Cardinal Health Inventory Program Helps Reduce Delays and Shortages Ahead of Respiratory Season

Rhea-AI Summary

Cardinal Health (NYSE: CAH) launched an innovative Reserved Inventory Program aimed at improving inventory management for respiratory diagnostics in anticipation of the upcoming flu, strep, and RSV seasons. This program, tailored to individual labs and health systems, utilizes historical data to predict inventory needs, thereby alleviating supply challenges faced during previous respiratory seasons. Feedback from pilot participants indicates a significant reduction in inventory constraints and a high satisfaction rate. The program promises to deliver consistent supply and reduce delays in respiratory testing products.

Positive

• Launch of Reserved Inventory Program to improve inventory management for respiratory diagnostics.
• Customized to individual labs and health systems, enhancing supply chain efficiency.
• Successful pilot program led to high satisfaction among participants, reducing inventory constraints.

Negative

• None.

DUBLIN, Ohio, June 29, 2022 /PRNewswire/ -- Cardinal Health (NYSE: CAH) today announced the launch of an inventory reserve program that helps labs and health systems more accurately pre-order respiratory diagnostics before the onset of seasonal flu, strep and RSV. This new program provides clearer demand signals to the supply chain ahead of the season, which helps reduce the friction felt across the healthcare landscape as the season ramps.

The Cardinal Health Laboratory Products Reserved Inventory Program is available for labs and facilities nationwide. Individually tailored to participants, the program leverages data, such as historical utilization, to more accurately predict inventory needs. This approach offers supply assurance for an often-unpredictable respiratory season further complicated by virus co-circulation and COVID-19 surges and potential new variants.

"The Reserved Inventory Program is designed to address the variability and erratic nature of the respiratory season for labs and health systems; it's a mechanism for a more consistent supply of respiratory testing products amid ongoing supply challenges," said Emily Berlin, vice president of Product Marketing and Management for Cardinal Health Laboratory Products. "Most importantly, it puts the focus back to where it matters most for labs: the diagnosis and treatment of respiratory illnesses."

The Reserved Inventory Program launches on the heels of a successful pilot program, which took place in the 2021-2022 respiratory season – a time when a KaufmanHall survey¹ said 99% of U.S. hospitals and health systems experienced challenges in supply procurement. In a 2022 Cardinal Health survey² of pilot participants, most reported fewer inventory constraints after participating in the Reserved Inventory Program and reported being very satisfied and likely to recommend the program to a peer.

"There is no way of knowing with certainty when or if particular viral illnesses will spike, but laboratories must be prepared regardless," said Tekita Mckinney, MT (ASCP) M.Ed., infectious disease and PCR laboratory manager at LeBonheur Children's Hospital in Memphis, Tennessee, who participated in the pilot program last year. "The multi-year analytical insights we gain through the Reserved Inventory Program save my lab time and help increase our accuracy as we seek to predict future usage before respiratory season begins. It has given us more certainty and helped us avoid backorders and delays."

How it works
"The Reserved Inventory Program is unlike other traditional inventory management programs in the market," Berlin said. First, Cardinal Health provides a customized utilization report that details a customer's historic utilization, enabling them to make informed decisions on how much inventory to reserve. Cardinal Health then works with suppliers to procure a specified quantity for each individual customer, based on the customer's identified volume for the upcoming season. Identifying customer anticipated testing needs provides select manufacturers demand signals in advance of the traditional respiratory season.

Products that are ordered through the program are held by Cardinal Health in reserve until the lab or facility requests them – and customers are guaranteed the quantity reserved. Additional levels of inventory management options are available, including stock rotation and inventory commitment release, which provide flexible options upon program enrollment.

For more details on the program or to reserve products now for the 2022-2023 respiratory season, visit the Reserved Inventory Program website or reach out to a Cardinal Health Laboratory Products customer service at 800.964.5227.

About Cardinal Health  
Cardinal Health is a distributor of pharmaceuticals, a global manufacturer and distributor of medical and laboratory products, and a provider of performance and data solutions for health care facilities. With 50 years in business, operations in more than 30 countries and approximately 44,000 employees globally, Cardinal Health is essential to care. Information about Cardinal Health is available at cardinalhealth.com.

Contacts 
Media: Cari Wildasinn, cari.wildasinn@cardinalhealth.com and (614) 757-8287 

1 October 2021. KaufmanHall. 2021 State of Healthcare Performance Improvement: COVID Creates a Challenging Environment.

2 2022 Cardinal Health data on file.

 

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SOURCE Cardinal Health

FAQ

What is Cardinal Health's new inventory program about?

Cardinal Health launched a Reserved Inventory Program to help labs and health systems more accurately pre-order respiratory diagnostics, reducing supply chain challenges.

When was the Reserved Inventory Program launched?

The Reserved Inventory Program was announced on June 29, 2022.

What benefits does the Reserved Inventory Program offer?

The program provides clearer demand signals, reduces inventory constraints, and increases satisfaction for participating labs.

How does the Reserved Inventory Program work?

The program leverages historical utilization data to tailor inventory needs and procure specified quantities of products for each customer.

What was the outcome of the program's pilot?

Most pilot participants reported fewer inventory constraints and high satisfaction, indicating the program's effectiveness.