In an industry as vast and complex as healthcare, Cardinal Health is healthcare’s crucial link. From manufacturers and innovators to pharmacists and patients, we connect the operational and the clinical, to deliver the products and solutions that help improve the lives of people every day.
As the industry and customer needs evolve, we’re investing in the modernization and expansion of our distribution network to enhance customer service and improve employee safety.
These investments are transformational facilities like our Consumer Health Logistics Center (CHLC) in Groveport, Ohio, and the newly announced flagship pharmaceutical distribution center in Indianapolis. These facilities are changing how pharmaceuticals and wellness products move through the supply chain with greater precision and efficiency.
The Consumer Health Logistic Center: a first-of-its-kind hub for consumer health products
One of the shifts we are seeing is the growing demand for over-the-counter (OTC) treatments and diagnostic solutions. Nearly 60% of Americans now rely on their local pharmacy for nonprescription products, according to a 2023 Wolters Kluwer Health survey. With the OTC market projected to exceed $300 billion by 2034, according to Global Market Insights, pharmacies are expanding their role in healthcare, and the CHLC is supporting them.
“The CHLC expands our ability to deliver private-label and wellness solutions that help pharmacies diversify their front-end and grow revenue while also giving us the flexibility to offer more products and respond faster to changes in customer demand,” said Brad Cochran, EVP, Pharmaceutical and Specialty Distribution at Cardinal Health. “Through the CHLC, we are delivering one of the broadest selections of consumer health items in the industry, with more than 12,000 different products.”
The CHLC uses a hub-and-spoke model, to centralize inventory and streamline distribution. Suppliers ship directly to the CHLC, where products are picked, packed and distributed to our network of more than 20 forward distribution centers serving customers nationwide.
"This facility also strengthens our supplier partnerships by creating a more agile, transparent and responsive supply chain,” said Marc DeLorenzo, SVP, Strategic Sourcing. "By consolidating inbound product flow into a single, high-performing facility, we’ve simplified logistics, enabling faster decision-making and improving our inventory accuracy, while helping our customers get the products they need, when they need them.”
Real-time insights from the CHLC enable smarter inventory management, allowing for more frequent and predictable replenishment, improving product availability and helping customers stay stocked and responsive.
Jamie Barker, SVP, Pharmaceutical and Specialty Supply Chain, added, “Rebalancing inventory between the CHLC and regional distribution centers has increased available capacity by about 20% at each forward distribution center, optimizing space, minimizing waste and enhancing cost-efficiency.”.
The CHLC is LEED v4 Silver-certified, equipped with energy-saving and sustainable features such as insulated tilt-up concrete walls that provide better thermal performance and energy efficiency, roof insulation and solar-ready roofing, LED lighting with motion controls, and motion-activated faucets and toilet accessories.
Smart technology is driving efficiency and safety, too. An automated conveyance system moves products from racking to outbound docks, reducing the need for forklifts on the floor. This system minimizes congestion in high-density zones and eliminates thousands of miles of forklift travel each month. Complementing this system are underground wire-guided forklifts that automatically follow a wire beneath the warehouse floor, keeping them on track in aisles and reducing the chance of safety incidents. In addition, innovations including robotics and automated labeling are helping to reduce physical demands on employees, improve pick-and-pack accuracy and streamline operations.
“Technology is evolving quickly, and we’re committed to staying ahead of it,” Barker said. “By investing in technology that makes our work safer and more efficient, we’re supporting our teams and strengthening our supply chain. Whether it’s using automation or artificial intelligence for demand forecasting, our focus remains clear, building a smarter network that delivers the right product at the right time in the right place.”
Indianapolis Distribution Center: an industry benchmark for U.S. pharmaceutical distribution
Our recently announced flagship forward distribution center is expected to be fully operational by fall 2027. This 230,000-square-foot facility will feature an industry-first robotic storage and retrieval system and advanced automation technology that will provide real-time inventory visibility, intelligent order fulfillment, and coordinated management of material flow. From receiving to shipping, the use of state-of-the-art robotics, conveyance, and sorting systems will enhance safety for our employees, making jobs safer, more efficient, and less physically demanding. For example, employees will no longer need to enter refrigerated zones to pick cold items as the automated system will bring products directly to employees working outside the refrigerated zone. In addition to robotics capabilities, technologies like automated labeling and high-speed conveyors will further reduce physical strain and help create a more ergonomic and productive work environment.
Positioning for the future: scaling innovation to meet evolving healthcare demands
As demand and expectations continue to evolve, ongoing investments in our pharmaceutical supply chain are creating a stronger, more adaptable network that keeps pace with the needs of customers and patients.
“Looking ahead, we will continue to modernize and expand our distribution network, including retrofitting our existing distribution centers to increase available capacity and drive service levels,” Barker said. “It’s all part of our commitment to build a more agile, resilient supply chain for our customers and the patients they serve.”