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Cardinal Health (CAH) to Build Distribution Center in Greenville
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Cardinal Health (CAH - Free Report) announced its plan to build a new distribution center in Greenville, SC. The facility will support CAH’s supply of healthcare medical supplies at home, especially to those with chronic and serious health conditions. It will be the 11th at-Home Solutions distribution center in the country and the largest of its kind.
The company plans to deploy automation, using robots and artificial intelligence, for picking up, rearranging and delivering storage bins directly from the grid to connected workstations. It also intends to use this technology for order picking and replenishment.
The Greenville-based distribution center is projected to stretch over approximately 350,000 square feet. It is expected to provide more than 290,000 cubic feet of storage through 13,000 SKUs, 76 robots, eight picking stations and three replenishment stations.
Cardinal Health plans to install two fully automated erected box systems that will deliver 600 ready-to-pack, right-sized erected boxes per hour.
Once it gets operational in the next 18-24 months, the distribution center will be able to ship approximately 8,000 packages per day directly to patient homes.
New Facility to Support Growth
CAH has grown its customer base from 1 million to more than 4 million (currently) in little more than a decade. The company needs space to support the growing nationwide demand for its at-home solutions.
The new facility will add significantly to the company’s shipment capacity. Cardinal Health currently ships approximately 55,000 packages per day from its existing facilities.
The automation at the new facility will help optimize inventory capacity and improve service levels, ensuring delivery of the right products to the right place at the right time. The warehouse management system will increase employee productivity and drive efficiencies within daily movement of products, accelerating order fulfillment.
Although the distribution center will be big enough to support supply to all 50 states, it will primarily serve customers in the Carolinas, Virginia, Georgia, Alabama, Tennessee, Missouri and Louisiana.
Per a report by Stratview Research, the global medication management market is projected to grow from $1.68 billion in 2020 to $5.41 billion by 2026, at a CAGR of approximately 21.5%. Factors like the increasing elderly population, increasing adoption of IT in healthcare, and a surge in the incidence of chronic and infectious diseases are expected to drive the market.
Given the growing market potential, the decision to build the new distribution center seems promising and well timed.
Notable Developments
Last month, Cardinal Health announced its collaboration with Signify Health to offer in-home clinical and medication management services via CAH’s Outcomes business. This will likely help address medication management challenges for health plan members.
In January, the company announced its entry into a strategic collaboration with Palantir Technologies Inc. The objective was to design a solution that will help health systems and hospitals with dynamic purchase decision insights to quickly improve their earnings.
Zacks Rank & Stocks to Consider
Cardinal Health currently carries a Zacks Rank #3 (Hold).
West Pharmaceutical Services has an estimated long-term growth rate of 6.3%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 13.61%.
WST’s shares have risen 27.2% in the past year compared with the industry’s 19.6% growth.
Merit Medical Systems has an estimated long-term growth rate of 11%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 20.22%.
The company’s shares have risen 58.2% in the past year compared with the industry’s 19.6% growth.
Dentsply Sirona has an estimated long-term growth rate of 9.1%. XRAY delivered a trailing four-quarter average earnings surprise of 10.47%.
The company’s shares have risen 8.6% in the past year compared with the industry’s 19.6% growth.
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Cardinal Health (CAH) to Build Distribution Center in Greenville
Cardinal Health (CAH - Free Report) announced its plan to build a new distribution center in Greenville, SC. The facility will support CAH’s supply of healthcare medical supplies at home, especially to those with chronic and serious health conditions. It will be the 11th at-Home Solutions distribution center in the country and the largest of its kind.
The company plans to deploy automation, using robots and artificial intelligence, for picking up, rearranging and delivering storage bins directly from the grid to connected workstations. It also intends to use this technology for order picking and replenishment.
The Greenville-based distribution center is projected to stretch over approximately 350,000 square feet. It is expected to provide more than 290,000 cubic feet of storage through 13,000 SKUs, 76 robots, eight picking stations and three replenishment stations.
Cardinal Health plans to install two fully automated erected box systems that will deliver 600 ready-to-pack, right-sized erected boxes per hour.
Once it gets operational in the next 18-24 months, the distribution center will be able to ship approximately 8,000 packages per day directly to patient homes.
New Facility to Support Growth
CAH has grown its customer base from 1 million to more than 4 million (currently) in little more than a decade. The company needs space to support the growing nationwide demand for its at-home solutions.
The new facility will add significantly to the company’s shipment capacity. Cardinal Health currently ships approximately 55,000 packages per day from its existing facilities.
The automation at the new facility will help optimize inventory capacity and improve service levels, ensuring delivery of the right products to the right place at the right time. The warehouse management system will increase employee productivity and drive efficiencies within daily movement of products, accelerating order fulfillment.
Although the distribution center will be big enough to support supply to all 50 states, it will primarily serve customers in the Carolinas, Virginia, Georgia, Alabama, Tennessee, Missouri and Louisiana.
Cardinal Health, Inc. Price
Cardinal Health, Inc. price | Cardinal Health, Inc. Quote
Industry Prospects
Per a report by Stratview Research, the global medication management market is projected to grow from $1.68 billion in 2020 to $5.41 billion by 2026, at a CAGR of approximately 21.5%. Factors like the increasing elderly population, increasing adoption of IT in healthcare, and a surge in the incidence of chronic and infectious diseases are expected to drive the market.
Given the growing market potential, the decision to build the new distribution center seems promising and well timed.
Notable Developments
Last month, Cardinal Health announced its collaboration with Signify Health to offer in-home clinical and medication management services via CAH’s Outcomes business. This will likely help address medication management challenges for health plan members.
In January, the company announced its entry into a strategic collaboration with Palantir Technologies Inc. The objective was to design a solution that will help health systems and hospitals with dynamic purchase decision insights to quickly improve their earnings.
Zacks Rank & Stocks to Consider
Cardinal Health currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services (WST - Free Report) , Merit Medical Systems (MMSI - Free Report) and Dentsply Sirona (XRAY - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical Services has an estimated long-term growth rate of 6.3%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 13.61%.
WST’s shares have risen 27.2% in the past year compared with the industry’s 19.6% growth.
Merit Medical Systems has an estimated long-term growth rate of 11%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 20.22%.
The company’s shares have risen 58.2% in the past year compared with the industry’s 19.6% growth.
Dentsply Sirona has an estimated long-term growth rate of 9.1%. XRAY delivered a trailing four-quarter average earnings surprise of 10.47%.
The company’s shares have risen 8.6% in the past year compared with the industry’s 19.6% growth.