Trinity Health to create system's own supply distribution centers; partners with XPO Logistics
System hopes the new centers will streamline supply logistics and transform its operation, lowering costs for the community.
Screenshot via YouTube.
Trinity Health and XPO Logistics have announced plans to build the first of four supply distribution centers in Fort Wayne, Indiana. Expected to create 75 new jobs in the state, the 21-state hospital system hopes the new centers will transform its operation and lowering costs for the community.
The new model gives Trinity Health more direct control over the part of the supply chain that is typically managed by an intermediary. The shift to managing its entire supply chain is part of a move to streamline its logistics processes to deliver more cost-effective care.
Lou Fierens, senior vice president of supply chain and fixed asset management for Trinity, said in a statement that the initiative "represents an enormous change in the way we stage and move supplies to our hospitals. … It also allows us to collaborate with our suppliers in a much deeper and more productive way by eliminating non-value-added work for all the participants in the supply chain, including our caregivers."
[Also: Trinity Health partners with Heritage Providers Network, creates risk-based network]
XPO Logistics will manage and operate the new $26 million facility as Trinity's contract logistics manager. As the first of the four supply distribution centers, the Fort Wayne hub will represent the single entry point for all manufacturers and suppliers serving Trinity. As additional satellite warehouses are brought online over the next five years, Fort Wayne will serve as the central restock and inventory site for those locations.
The change is three years in the making. Trinity first standardized the products it supplies to its hospitals and helped to streamline any related clinical procedures; it then implemented new inventory management systems. XPO and Trinity are now collaborating on the design of Trinity's future network structure and supply chain flow, looking for ways to cut costs, eliminate waste and improve the quality and speed of orders.
[Also: Trinity Health acquires Hartford's Saint Francis, will create nonprofit health system]
Ashfaque Chowdhury, president of supply chain for the Americas and Asia-Pacific for XPO Logistics, said in a statement he expects the new facility will boost the local economy, as well as help products reach their destinations more efficiently.
Conlan Construction will serve as the general contractor. Construction of the new site is expected to take about a year.
Trinity Health is one of the nation's largest Catholic nonprofit health systems, with 90 hospitals and 124 continuing care locations providing about 2.5 million visits annually.
