Dive Brief:
- Siemens Healthineers said Tuesday it is opening logistics “mega depots” in California and New Jersey to increase available parts inventory by 30%.
- The company is leasing new warehouse space on both coasts to supplement its existing depot in Memphis, Tennessee, and reduce risks related to supply-chain disruptions and demand surges.
- Siemens said boosting its parts inventory and logistics capabilities will support later cutoff times, same-day delivery within 300 miles and more next-flight-out options.
Dive Insight:
Siemens, like many of its peers, has faced logistics challenges in recent years. The company said supply chains have been under pressure since before the pandemic because of increasing global demand for goods and transport. Severe weather and geopolitical uncertainties have added to the challenges.
In response, Siemens is working with the contract logistics provider GXO to lease additional warehouse space. GXO is now providing warehousing and inventory management to Siemens in Dayton, New Jersey. That facility, in the New York metropolitan area, increases the company’s capacity to serve customers on the East Coast.
Siemens plans to begin operations at a site in Manteca, California, early this year. Opening sites near major cities on both coasts will increase the number of customers that are within same-day delivery range and will supplement Siemens' existing site in Memphis.
The company, which also has a network of U.S. stocking locations close to major customers, said the new depots will mitigate supply-chain uncertainty and help reduce its environmental impact through efficient delivery.
Siemens referenced spare parts on its first-quarter earnings call earlier this month. A valuation related to spare parts inventory negatively affected profit margins at its imaging business in the quarter.
