The healthcare sector is constantly changing. Supply chain and logistics teams are subject to constant change. Healthcare has struggled for a long time with the disruption and evolution of convenience in purchasing and supply chain experiences that drive consumerism in almost every industry. The COVID-19 pandemic, which has accelerated the shift to home healthcare in the past year, is a sign of the times.
Becker’s Hospital Review spoke recently with Josh Dolan (Vice President of Global Logistics at Cardinal Health) about the current healthcare logistics environment and how Cardinal Health is innovating for the future. He explained how Cardinal Health faces a number of challenges head-on to ensure it is not a follower in the space.
Cardinal Health’s secret to success: Innovative technology and great products.
Since its inception, Cardinal Health has had a competitive advantage through logistics and the supply chain. However, maintaining this source of differentiation requires that we embrace change. Mr. Dolan stated that “if this year has taught me anything it’s that there is always something new.” “We are very focused on recognizing the need to change and embracing it.”
Customers of Cardinal Health have shown a greater focus on reliability, speed, and efficiency. Cardinal healthcare logistics companies are committed to being healthcare’s most trusted partner and have made investments in its supply chain to ensure that customers are met wherever they are.
The company made infrastructure investments in the last 24 months to increase its distribution capacity in the Medical section and its third-party logistics business. This effort earned the company recognition in Gartner Healthcare Supply Chain Top-25 Masters category. Cardinal Health also increased its refrigerated capacity for its pharmaceutical segment in order to support its core business of specialty and pharmaceutical distribution.
To meet the increased demand for home medical care, the company has made changes in its supply chain and logistics. Cardinal Health, for example, has maintained its safety vigilance as it expanded patient delivery. The company is now focusing on providing better visibility to consumers about product locations. His team and Mr. Dolan continue to monitor whether direct-to-patient deliveries can continue at the same rate once the COVID-19 pandemic has ended. However, the logistics team recognizes that flexibility is crucial. They are working to build resilient capabilities that can support the business regardless of what happens.
“We have a history of great products and great global supply chains powered by cutting-edge tech,” Mr. Dolan stated. These areas are constantly being explored. When all of these things are combined with the customer at their center, it’s what makes us different. Our team strives to provide the best service every day. This is why we are healthcare’s most trusted partner.
Future-generation logistics solutions depend on infrastructure investments and technology, as well as partnerships
Cardinal Health continues to be a leader in global supply chain management and is currently exploring many logistics solutions. Cardinal Health has been increasing visibility throughout the supply chain, and FourKites, a supply chain tracking company, is playing a key role in this.
Mr. Dolan stated that “one thing we had been working towards, and the COVID-19 epidemic illuminated for us was that consumers expect high degrees of transparency and visibility; it is possible to see when their car-sharing ride is coming and where their online shipment is located.” Cardinal Health should be able to provide the same information about products in transit. Transparency and visibility are important for all customers, no matter if they’re at home or a pharmacy.
FourKites and Cardinal Health have partnered to create connectivity between all carriers in the network, from national carriers to small businesses to diverse businesses with just four or five tractor owners.
Cardinal Health is also using FourKites to help them develop a cognitive network to enable their logistics team to react and read proactively to any changes in the supply chain. This information allows them to make inventory decisions and ensure service levels are maintained at their highest level, even if there is a disruption in the supply chain.
Mr. Dolan stated that “it all comes back to providing an end-to-end solution and data-driven insights, and delivering on our promises no matter what’s thrown our way. Our partnership with FourKites has been a key building block in making these things possible and the investment is turning out to be even more valuable than we expected.
Cardinal Health is exploring new possibilities for physical transport, in addition to integrating systems to improve supply chain visibility. These include autonomously-guided vehicles for ground and aerial transportation and new storage solutions that increase customer convenience.
Logistical strategies for doing well and doing good
Cardinal Health’s supply chain team and logistics team has made it a priority to work with small businesses and other suppliers. However, this is also a company-wide goal for all areas that source products and services.
Mr. Dolan stated, “I’m extremely proud of the work that we’ve done internally with our sourcing group to explore new opportunities for expanding our partnerships with small- and diverse suppliers around the world.” We believe that this is a great investment in time and effort, as these providers are among the best in the network. This is a great example of doing well, doing right, and creating a competitive advantage for your business.
Cardinal Health has always focused on the development of new transportation equipment to reduce carbon emissions. Cardinal Health is constantly replacing its equipment and seeking new ways to improve its mileage per gallon. New trailer technologies, which improve fuel economy for trucks, are one example.
“With logistics, it is possible to continue to serve customers while reducing emissions,” Mr. Dolan stated. Traditional means such as transportation equipment will make some of this progress. We are also exploring other ways to reduce our carbon footprint such as consolidating freight, shifting from less-than-truckload to truckload, and switching modes to intermodal rail service. We have been using our dedicated fleet and backhaul capacity over the past few years to fill empty miles returning to distribution centers after making deliveries or servicing customers. We are good stewards of our environment and continue to look for ways to improve.
Cardinal Health has recently completed a pilot program for electric vehicles on the West Coast using advanced technologies. It is hopeful that the company will be able to reduce its carbon footprint by combining modern transportation technologies with traditional transport activities.
It takes a team effort to transform the logistics function
Cardinal Health believes that the company’s people and their dedication are key to its success. “We believe that the patient should be at the heart of all we do and that our teams can make a difference,” Mr. Dolan stated. When I reflect on last year and the experiences we had, it’s difficult to forget that the team members working in the field across the country were putting patients, doctors, and pharmacists first every day.
Cardinal Health’s logistics team understands that evolution must be embraced as a constant rather than a singular event in order to deliver on its promise of exceptional customer service. It is important to harness the potential of all members of the team and focus on customer-centered innovation as the key to success.
Mr. Dolan stated that his focus when leading his team was to continue to coach, develop, and place people front and center on the journey in order for them to achieve this transformation. From an industry perspective, I think it will be quite cool for people to see the changes we make over the next six to 18 months.