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NHS Supply Chain has awarded the contract for the management of its logistics services to GXO. The company will be taking over the contract for storing and delivering healthcare products to the NHS on behalf of NHS Supply Chain from October this year, when the current outsourced Logistics Services Provider’s contract expires. The contract is for an initial period of seven years, with a possible extension of up to 36 months.

NHS Supply Chain chief executive officer, Andrew New said: “We’re pleased to announce GXO as the new service provider for our logistics services. Running our eight distribution centres across England and keeping our significant fleet of more than 300 delivery vehicles on the road is a key part of what we do to supply the NHS with more than 35 million healthcare products every year. We’re an important part of the healthcare system, ensuring the NHS can put patients first. As well as running our normal logistics services, looking forward to the future, we will be developing our logistics services with GXO to best meet the growing needs of the NHS.”

“We are extremely proud to have been selected to serve the NHS as its new logistics partner,” said Gavin Williams, managing director, GXO UK & Ireland. “Combining our sector experience with the technology expertise that supports many of the UK’s leading businesses will optimise the NHS’s logistics services for healthcare providers and taxpayers. We are committed to an excellent quality of service to hospitals and patients at home, increasing productivity and supporting our NHS so that it can focus on patients, its ultimate priority.”

GXO will be contracting with Polar Speed to provide NHS Supply Chain’s Home Delivery Services. There will be a transition period over the next few months to ensure a smooth handover of sites and teams from the current logistics provider to GXO and Polar Speed, ensuring the NHS continues to receive the service it needs.

The role is to source, deliver and supply healthcare products, services and food for NHS trusts and healthcare organisations across England and Wales. Supply Chain Coordination Ltd (SCCL) is the company at the heart of NHS Supply Chain. It provides oversight and operational management for NHS Supply Chain and its service providers. SCCL is the legal entity through which NHS Supply Chain undertakes its procurement services and transacts with customers and suppliers. Whilst its shares are owned by NHS England, SCCL is a separate organisation.

Why IT Modernisation is Critical

Warehouses have evolved far beyond simple storage spaces; they now serve as strategic hubs for managing complex supply chain processes. From inventory management to real-time data analysis, a robust IT infrastructure is essential for maintaining efficient and scalable operations. According to Manhattan’s ‘State of Warehouse Operations’ report, outdated IT hardware ranks as the biggest challenge in the industry.

Failing to modernise IT systems leads to inefficiencies, higher operational costs, and difficulties in scaling operations to meet growing demands. Additionally, legacy systems expose businesses to security risks as outdated software becomes vulnerable to breaches, which could damage a company’s reputation and bottom line.

The Dangers of Outdated IT Infrastructure: Learning from the NHS

A high-profile example of the risks posed by outdated IT systems is the NHS, which has faced significant operational challenges due to its aging infrastructure. The WannaCry ransomware attack in 2017, which targeted the NHS’s outdated systems, disrupted services across the UK and highlighted the critical need for IT upgrades. The lesson here is clear: businesses that fail to modernise risk severe disruptions, operational setbacks, and even reputational damage.

The NHS example highlights the broader implications of failing to invest in modern IT systems. As software ages and support ends, critical data becomes vulnerable, and organisations face reputational damage alongside operational setbacks. For warehouses, the lesson is clear: delaying IT modernisation can lead to similarly severe consequences, with inefficiencies, rising costs, and the inability to scale or adapt to evolving market demands.

The Business Case for IT Modernisation in Warehouses

With 79% of businesses acknowledging the urgent need for IT upgrades in their supply chain operations, the message is clear—modernisation is essential. A well-integrated, up-to-date IT infrastructure creates a data-driven, connected ecosystem that optimises warehouse operations. This includes everything from real-time inventory tracking to analytics that help reduce stockouts and optimize space.

Unified systems enable seamless communication, resulting in faster order fulfillment, on-time deliveries, and higher customer satisfaction. Additionally, adopting automation and robotics helps streamline workflows, allowing human workers to focus on more complex, value-added tasks. Moreover, the data insights gained from modern IT systems empower better decision-making, enabling businesses to swiftly adapt to changing demands and market trends.

In a competitive landscape, modernising IT infrastructure is no longer an option—it’s a necessity. The sooner businesses act, the better positioned they will be to navigate the future of supply chain management.

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