Commercial and Operational Evaluation of 4PL Arrangement

Client : Cardinal Health

Service Offered : Supply Chain

Sector / Industry : Healthcare

Client
Context

Cardinal Health, Inc. 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.

Cardinal Health Australia 401 Pty Ltd (CHA) is Cardinal Health's Australian subsidiary. CHA services cover its customers across the continent through an elaborate omnichannel distribution network comprising of hospitals, health systems, pharmacies, laboratories, and physicians’ offices.

CHA has engaged a leading logistics service provider (LSP) to handle all supply chain operations from port to customer (receiving, stocking, transportation, returns, local compliances, order to cash, etc.).

Client
Objective

Cardinal Health Australia (CHA) is a subsidiary of Cardinal Health. CHA engaged a leading Logistics Service Provider (LSP) to handle all supply chain operations. The costs charged by the LSP to CHA exceeded the original estimates and were significantly higher than comparable markets. Cardinal wanted to review its logistics operations and costs for its Australian operations to help identify savings/optimization/efficiency opportunities.

solution
Impact

After reviewing the operations and costs, Nexdigm identified opportunities for cost savings of over AUD 0.8 million in annual costs. We evaluated opportunities to reduce order receiving costs by 89%. We also created smarter palletization models coupled with inventory pruning of low-value slow movers to drive potential cost-savings of up to 60%.

Overall, Nexdigm managed to achieve 33% annual cost savings in regard to the LSP.

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