Client Description and context
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a global, integrated healthcare services and products company, providing customized solutions for hospitals, health systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices worldwide.
The company provides clinically-proven medical products and pharmaceuticals and cost-effective solutions that enhance supply chain efficiency from hospital to home. Cardinal Health connects patients, providers, payers, pharmacists and manufacturers for integrated care coordination and better patient management. Backed by nearly 100 years of experience, with approximately 50,000 employees in 46 countries, Cardinal Health ranks among the top 25 on the Fortune 500.
Recently, Cardinal Health acquired a business segment from another multinational company. The acquired business encompasses multiple product categories in numerous geographies across the globe. This acquisition necessitated the setting-up of a distribution and replenishment centre in Singapore for the APAC region. Nexdigm supported Cardinal Health in this endeavour by providing project management services.
Objective
The objective was to set-up a distribution and replenishment centre at Singapore (The Hub) to supply products directly to multiple countries in APAC. The success of the project was dependent on achieving the ability to:
- Sell finished goods as well as spare parts directly to distributors and Logistics Service Providers (LSPs) in multiple countries
- Handle Order to Cash (OTC) process
- Act as the Technical Service Centre of Excellence (TSE) for the APAC region
The Hub had to become fully operational by the expiry of Transitional Services & Support Agreement (TSA) period.
Guiding Principles
- No business disruption
- Replication of Cardinal Health's Global Replenishment Centre model with minimal customization were the guiding principles
Execution
Nexdigm involvement in the project began with providing a detailed financial analysis of project scenarios. This activity enabled the finalization of overall budget which in turn expedited the process of receiving the go-ahead from Cardinal Health's senior management team. Nexdigm also helped in articulating the charter for the Hub and finalizing the scope of its operations.
The project plan included a detailed work breakdown structure, budgets, timelines as well as contingencies in case of delays. Processes were grouped according to the functional streams such as Supply Chain, Commercial, Information Technology, Legal and Warehouse Operations. Nexdigm conducted country- wise workshops across APAC to gather inputs from various stakeholders. This also facilitated the process of getting their buy-in on the processes.
On the IT front, Nexdigm collaborated with teams working on developing the OTC capability and managing the integration of Cardinal Health's IT systems with those of the vendor.
The monitoring framework included a weekly cadence with various stakeholders for status updates and escalations, if any.
Nexdigm diligently monitored the progress against planned milestones and highlighted exceptional deviations. Nexdigm also provided advance notice of approaching milestones and helped in co-ordinating information flow between various functions and regions.
Challenges
Setting-up of a facility, with an OTC process, was being done for the first time in Cardinal Health. The following aspects made the project a unique challenge:
- Involvement of stakeholders from different time zones
- Product management across multiple countries
- Integration of Cardinal Health's IT systems with those of the vendor
- Multiple currency billing feature
Key Milestones
- Approval by senior management at the global level
- Selection of local execution partners Approval of execution and integration plans
- Go-live of IT systems
- Operational go-live of the Hub
Impact
The Hub became operational as per the schedule. The main objectives of being able to accept orders, ship orders and invoice customers were achieved within the budgeted cost and duration.
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