Manfred Fischer
Manfred Fischer studied chemical engineering and has been working at Merck for almost 34 years, about 30 of them in various positions in the supply chain and logistics divisions. He is currently responsible for the distribution of life science products in the EMEA (Europe/Middle East/Africa) business region as well as Latin America.

Please tell us a little about the early days of your partnership in France. How did it materialise and how has the customer relationship developed during the last few years?

Schuster: After we initially took over the customs clearance operations for Merck, transport and logistics activities were gradually added to the portfolio. Rhenus in Strasbourg also expanded its services in line with the growth of Merck’s production site in Molsheim – which is only about 25 kilometres from Strasbourg – and finally established a dedicated warehouse for Merck.

Fischer: The working relationship between the Rhenus team and the Merck team in Strasbourg is intensive and contact takes place almost every day. This pays off in the end because it creates good mutual understanding and excellent service.

Excellent service particularly requires employee expertise and suitable infrastructure. Any storage of pharmaceutical and chemical products is rightly subject to high standards. How have you implemented them in the warehouse?

Schuster: We have a special quality team and comply with a large number of specific regulations in the pharmaceutical and health sector. Our employees are also trained to handle dangerous products at low temperatures.

What challenges have you faced so far in your work together?

Fischer: We’re fully aware that we’re not an easy customer. It’s true that seasonal fluctuation does not play a great role, but our standards for quality and service are very stringent. Any company needs a long learning curve to implement these requirements. We have to be aware of the fact that the quality standards and the specific requirements will also continue to grow.

Schuster: Our greatest challenge has been to train our employees so that they become logistics experts for Merck. The spectrum of products is broad and ranges from small bottles of antibodies to filtration units that weigh several hundreds of kilos. However, we can cope with the customer’s requirements very well with the warehouse space that we have and our IT tools.

Mr Fischer, what are the criteria that you use to select a logistics partner and why did you decide to work with Rhenus?

Fischer: We focus on long-term partnerships with our warehouse services providers. Rhenus is a family-managed business like ours and it also thinks ahead on a long-term basis.

What do you believe are the crucial factors to ensure that a customer and service provider can work together successfully?

Fischer: In addition to having a long-term working relationship, it’s very important for us to have a well-coordinated strategy, an intensive exchange of ideas at a working level and, in the end, trust too.

Schuster: Close communications enable us to understand our partner’s problems and find solutions together. This will only work if the services provider understands its customer’s needs and considers the latter’s obligations too. An ability to respond and speed in introducing new projects are also essential elements.

To what degree have the logistics operations for your products continued to develop as a result of digitalisation and technical innovations during the last few years?

Fischer: We’re constantly improving the IT systems on both sides. We’ve put a new warehouse management system into operation at Rhenus in Strasbourg and this has been managed very professionally; at Merck, we’re now in the process of introducing a new ERP system to manage our global operations.

What kind of improvement potential can you still see for logistics processes along your supply chain?

Fischer: We assume that we’ll be able to achieve significant improvements in our supply chain and in our stocks by standardising our IT systems. Until we’ve achieved this, we’re constantly optimising our processes. We’re fully aware that this will only work if we include our logistics partners.

Schuster: The degree of digitalisation for processes needs to increase even further. Our customers must be able to communicate the status of orders to their clients in real time, for example, and we need to be in a position to change delivery addresses, even if the goods have already left our distribution centres.

Dare to take a look into the future: what will warehouse logistics look like in ten years from now?

Schuster: Employees will certainly continue to work in our warehouses and be supported by robots. The warehouse of the future will have to be very flexible and adaptable and have IT systems that offer greater durability, flexibility and intuition for users. Rhenus has set up an international innovation group in order to be equipped for the future.

And how do you see Merck’s organisation in the future, Mr Fischer?

Fischer: We’re currently growing much faster than the market at Merck Life Science and expect this development to continue. This means that we’ll have to manage the increase in volumes and the mounting requirements for warehouse space in a proactive manner. Tomorrow’s logistics will be even more digital; quality requirements will continue to increase and our major customers naturally won’t stop defining new standards either. The future will therefore be exciting – both for Merck and for Rhenus.

null

Key figures for the warehouse:
- 18,000 square metres
- 15,000 different products
- 50 freezers
- 7 different temperature conditions


Distribution from Alsace
Rhenus Logistics in Strasbourg has been operating
a separate logistics warehouse for Merck since
the beginning of 2019. The logistics specialist checks,
packs and prepares the products for shipment –
most of them on the day when the order is placed.

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