The Challenge/Opportunity
In the complex and high-stakes world of healthcare distribution, the challenges are multifaceted. Owens & Minor faced a critical dilemma. The healthcare industry demands precision, speed and accuracy, but Owens & Minor was grappling with a significant deficit in in-house logistics expertise and personnel. Time was of the essence, and the constant race against the clock left the company struggling to meet critical business objectives. It was clear that a strategic solution was essential to taking their business to the next level.
The Scott Sheldon team’s objective extended beyond mere problem-solving; it was about setting a new standard, serving as a proof of concept for the entire healthcare distribution sector. The challenge at hand was two-fold. First, the Midwest is a pivotal market for Owens & Minor, so improving the company’s network strategy in the region was a priority. Second, this optimization had to be scalable to meet the nationwide demand.
“One of the biggest challenges Owens & Minor faced was a shortage of internal staff with the knowledge of logistics or the time needed to meet the goals of the business. They asked a team from Scott Sheldon to conduct a pilot program in the Midwest that could serve as a proof of concept”
The Solution
The project started with a rigorous and comprehensive evaluation. Scott Sheldon’s team embarked on an in-depth analysis of the healthcare distribution network’s intricacies. The primary goal was to identify a two-tier distribution and delivery strategy that would significantly reduce the required distribution centers, effectively halving them, but the scope of the solution went beyond this.
The meticulous analysis spanned every aspect of the operational landscape, which included an assessment of inventory management to ensure efficient stock levels, optimizing occupancy within distribution centers and streamlining transportation costs. Furthermore, the solution was designed to forecast and manage capital and realignment expenses, ensuring a seamless transition.
“We recommended a two-tier distribution and delivery strategy that reduced the number of distribution centers required to support the regional customer base by half.”
The Results
The results of this strategic transformation were indeed revolutionary. Owens & Minor achieved a remarkable reduction in distribution costs, which alone was a significant achievement in the world of healthcare distribution, but the impact extended further. Recurring savings from their total operating expenses were realized, meaning more resources for critical healthcare needs and investments in quality.
Moreover, customer satisfaction levels soared. In healthcare distribution, a positive response from end customers is not just a metric but a reflection of how well an organization can meet critical healthcare needs.
