Sharing in vibrant life science ecosystems

Intralogistics expert, Tim Newton, explains how DLL partners closely with its customers to understand the unique needs of their business, and provide customised financing solutions that help improve supply chain continuity and lower the total cost of asset ownership.

“With new intralogistics installations often suffering from long lead times, it can prove difficult for businesses to finance projects through traditional structures,” says Tim Newton, Senior Account Manager, Intralogistics at DLL. “With shifting market trends and changing economic landscapes, companies are demanding increasingly flexible, customised and usage-based finance solutions.”

Tim, who is based in the UK, recently took on a new role within DLL and is now part of the growing team of intralogistics experts at DLL located across the world. His focus is on supporting customers in the UK and Ireland as demand for automation increases.

“Some intralogistics and automation projects may take 18 months to two years to complete, meaning the drawdown of funds may take place slowly over many years,” explains Tim. In addition, the customers’ internal approval process for those projects can take time, as the funding of the installation often involves many stakeholders within the organisation.

Supply and demand

However, shared scientific equipment is only viable if three parts of the equation are balanced. First, you need to offer state-of the art equipment. Second, you need sufficient demand for the equipment, which means it only really works on larger campuses. Finally, the access, maintenance, and servicing require proactive monitoring and management on a day-to-day basis. Because of this, operating a shared scientific service has the potential to be expensive. However, there is new payment model that has the potential to reduce costs for the ecosystem operator – “Pay-per-use” (PPU). PPU is an arrangement between a customer and a financing company where the customer only pays for equipment, made available by the financing company, as they use it. There is also the possibility to share in the revenue between the finance company and the ecosystem operator. PPU for scientific equipment has started to gain traction in the US and it has now landed in the UK. PPU solutions for shared scientific equipment provide many benefits, including reducing investment barriers new and costly technologies.

Collaborating for access to state-of-the-art equipment

For the regular UK science park there is a challenge in that the demand from tenant companies will likely be too small to justify the notion of shared scientific equipment. However, many science parks are based near major R&D hubs, including hospitals and academia; in aggregate a local life science community that could provide the footfall to justify a shared scientific equipment service. Now, from previous experience I am acutely aware that truly effective partnerships between academia, hospitals and science parks is easily said but is often challenging in practice! That said, this would be an initiative that need not require a large capital outlay and could grow organically in-line with demand, with all the equipment itself being externally financed. For those partnerships that have the local demand and commit to the journey, the prize could be significant - improved collaboration, innovation, and, ultimately, economic growth for the region. 

This article represents the opinions of Dr Stephen Franklin based on information and research he considers to be reliable. The content is provided for informational purposes only and should not be considered as investment advice. DLL does not assume any liability for the accuracy of the information contained in this article or for any errors or omissions herein. Dr Stephen Franklin receives a recurring consultation fee from DLL.