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04/13/2021

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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Supply Chain Disruption. Let’s Act.
11/08/2021

By Mike Kaufmann, Cardinal Health CEO

Supply chain disruption. It’s everywhere and it’s impacting all of us. Every corner of the supply chain is experiencing unprecedented challenges – from sourcing and capacity constraints at places of origin, to bottlenecks at destination ports, congestion on the rails and the roads – all of which are causing significant delays in critical goods.

We’re focused on what we can do to mitigate supply chain disruption. These challenges are not going to dissipate overnight, and they’re exacerbating the healthcare crisis the industry has been fighting for almost two years now. Our Medical segment customers – hospitals and healthcare providers -- need critical medical supplies to take care of their patients. Globally, collectively, we’re still navigating our way through the pandemic, and we need to support the frontline workers fighting the virus day in and day out. Doctors and nurses need our help.

There’s no quick fix, no easy answer. But there are steps we can take to lessen the pressure and move the needle together.

Fast-track medical supplies. Every industry is facing shipment delays, but we must prioritize releasing backlogged containers with critical medical supplies to ensure our nation’s health and safety. One of our trade associations, HIDA, has been vocal on this point. We need to develop a “fast pass” system that expedites the release of containers carrying medical supplies to port truckers so these products can be picked up first.

Change operations. At our company, we are redesigning our processes to meet the moment, but changes to industry processes will have a greater, more immediate impact. We could greatly reduce bottlenecks at some ports by changing the rules on how to return empty containers. These restrictions significantly constrain the efficient use of trucking power and chassis and are a major contributor to both gridlock and reduced trucker capacity.  We are working with other industry leaders to create a process that better aligns the operations of ports, rail, trucking and distribution centers.

Partner. In the face of unprecedented demand, we can’t just wait to build something new. We also need to create partnerships that combine capabilities to solve complicated problems.

Visibility. Real-time visibility is key to responding with agility at every point in the supply chain where challenges can occur. We need to leverage technology to create end-to-end visibility solutions across all foreign and domestic transport modes, including trucking and air transportation, so we know where critical medical supplies are at any point in the supply chain. At our company, we’re piloting visibility solutions across our broad network so we can adapt to meet customer need.

Advocate. The private sector must work hand-in-hand with the government on solutions. We are encouraging Congress and the Administration to bring meaningful relief to healthcare providers including releasing additional Provider Relief Funds and supporting efforts to overcome staffing shortages. We’re using our voice to advocate for healthcare providers; without critical medical supplies, the pressures on our healthcare system – which have already been immense as the pandemic stretches into its second year – will continue to build for the foreseeable future.

We are healthcare’s partner, and our healthcare system needs help. We’re doing everything we can to meet our customers’ needs. This crisis will require collective, comprehensive, and sustained action. We must all do our part.

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