assigsupply

Supply Chain Identification & Discussion

Introduction to the Company:

Cardinal Health is a healthcare distribution company that was founded in 1971 by Robert D. Walter. The original, modest, distribution center debuted in Columbus, Ohio, and initially specialized as a food distributor until branching into pharmaceuticals in 1979. By 1983, Cardinal Health went public and quickly expanded its business model with numerous acquisitions of other pharmaceutical distribution companies. In 1987, Cardinal Health would sell its food distribution segment as its pharmaceutical distribution network had amassed to twice the size of the food distribution segment.

(CompaniesHistory.com, 2022)

Today, Cardinal Health is headquartered in Dublin, Ohio. The company reports itself to be a global distributor of medical and laboratory products as well as a provider of performance and data solutions for healthcare facilities. The company reports serving nearly 90% of U.S. hospitals, more than 60,000 U.S. pharmacies, and more than 10,000 specialty physician offices and clinics. The success of the company has resulted in Cardinal Health having served 3.4 million patients with more than 46,000 products, while its digital ecosystem supports more than 23 million patients currently. The company has approximately 44,000 employees and more than 50 years of experience.

(CardinalHealth.com, 2022)

Financially, Cardinal Health has a market cap of 15.02 billion dollars, a profit margin of 0.32%, an operating margin of 1.08%, and a trailing, twelve-month (ttm), gross profit of 6.97 billion dollars.

(Finance.yahoo.com, 2022)

Supply Chain Functions : (page 19, chapter 1)

Cardinal Health would be classified as both a distributor and a service provider. However, the company would primarily be classified as a distributor, with service being a minor and limited role listed on its website.

Per the text, the role of a distributor is that of the following:

“Distributors are companies that take inventory in bulk from producers and deliver a bundle of related product lines to customers […] They typically sell to other businesses, and they sell products in larger quantities than an individual consumer would usually buy. Distributors buffer the producers from fluctuations in product demand by stocking inventory and doing much of the sales work to find and service customers. For the customer, distributors fulfill the “Time and Place” function—they deliver products when and where the customer wants them. A distributor is typically an organization that takes ownership of significant inventories of products that they buy from producers and sell to consumers. In addition to product promotion and sales, other functions the distributor performs are inventory management, warehouse operations, and product transportation, as well as customer support and post sales service.” (Hugos, 2018)‐

Cardinal Health fits the role of a distributor as outlined in the text by taking pharmaceuticals and healthcare products in bulk and subsequently shipping them to various businesses[footnoteRef:1] - (Cardinal Health’s business clientele includes: hospitals, pharmacies, specialty offices, and other healthcare facilities (as described in the introduction section))[footnoteRef:2]. Cardinal Health fits the role of a distributor as outlined in the text by selling products in larger quantities than an individual customer would usually buy (choosing to operate and sell bulk inventory via numerous warehouse facilities with, again, clients being healthcare facilities). Cardinal Health fits the role of a distributor as outlined in the text by fulfilling the “Time and Place” function, as it delivers products when are where the customer wants them through its delivery service arm[footnoteRef:3]. Cardinal Health fits the role of a distributor as outlined in the text by taking ownership of significant inventories of products via its warehouses and subsequently fulfilling requests by its business clients. Lastly, Cardinal Health fits the role of a distributor as outlined in the text by performing inventory management[footnoteRef:4], warehouse operations[footnoteRef:5], product transportation[footnoteRef:6], as well as customer support, and postsales service[footnoteRef:7]. [1: (CardinalHealth.com), Healthcare 3PL Supply Chain Solutions - Cardinal Health, (2022)] [2: (CardinalHealth.com), About Us – Cardinal Health, (2022)] [3: (CardinalHealth.com), Healthcare 3PL Supply Chain Solutions - Cardinal Health, (2022)] [4: (CardinalHealth.com), Healthcare 3PL Supply Chain Solutions - Cardinal Health, (2022)] [5: (CardinalHealth.com), Healthcare 3PL Supply Chain Solutions - Cardinal Health, (2022)] [6: (CardinalHealth.com), Meet Our Warehouse and Manufacturing Operations Team, (2022)] [7: (CardinalHealth.com), Contact Us – Cardinal Health, (2022)]

Supply Chain Location : Cardinal Health, as a distributor of pharmaceutical goods, would be placed in between manufacturers of pharmaceuticals goods (listed as suppliers below) and end retailers of those goods (listed as customers below). In addition to manufacturers, Cardinal Health's supplier list also includes gas and oil companies as Cardinal Health distributes its pharmaceutical products from its warehouses to its customers.

