DHL Secures New Contracts with the NHS and Orio UK

DHL has secured a contract extension with NHS Business Services Authority and won a new contract with Orio UK, an automotive parts supplier.

The NHS Business Authority announced that it has extended the current NHS Supply Chain service contract from 2016 to 2018. As part of the extension, revised terms will start from 1st October 2015 and operate for three years until 30th September 2018. The revised terms include an amended reward structure, where DHL is incentivised to deliver more value to the NHS, and in turn, cost savings to the tax payer. An open book contract management model is to be adopted.

The contract focuses on a savings target of £150 million to be delivered by October 2018, over and above the existing £150 million target set for March 2016. NHS Supply Chain has to date already achieved savings of £96.5 million against the March 2016 target.

NHS Supply Chain’s Chief Executive Nick Gerrard says: “We have worked hard to ensure that the extension agreement contains what our customers have asked for: more cash releasing savings to be delivered through NHS Supply Chain and greater transparency of our contract which will be achieved through an open book arrangement ”.

The main revised terms are:

• A target to deliver £150m of cash releasing savings to the NHS by the end of the contract in September 2018. This is in addition to the existing target to deliver £150m of cash releasing savings by end of March 2016.
• Greater transparency through the introduction of an open book contract management model.
• Greater flexibility to determine what and how services are provided (including the removal of the Master Services Agreement (MSA) exclusivity clause for procurement activity).
• Revised contract terms starting a year early (October 2015) to maximise the benefits of the changes to the NHS over the remaining contract period and extension term.

In a separate announcement, DHL Supply Chain has won a next-day delivery contract from Orio UK, the single supplier of original Saab parts. DHL Supply Chain will work with Orio at a new parts distribution centre in Hatfield, UK, to fulfil customer orders.

Orio guarantees free overnight deliveries on all orders placed before 2pm to Saab authorised service centres and garages. The partnership will support the delivery of a diverse range of parts such as service kits, brakes, airbags and batteries, including over 100 crash repair items which will unlock significant business for bodyshops.

“DHL’s expertise in the automotive sector and knowledge of aftermarket service has enhanced our operations and enabled us to offer a more competitive service to customers,” explains Corin Richards, Managing Director at Orio UK.

Bill Bacon, MD of Automotive at DHL Supply Chain, added: “Our new partnership allows us to work collaboratively with the sole UK supplier of Saab Original parts while growing our experience in the automotive sector by finding solutions to key customer challenges.