How Cardinal Health is taking a comprehensive approach to advancing its medical products supply chain.
Cardinal Health’s Global Medical Products and Distribution business has been driving a multi-year transformation across its supply chain with resiliency at the forefront. Core to its plan to modernize are the company’s investments in new buildings and technology, collaboration with key industry associations and transparency with healthcare customers.
Pete Bennett, senior vice president of global supply chain for Cardinal Health’s Global Medical Products and Distribution organization, is one of the leaders responsible for driving the transformation. He oversees planning, distribution, global trade and logistics for the Dublin, Ohio-based medical products manufacturer and distributor.
A graduate of the United States Military Academy at West Point, Pete Bennett served in the U.S. Army and for more than ten years worked in logistics leadership roles domestically and internationally in Afghanistan and Iraq – with early experience focused on the supply management of petroleum-based products. Today, Pete draws on his military experience in transportation, warehousing, operations and more to lead the Global Medical Products and Distribution supply chain operations for Cardinal Health.
“The Army and the Department of Defense create very simplistic product flows and processes,” he said. “Once you create that simple foundation, you’re able to take that information and apply it to more complex situations like a supply chain that manages hundreds of thousands of different SKUs, product portfolios and locations.”
Bennett says that simple foundation has helped he and his team find success and continued supply chain evolution at Cardinal Health.
Multi-year warehousing and modernization plan
In the last few years, Cardinal Health’s Global Medical Products and Distribution business opened two new U.S. distribution centers with a third new location nearing completion.
“Growing our distribution footprint allows us to better serve healthcare customers and their patients,” Bennett said. “Expanding facilities and implementing new technology illustrates our company’s continued focus on infrastructure, operations and supply chain resiliency.”
Opened in 2023, the nearly 600,000-square-foot facility in Central Ohio offers operational efficiencies, advanced technology and a spacious innovation lab designed to test automation and other warehouse solutions.
In the fall of 2024, Cardinal Health opened a new, 317,000-square-foot distribution center in Boylston, Massachusetts, replacing its former Bedford location with double the warehouse space and triple the capacity for product storage locations. It features modernized operations and specialized handling capabilities, including refrigeration, proper storage for hazardous materials and industry expertise in product transportation regulations.
The third distribution center opening by this spring is located in Northeast Ohio and is 30% larger than the distribution facility it’s replacing. Next generation technology integrated into the building will improve workflows and help move medical products through the facility more efficiently, enhancing the order-to-delivery experience for customers. Automation will drive productivity and performance and reduce the risks of ergonomic injuries.
“Central Ohio remains imperative to our distribution and warehousing ecosystem due to its prominence as a transit hub,” Steve Mason, CEO of Cardinal Health’s Global Medical Products and Distribution business, said in a statement.
Supply chain risks
With new distribution centers coming online, Bennett is always concerned with global trade and logistics, ongoing supply disruptions and cybersecurity.
Those are the three key issues he keeps an eye on. From a global trade perspective, it’s assessing the macroeconomic and geopolitical landscape.
“Sometimes we have to pull forward inventory to mitigate risks, and other times we decide to reroute products if we anticipate a geopolitical issue or a port strike,” he said. “It’s a constant churning of scenario planning.”
With ongoing supply disruptions, Bennett says Cardinal Health must be two steps ahead at all times in order to be resilient in the face of uncertainty. Is a Tier Two supplier causing risks, for example? Is another supplier needed or are there more suppliers needed?
But the biggest issue to Bennett is cybersecurity because it’s one that could cripple the supply chain if a bad actor has access to different lanes of product.
“It’s always cybersecurity,” he said. “It has to be. It’s a very serious matter and it’s one that is impacting all of healthcare. It’s adding a lot of costs to the industry.”
Breaches could have a severe impact, not just on how Cardinal Health operates as a company, but also at large.
“We can do a lot of things manually and we’ve seen ways to mitigate breaches in other areas and continue our flow of product,” Bennett explained. “I’m not as concerned about that as I am about it impacting patient care.”
If a hospital has a cyber-attack, can it receive product? Can it order product? Is it too big to do it in an effective manner? Those are questions that concern Bennett.