· The company’s supplier list includes, but is not limited to, an assortment of pharmaceutical manufacturing, research, and input companies - with Stryker Corp, Gilead Sciences Inc, and Trinseo Plc being examples. The company’s supplier list also includes oil and gas companies for the distributor; for example, ExxonMobil Corp and Chevron Corp.

· (The aforementioned list is not an exhaustive list of Cardinal Health’s suppliers.)

· The company’s customer list includes, but is not limited to: various medical facilities, pharmacies, and broad healthcare companies. Examples include: Kroger Co (pharmacy), CVS Health Corp, Tenet Healthcare Corp, and Fresenius Medical Care Ag and Co Kygaa.

· (The aforementioned list is not an exhaustive list of Cardinal Health’s customers.)

Company Core Competencies :

Cardinal Health’s core competencies could be observed in the following areas:

> Expertise: Cardinal Health has been operating for 50 years. With the majority of Cardinal Health’s time having been spent as a distributor in health care products, Cardinal Health has a focused and knowledgeable understanding of its particular business area; it knows its market well.

> Logistics: Cardinal Health has been a (Gartner ranked and) “recognized […] healthcare leader in supply chain excellence.[footnoteRef:8]” Cardinal Health has end-to-end party logistics services along with a robust distribution network spanning across the entire United States.[footnoteRef:9] [8: (CardinalHealth.com), Healthcare 3PL Supply Chain Solutions - Cardinal Health, (2022)] [9: (CardinalHealth.com), Healthcare 3PL Supply Chain Solutions - Cardinal Health, (2022)]

> Relationships: Cardinal Health has a great relationship with its customers. Cardinal Health, as stated previously, reportedly serves nearly 90% of U.S. hospitals, more than 60,000 U.S. pharmacies, and more than 10,000 specialty physician offices and clinics.

> Market power benefits: As covered in the “Introduction to the Company” section, Cardinal Health made many acquisitions of related distributors during its 50-year operations. As a result, Cardinal Health has benefited from horizontal integration. Per module 1’s video titled What is Supply Chain Management? (Definition & Intro), Cardinal Health has made an investment in gaining improved economies of scale and scope, as well as gaining an expansive customer base.

Citations :

Cardinal Health. CompaniesHistory.com - The largest companies and brands in the world.

(2021, June 18). Retrieved March 21, 2022, from https://www.companieshistory.com/cardinal-health/

About Us - Cardinal Health. CardinalHealth.com. (n.d.). Retrieved March 22, 2022, from https://www.cardinalhealth.com/en/about-us.html

Yahoo! (2022, March 21). Cardinal Health, Inc. (CAH) valuation measures & financial statistics. Yahoo! Finance. Retrieved March 21, 2022, from https://finance.yahoo.com/quote/CAH/key-statistics

Hugos, M. (2018). Essentials of supply chain management. Wiley.

Healthcare 3PL Supply Chain Solutions - Cardinal Health. CardinalHealth.com. (n.d.). Retrieved March 22, 2022, from

https://www.cardinalhealth.com/en/services/manufacturer/medicalmanufacturer/healthcare-3pl-supply-chain-solutions.html

Meet Our Warehouse & Manufacturing Operations Team. CardinalHealth.com. (2022). Retrieved March 21, 2022, from https://jobs.cardinalhealth.com/creative/Warehouse

Contact Us - Cardinal Health. CardinalHealth.com. (2022). Retrieved March 22, 2022, from https://www.cardinalhealth.com/en/about-us/contact-us.html

Cardinal Health Inc's Supplier Performance. CSIMarket. (2021). Retrieved March 22, 2022, from https://csimarket.com/stocks/suppliers_glance.php?code=CAH

Cardinal Health Inc's Customer Performance. CSIMarket. (2021). Retrieved March 22, 2022, from https://csimarket.com/stocks/markets_glance.php?code=CAH

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This study source was downloaded by 100000756197021 from CourseHero.com on 10-10-2022 16:39:08 GMT -05:00

https://www.coursehero.com/file/164326049/SCIdentifcationdocx/