IU Health Distribution Center Already Paying Off

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(photo courtesy of Browning Investments, which developed the facility) (photo courtesy of Browning Investments, which developed the facility)

Indiana University Health says its new Integrated Service Center in Plainfield is a catalyst for change. The 300,000-square-foot facility allows the health system to provide critical medical supplies to all of its hospitals throughout the state at a discounted price. Dennis Mullins, senior vice president of supply chain operations for IU Health, says the ultimate goal of the facility is to produce savings for the organization by reducing the price for the products, as well as reducing the cost of transporting the goods to the hospitals.

In an interview with Inside INdiana Business Reporter Mary-Rachel Redman, Mullins said the facility has allowed IU Health to centralize its distribution and logistics functions.

"What I mean by "catalyst of change" is that we went first with just our med surge supplies, but what it does allow us to do is any other logistics operation in the organization that's moving any type of goods throughout our hospitals can integrate here," said Mullins. "Because we now have a fleet of vehicles that are moving supplies from this location to all of our hospitals. So all of those other logistics operations, like print shop, IT, home health, could essentially integrate and we could move with one vehicle and produce even more savings."

The center utilizes robotic technology that picks supplies from bulk inventory, which the health system says is one of the most sophisticated systems in any U.S. hospital. The facility began its first shipments in July 2018 and was able to supply all 16 IU Health hospitals by December.

Mullins says, as an essentially new distribution company, they continue to learn and grow as the operation moves forward. He says the health system had a cost savings goal of $4.2 million for 2018, which the health system surpassed. "It was confirmation to us that this is the right business model and we're on the right track."

The center currently just serves IU Health's acute care centers, but Mullins says plans are in place to gradually add other non-acute facilities, such as physicians offices and surgery centers, as time goes on. 

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