“The stakes are high,” he said. “And that’s something we have to continually watch out for and not just in supply chain. Patient records should be of concern. Anywhere there’s potential for a real data breach could impact our overall network.”
Collaboration with SMI, HIRC and HIDA
To help guard against some of these risks, healthcare industry leaders have come together in recent years and to problem solve together. Cardinal Health works closely with organizations like the Strategic Marketplace Initiative (SMI), the Healthcare Industry Resource Collaborative (HIRC), the Healthcare Industry Distributors Association (HIDA) and others. These relationships connect the organization with providers and industry leaders to align on ways to drive meaningful, positive change across the healthcare supply chain.
Cardinal Health was an early member of HIRC, which began as a cross-industry collaboration in 2019. Cardinal Health is a co-founding member of the organization that has grown to over 90 health systems, suppliers and industry partners tied to creating a more resilient supply chain centered on partnership and transparency.
Bennett said, “It’s collaborative and it’s intended to open channels to share information between providers and manufacturers and come together during times of crisis or shortages.”
Cardinal Health has been honored by HIRC with the transparency badge, which signifies it shares with its customers and health systems where its product is manufactured, where it’s coming from and where raw materials are coming from.
Cardinal Health has also received a resiliency badge with diamond-level rating from HIRC which takes on many dimensions, according to Bennett, including demand planning, supply planning, business continuity planning, geopolitical information and the overall resiliency of a supply chain.
“The resiliency badge and highest level of recognition from HIRC demonstrates the strengths and differentiators across our supply chain, as well as our ability to respond quickly to disruption so our customers can focus on what matters most – delivering safe and quality patient care,” Bennett said in a statement.
Bennett is the co-chair for HIDA’s MedSupplyChain Conference each February.
“HIDA is a voice for the industry, advocating for a legislative environment that creates more resiliency across our supply chain,” Bennett added. “Our relationship with HIDA helps us collaborate with other manufacturers and distributors in the industry.”
HIDA advocated for Fast Pass legislation in the National Defense Authorization Act (NDAA) for Fiscal Year 2025 and it passed in December. The legislation directs the Secretary of Transportation to initiate a study examining the movements of PPE from 2020-2022 to strengthen future ability to ship critical healthcare products amid potential bottlenecks.
During the pandemic and the subsequent supply chain delays, healthcare distributors worked closely with ports and shippers to get critical medical products to patients and providers.
“When patients are at the end of the supply chain, it becomes absolutely crucial that these products are available for their healthcare providers,” Bennet said. “By constantly evaluating our processes, infrastructure and relationships, we ensure that we’re ready for the many challenges that arise in our industry. Our supply chain transformation journey is ongoing so we can continuously deliver excellence for our customers.”
Innovation Lab
Nearly 130 employees work in Cardinal Health’s Ohio Valley distribution center in Central Ohio and in a back corner sits a nearly 4,000-square-foot Innovation Lab. It tests new technologies designed to improve warehouse fulfillment procedures in real working environments.
The lab tries to answer two questions. One, how can technology improve Cardinal Health’s service to its customers, and two, how can it use technology to improve the day-to-day lives of its employees?
It opens onto the warehouse floor, so lab employees have the entire space to use and explore true potentials of innovation. It’s an end-to-end incubator testing new technologies that support greater resiliency and efficiency. Scanning tools, collaborative mobile robots, drones, next generation software updates and more are all evaluated in the Innovation Lab.
New products emerging in robotics and automation can be integrated to deliver flexible and scalable solutions to enhance operations across the company’s entire medical products distribution network. But some products are turned away after testing in the Innovation Lab. They might be identified as sluggish technology, have inefficiencies or functional flaws.
New solutions must have the capacity to help distribution centers meet tight delivery windows, advance product quality and improve the customer experience. Those working in the Innovation Lab play an important role in helping test the efficacy of new technologies because these solutions must be compatible with Cardinal Health’s workflows and existing technologies.
The lab allows Cardinal Health to test and validate solutions before they are deployed to its distribution network. It means shipments aren’t jeopardized and service remains dependable and consistent. That’s critical to Cardinal Health’s customers and their patients.