Company Profiles – Cardinal Health

Cardinal Health is now an “$87 billion” global healthcare products and services company dedicated to making healthcare “safer and more productive.”

But it all started in 1971 – with Cardinal Foods — when founder Robert Walter opened a small distribution center in Ohio. Eight years later the distribution branched into pharmaceuticals when the company purchased a drug distributor and became known as Cardinal Distribution (2).

This first acquisition soon became a pattern; the growth of this company is practically achieved by over more than 50 acquisitions over the last decades. Their business is now divided into four main areas:

1. Clinical technologies and services ($2.7 billion revenue / 7,200 employees) that help hospitals prevent medication errors, reduce hospital-acquired infections and manage medications and supplies more efficiently. This is done by automating the management of medications and pharmacy supplies to the nursing unit. By using infusion technologies, positive patient identification applications and business intelligence and data-mining services to analyze patient data to develop new processes.

2. Medical products and technologies ($1.8 billion revenue / 14,200 employees) offer medical and surgical products like surgical gloves, masks and drapes and gowns; respiratory care products – ventilators, pulmonary diagnostic systems; and medical specialties (enteral feeding devices; interventional radiology products; and clinical laboratory products).

3. Healthcare Supply chain services – pharmaceutical ($76.6 billion revenue / 10,100 employees) serves retail, hospital and mail-order pharmacies with a logistics network for the distribution of pharmaceuticals and related healthcare products to more than 33,000 pharmacies and provide comprehensive financial, inventory, contract management and marketing services. It is also the largest provider of specialized nuclear pharmaceuticals (12 million doses each year to hospitals and outpatient care centers).

4. Healthcare Supply chain services – medical ($7.5 billion revenue / 9,800 employees)
Distributes products from more than 2,000 manufacturers to hospitals, surgery centers, laboratories and physician offices. Supply chain management solutions that provide access to the right products for the right procedure at exactly the right time.

The last two unit make up 1.4 billion dollar of the overall profits. The first two (clinical and medical products) attribute 735 million dollars to the profits (1).

There is an execute leadership team (of 16 leaders) that gives some information about the organization: roles include those responsible for the various business units (CEO medical, CEO pharma, etc) and more general roles like the CFO, Chief HRO, Chief Compliance Officer, Global Shared Services, integrated provider solutions, global communications, chief legal officer… In fact a very centrally managed organization.

Currently the focus of the company is centered around a so-called “Chasing Zero” program in which they can offer added value to the health chain, for which four areas are determined:

1. lost revenue (inventory, regulatory, staff, reimbursements, lost customers and sales)
2. supply gaps (excess inventory, stock-outs, waste, dispensing errors, rising supply cost)
3. lost productivity (staff, unsatisfied nurses and pharmacist, work-flow, manual processes, hospital re-admissions)
4. preventable errors (medication, infections, sterilization, infusion errors)