How Cardinal Health Is Transforming the Pharmaceutical Supply Chain

March 01, 2022

Healthcare distributors, as logistics experts of the supply chain, are constantly innovating to increase efficiencies, optimize operations and generate solutions for an ever-evolving ecosystem — while continuously ensuring the safe, efficient and reliable delivery of 10 million medicines and healthcare products every day.

HDA member Cardinal Health is one such organization that continues to reimagine the future of the supply chain, partnering across industries to develop new solutions to ensure medicines and supplies get where they need to go.

Partnering for Modernized, Sustainable Packaging

Data has shown the healthcare sector contributes approximately 8.5 percent of U.S. carbon emissions. To help reduce this footprint, healthcare distributors are focusing on developing sustainable, cost-effective solutions. At the end of January 2022, Cardinal Health and Ember Technologies Inc. announced their partnership to develop the Ember Cube. This self-refrigerated, cloud-based, trackable shipping container is the first of its kind and offers a more secure and cost-effective container that is also eco-friendly.

This innovative packaging technology provides a revolutionary cold chain shipping solution that can keep contents at 41°F degrees for up to 72 hours. This technology offers great promise for how the supply chain can move critical medicines and vaccines that require specialty shipping processes to ensure product integrity.

In addition to the security benefits, the container also boasts exceptional benefits to the environment given its reusability and will significantly reduce the amount of medical shipping containers entering landfills. By the end of this year, Cardinal Health plans to have integrated the Cube at critical mass, resulting in a reduction of up to 7 million pounds of packaging, including single-serve cardboard boxes, Styrofoam protectors and disposable icepacks.

This work is just the latest example of Cardinal Health’s commitment to leveraging new technologies to create opportunities for better patient outcomes and reduce the industry’s climate impact.

Delivering Medicines with Drones

In a world where consumers can get groceries and retail goods delivered on the turn of a dime, the expectation for immediate delivery and constant availability is becoming increasingly imposed on all sectors. In the healthcare industry specifically, expedited delivery of specialty medicines and other products can truly be the difference between life and death. To address this and other challenges, Cardinal Health is taking logistics innovation to new heights — testing the use of drones to speed up delivery and cut transport costs for time-sensitive shipments, including pills, inhalers and other items.

In November 2021, the company announced a new pilot program with Zipline International, a drone operator that designs, manufactures and operates the world’s largest automated on-demand delivery service. Through the program, Cardinal Health will leverage aerial drones carrying cargo of up to four pounds that will operate from a distribution center in Kannapolis, N.C., and can reach local pharmacies within a 10-mile radius in less than 30 minutes.

The drones used in the program are about 6 feet from head to tail. They would travel 300 to 400 feet above the ground over a variety of terrains to drop packages with parachutes into landing zones that are about the size of two ordinary parking spaces.

The program could fundamentally change how the industry addresses everyday challenges like restocking inventory and overcomes extraordinary obstacles such as natural disasters and emergency situations in remote areas.

Increasing Product Visibility with New Technologies

The recent COVID pandemic highlighted the challenges of managing inventory within the supply chain, and how companies can struggle to effectively predict demand, especially in times of public health crises. At the outset of the pandemic, Cardinal Health began working with freight-tracking software startup FourKites to gain better visibility into its delivery network and maximize provider access to much-needed products.

By leveraging FourKites’ tracking and analytics capabilities, Cardinal Health developed a next-generation cognitive supply chain network, which combines real-time supply chain visibility, machine learning and artificial intelligence capabilities to facilitate the flow of inventory throughout the supply chain. This next-generation network will transform how the healthcare supply chain operates, helping distributors predict demand, better manage and protect products during transit, and track and account for products as they are delivered.

Building on this effort further, Cardinal Health recently announced a new partnership with Kinaxis to leverage their RapidResponse platform to increase medical product visibility and supply chain agility. The result of these efforts is a leaner, more optimized healthcare supply chain and better outcomes for patients.

Click here to learn more about the role and value of distributors in our healthcare supply chain.