How we are responding to COVID-19.

Transforming the Pharmaceutical Supply Chain

Cardinal Health

Transforming the Pharmaceutical Supply Chain

The pharmaceutical supply chain is a complex network that connects drug manufacturers to distributors to drug wholesalers and pharmacists, and, finally, to patients. Multiple modes of transportation move pharmaceuticals from one link in the chain to another. Siloes all along the network have traditionally challenged both the efficiency and visibility of the supply chain.

Prior to the COVID-19 pandemic, the supply chain team at Cardinal Health had been seeking digital solutions and partners to help remove siloes and increase end-to-end visibility.

“Giving our healthcare customers real-time information about where their products are in the supply chain is critical,” said Sean Halligan, SVP of Pharmaceutical Supply Chain Operations at Cardinal Health. “Our customers need to know when to expect their delivery; patients’ lives can rely on it.”

Technology that allows real-time visibility into every aspect of the supply chain is relatively new – and it is enabling supply chain managers to revolutionize the network, ensuring that all parts of the supply chain are working together seamlessly.

The pandemic created real urgency for supply chain transformation. Suddenly there was an unprecedented and immediate need for personal protective equipment (PPE) – gowns, gloves, face masks, respirators and other equipment – to protect healthcare providers from infection so they could effectively care for patients.

“At the start of the pandemic, we were tracking PPE manually,” said Josh Dolan, Cardinal Health’s VP of Transportation. “We were phoning suppliers, couriers and intermodal rail systems to find product, and then to find our shipments. It was draining and slow-going – and certainly not scalable. What we needed was a solution like a ridesharing app – where you can watch the arrival of your driver, minute by minute – so we could see exactly where our shipments were and let our healthcare customers know precisely when to expect them.”

Enter FourKites – the leader in supply chain visibility. FourKites was founded in 2014 by engineer Matt Elenjickal, who’d served as a supply chain consultant to Fortune 50 companies and come to understand that the siloes within supply chains caused serious blind spots and disruptions for shippers and customers. No matter how sophisticated the supply chain systems, he said, they lacked visibility. “For example, shippers couldn’t tell where the trucks carrying their products were once they left a facility; they were at the mercy of the trucking company for updates.”

Elenjickal created FourKites, the first company to apply software as a service (SaaS) and GPS-enabled electronic logging devices (ELD) that allow shippers to optimize their supply chains based on actionable data and predictive intelligence. Today, FourKites has the largest, densest visibility network in the world. It provides real-time data from GPS, ELD, telematics networks, mobile devices and automatic identification systems (AIS) to track data, and fine-tunes its global estimated arrival accuracy with proprietary, location-specific tracking logic. The company tracks more than two million shipments every day, across every mode of transportation, in 176 countries.

FourKites works across all industry verticals, and its work in the pharmaceutical space has increased in the last couple of years. “COVID-19 hit the pharmaceutical industry hard, and we wanted to help,” Elenjickal said. “Cardinal Health was a compelling potential partner: Its leaders think big and want to innovate. It was clear from our first conversations that they wanted to build a truly revolutionary cognitive supply chain.”

Cardinal Health’s size also was appealing, Elenjickal said. “Cardinal Health is one of the largest distributors in the world, and we can work together to innovate and create capabilities at scale, covering every mode of transportation used in the healthcare industry.”

In March 2020, Cardinal Health and Elenjickal’s team created a pilot to track PPE shipments from manufacturing plants to Cardinal Health distribution centers throughout the country.

“The pandemic demanded we act quickly,” Dolan said. “We needed to move from traditional spreadsheets, emails and phone calls to technology-enabled system that makes adjustments and decisions all along the supply chain and ensures that inventory flows smoothly. That dramatically changes the way we work: We distribute and deliver products more precisely, serve our healthcare customers better and reduce costs.”

Together, the companies also built a customized system to track temperature-sensitive medical products, now used in all Cardinal Health transport modes in the U.S. “That allowed us to track a critical truckload of pharmaceutical supplies headed for a hospital in New Orleans from Jackson, Miss., this winter, when severe weather forced the truck to pull off the road,” Halligan said. “We could see exactly where the truck was, and we knew the second that it was able to start moving again, so we could let the customer know when they could expect their shipment.”

The technology behind this real-time visibility is one of the fastest-moving areas within the supply chain, Halligan said. “FourKites’ technology is getting more precise all the time. The healthcare industry needs and deserves to have the highest-level of precision that exists. It means our supply chain moves more quickly, resulting in better outcomes for the patient.”

Visibility allows Cardinal Health to quickly shift shipment origination sites, if necessary. “If a distribution center is closed due to extreme weather, for example, we can serve the customer, temporarily, from another distribution center,” Halligan said. “Visibility allows us to mitigate disruption.”

FourKites and Cardinal Health are collaborating on supply chain solutions for the ‘last mile’ too. “One of the challenges we’re taking on is visibility into the final mile, the last stage of delivery from a transportation hub to the healthcare provider or at-home patient,” Halligan continued. “It’s traditionally the weakest link in the supply chain, and one of the most expensive. Providing final-mile visibility will mean our customers can see exactly where their delivery is and when it will arrive. Potentially, it will mean a pharmacist has more time to take care of more patients, instead of tracking down deliveries. It means that surgery centers waiting for a product will know exactly when to schedule a procedure.”

Improving the supply chain is a journey, not a destination, Dolan concluded. “The supply chain and technologies continue to evolve all the time, requiring us to continually innovate. With partners like FourKites, we’re helping to establish Cardinal Health as a strategic, tech-led company.”