DHL to manage U.K. health service’s supply chain, unions oppose deal

DHL to manage U.K. health service’s supply chain, unions oppose deal    The United Kingdom Government’s Department of Health has awarded a 10-year contract worth '1.6 billion ($3 billion) to DHL for the German company to take over the supply chain management of England’s National Health Service.
   DHL is the logistics arm of German postal and logistics conglomerate Deutsche Post World Net who purchased U.K. firm Exel in December.
   Under terms of the contract, DHL will run a division called NHS Supply Chain, on behalf of NHS Business Services Authority, and be responsible for delivering all procurement and logistics services across an initial 500,000 products to support 600 hospitals and other health providers in England. It is estimated that '22 billion ($41.8 billion) worth of orders over the 10-year contract period will be affected.
   Previously, the not-for-profit organization NHS Logistics had been supplying England’s health units. DHL has targeted more than '1 billion ($1.9 billion) savings over 10 years and said it will create an extra 1,000 jobs in two new distribution centers in the U.K. due to open in 2008 and 2012.
   “This contract is both good for staff and good for the NHS. We are committed to targeting savings on behalf of the Department of Health that can be directed back to patient care by building upon the success of both NHS Logistics and some of the scope of the NHS Purchasing and Supply Agency,” said John Allan, chief executive officer of DHL’s logistics division.
   “The contract will ensure that NHS Trusts get access to a wide range of high quality, innovative products that will be selected by having extensive dialogue and testing procedures with clinicians. We are thrilled to play such a major part in this change to manage and deliver a world-class supply chain for the NHS,” Allan said.
   The deal, which will see about 1,700 employees from NHS Logistics transfer to DHL, has been strongly opposed by trade unions. Unison, which has hundreds of members from NHS Logistics, are balloting members about possible strike action.
   “Unison members are proud to work for the NHS and feel betrayed by a government that is handing them over to DHL, like one of the packages they deliver,” said Dave Prentis, Unison’s general secretary.
   “It is an award-winning organization delivering a first class service. The government’s decision to privatize it is driven by pure dogma and an obsession with market testing,” Prentis said.
   “This is a very sad day for the NHS,' said Karen Jennings, Unison's head of health. 'The government has not listened to the workforce or to reason. Staff across the NHS will be watching this privatization deal, which will be viewed by many as symbolic of what is to come.”
   “Why break up a winning team like NHS Logistics and sell it off to a German parcel company? It makes no sense when there is no doubt that NHS Logistics is an NHS success story. We will fight back to keep these jobs in the NHS,' Jennings said.
   The result of Unison’s strike ballot is expected next Monday.