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Cardinal Health (NYSE: CAH) was awarded a $57.8 million contract, including options that if exercised by the U.S. Department of Health and Human Services (HHS) could reach $91.6 million, for the...


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Investing in Medical Inventory Solutions
Our replenishment center in Channahon, Ill., which stores customer-owned inventory.

As a distributor of pharmaceutical products and global manufacturer and distributor of medical products and supplies, we are laser focused on our mission of getting critical medicines and supplies into the hands of our healthcare customers, so they can effectively care for their patients. 

That’s why we’re investing $50 million in medical inventory management throughout the United States. This investment will add nearly 1.5 million square feet to our regional replenishment centers, which store products that our nearby distribution centers can access quickly to restock their own inventory, then ship to our customers. 

“Our investment in expanding our replenishment centers means that our customers can more readily get the critical medical products they need,” explained Mike Zatlukal, Vice President of Replenishment Center Operations at Cardinal Health. “It strengthens our on-hand inventory and our ability to rapidly restock our distribution centers. At the same time, the expansion allows us to acquire and store more Cardinal Health Brand inventory to further improve our customer service levels.”  

The expansion began in May 2020 when we opened a one million-square-foot facility in Riverside, Calif., which stores inventory for all of our western U.S. distribution centers and our large high-volume customers. This facility also provides a unique cross-dock capability, meaning that when Cardinal Health™ brand products and materials sourced from our Latin America and Asia-Pacific operations arrive, they can be shipped directly to other replenishment centers without handling, stocking or picking the product. This represents a significant reduction in both lead time and cost. 

Over the next year, our expansion investment will continue, including: 

  • An additional one million-square-foot facility in Channahon, Ill. for customer-owned inventory, allowing customers to store their own products and access them quickly for their health systems.
  • The construction of a new replenishment center connected to our existing distribution center in Montgomery, N.Y., adding 310,000 square feet of storage space.
  • The expansion of our Elwood, Ill. facility, adding 90,000 square feet of inventory space. 

“We’re continually evaluating and advancing every aspect of our supply chain to ensure that product moves as quickly and reliably as possible, so that our healthcare customers can care for their patients,” said Zatlukal. “Investing in inventory expansion opportunities is just one of the ways we focus on our mission of delivering the products and solutions that improve the lives of people every day.”

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