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Investor Relations

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Business solutions for the next public health emergency

Oct 12, 2021

DUBLIN, Ohio, Oct. 12, 2021 /PRNewswire/ -- Cardinal Health (NYSE: CAH) announced today its Strategic Stock Solution now serves nearly 40 hospitals and health systems nationwide, just one year after its launch.

In October last year, the U.S. healthcare system faced what was one of the deadliest surges of the pandemic to date1. As health systems began placing massive orders for COVID-19 supplies and personal protective equipment (PPE), Cardinal Health acted with urgency to create its Strategic Stock Solution, now a critical blueprint for pandemic preparedness which gives customers the ability to order and store supplies in a Cardinal Health warehouse and provides product shipping within 72 hours of request. 

"Last year around this time, our customers needed to once again quickly stock and store massive amounts of inventory, track that inventory to ensure longevity of stock, and move the inventory from storage to the point of care," said Sara Nunez, senior manager, product and solutions marketing, Cardinal Health. "We were able to develop this solution quickly due to our expertise and offerings already in place, from product distribution and storage to shipping. We connected these under one umbrella to manage everything from point of purchase to the moment the supplies are used in a healthcare setting."

How it works

Cardinal Health's Strategic Stock Solution solves for several challenges:

  • First, health systems need a way to make purchasing decisions based on real data, so they know exactly what supplies – and how much – to order. Using customer data from the first COVID-19 outbreak, Cardinal Health created a pandemic blueprint with 44 products that experienced significant demand spikes during COVID-19, all grouped into four major categories based on use:
    • Treat (artificial airway accessories, bronchoscopes, ventilator accessories, nebulizer accessories and more);
    • Protect (wipes, hand sanitizer, lab coats, eye shields/visors, isolation gowns and more);
    • Diagnose (medical thermometers, swab collection, pulse oximeter units and more) and
    • Vaccinate  (syringes, needles and more).

"This blueprint means that supply chain leaders can easily see what their hospitals or health systems will need in times of emergency – they no longer have to guess what will be in greatest demand," Nunez said.

  • Most health systems don't have enough storage space for their stockpile orders. The amount of space needed to store a 90-day supply of inventory depends on the size of the hospital or health system. To store a 90-day supply of PPE, for example, a stand-alone 350-bed hospital requires 260 pallets and 3,500 square feet of warehouse space. A major, urban health system with approximately 5,000 beds would need 50,000 square feet of warehouse space (nearly the size of an American football stadium) to store a 90-day supply.
  • Hospitals and health systems typically need logistical help to access their stored inventory. "Transportation and logistics play a major role in critical crises," said Rick Magyar, senior manager, product management and development for Cardinal Health OptiFreight® Logistics, a premier shipping offering that delivers total logistics management for the healthcare industry. "Last year, we learned that healthcare systems and hospitals desperately needed help shipping critical supplies out faster and connecting with carriers like FedEx when shipments faced delays. Having a strong logistics solution in place creates greater resiliency and helps customers react more seamlessly to a public health emergency."

Uniquely positioned to be a strategic stock partner

As a distributor and medical products manufacturer, Cardinal Health's scale and supply chain expertise put it in a unique position to develop this solution.

In addition to having been selected by the U.S. Department of Health and Human services to support the Strategic National Stockpile, Cardinal Health has helped health systems navigate the intricacies of ordering, storing and receiving critical products throughout the pandemic:

  • Cardinal Health interfaces with many hospitals' inventory and materials management systems, referred to as MMIS, to streamline ordering processes.
  • The company tracks inventory using real-time and predictive analytics of product shelf life, usage and rotation within warehouses – and at the point-of-care with Cardinal Health WaveMark™.
  • It added nearly 1.5 million square feet to its regional replenishment centers (RC) – 1 million of which was a brand-new facility in Channahon, Illinois, for customer-owned inventory specifically for Strategic Stock Solution.
  • Cardinal Health manages shipping for worldwide deliveries of pandemic stockpile supplies, including same-day shipping services, time-critical and temperature-controlled delivery management, fixed pricing for outbound shipments, and real-time visibility and tracking for shipments across the continuum of care via OptiFreight® Logistics.

Overall, Strategic Stock Solution has allowed customers to resume procedures while providing them with increased supply chain resiliency and efficiency as well as increased proactive supply chain visibility. It also has prepared customers for ongoing manufacturer backorders and manufacturer product allocations.

"With Strategic Stock Solution, we remain laser focused on getting critical PPE to the right place at the right time – which enables front-line caregivers to remain focused on their patients," Magyar said. "A year after its launch, the need remains strong for a trusted healthcare partner that can provide end-to-end solutions to help better manage the healthcare supply chain and provide peace of mind to customers through future pandemic preparedness planning."

Today, Strategic Stock Solution continues to be support health systems as they the fight COVID-19, and it will transform how the industry manages supply chain in the future, including during the coming flu and respiratory syncytial virus (RSV) season. For example, we are offering a brand-new respiratory reserve inventory program, which allows customers to order a stockpile of select rapid diagnostic tests and collection kits for RSV, flu, COVID and Strep A ahead of the season. These inventory orders are then stored in a local-to-the-customer warehouse and available whenever the customer needs supplies.

"This solution goes far beyond addressing the challenges of how to handle PPE," said Nunez. "It's a critical innovation for the healthcare industry and can dramatically improve the health care supply chain."

Magyar added, "While we can't prevent health emergencies, we can certainly help our customers to be best prepared to continue caring for their patients."

To learn more about Strategic Stock Solution, click here.

About Cardinal Health

Cardinal Health (NYSE: CAH) is a distributor of pharmaceuticals, a global manufacturer and distributor of medical and laboratory products, and a provider of performance and data solutions for health care facilities. With 50 years in business, operations in more than 35 countries and approximately 44,000 employees globally, Cardinal Health is essential to care. Information about Cardinal Health is available at cardinalhealth.com.

Contacts
Media: Cari Wildasinn, cari.wildasinn@cardinalhealth.com and (614) 757-8287
Investors: Kevin Moran, kevin.moran@cardinalhealth.com and (614) 757-7942

1 New York Times. U.S. Sets Coronavirus Case Record Amid New Surge. October 23, 2020.

 

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SOURCE Cardinal Health