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Cardinal Health headquarters.

Cardinal Health’s Innovation Lab tests latest warehouse technology solutions

The Innovation Lab is a venue for testing new technologies designed to improve warehouse fulfillment procedures in real working environments.

In a back corner of Cardinal Health’s Ohio Valley Distribution Center, which supports its U.S. Medical Products and Distribution business, sits a 4,000 sq.-f.t Innovation Lab, a venue for testing new technologies designed to improve warehouse fulfillment procedures in real working environments. 

“In the lab, we try to answer two questions: How can technology improve our service to our customers, and, at the same time, how can we use technology to improve the day-to-day lives of our employees?” said Derek Naylor, director of supply chain optimization and technology. “The lab opens onto the warehouse floor, so we have the entire space as our playground, and that lets us explore the true potential of innovations to answer both questions.”

Nearly 130 employees work in this Ohio Valley DCone of 40 warehouses in Cardinal Health’s U.S. medical products distribution and replenishment network. Team members receive training to properly pick, pack and ship productssuch as surgical kits, tubing for enteral feeding and anesthesia kitsthat move in and out of the facility. They deftly navigate long aisles and are periodically supported by autonomous mobile robots rolled out in 2022 for enhanced productivity in the pick and pack process. Those who work in the Innovation Lab play an important role in helping test the efficacy of new technologies, the company noted.

[Read more: Cardinal Health to acquire Specialty Networks and its PPS Analytics platform]

Scott Cummins, director of application development and maintenance on the medical products IT team, said, “The Innovation Lab serves as an end-to-end incubator, giving us the opportunity to test new technologies that may support our goal of building greater resiliency and efficiency.” New scanning tools, collaborative mobile robots, drones, next generation software updates and more are evaluated here, often with employees on the warehouse floor. We learn how innovations can work within our processes and products. 

"We test to make sure they’re compatible with our workflows and with existing technologies, and we work out any bugs prior to broad-scale deployment,” Cummins said.

Though there are countless new products emerging in the robotics and automation industries, the Innovation Lab team focuses their testing on those that most directly support efficiency in operations, as part of the company’s warehouse modernization strategy. The strategy aims to integrate new technologies that will deliver flexible, scalable solutions that enhance operations across the company’s entire medical products distribution network. New solutions must have the capacity to help the DCs meet tight delivery windows, advance product quality, and most importantly, improve the customer experience, Naylor explained.

Cummins added, “We are building increased resiliency into our operations through this lab, and that makes us a better partner to our healthcare customers.”

He explained that numerous technology solutions sometimes do not move forward from the lab into full deployment. Some automated pallet trucks, security robots, floor scrubbers and other solutions have been turned away after lab testing identified sluggish technology, inefficiencies, or functional flaws. A robot designed to take over the task of moving large carts of cardboard to a compacter was one such example. “We tested several of these robots over a few months, and found they performed inconsistently, and they were awkward to maneuver through the warehouse aisles. We ultimately decided that they were more of a hazard than a help.”

An important element in the overall warehouse modernization strategy is ensuring that the current warehouse management system is future-ready by integrating with a Multi-Agent Orchestration platform, Naylor explained. The MAO is a software that orchestrates all day-to-day operations involved with products in the DC, from the time those products arrive to when they leave, headed for customers.

“We’re working to develop and deliver a solution that is flexible and scalable, with tremendous capacity and accuracy to manage the thousands of different Cardinal Health products in our portfolio,” Naylor explained. “Ultimately, it must improve the customers’ experience. For example, we often have just a few hours to get products to a customer. An MAO must ensure that we are picking the right product in the right quantity and unit of measure, making sure it gets in the right order tote or box. We are acutely focused on removing the potential for error all along the system.”

The team also is modernizing WMS data storage to mitigate vulnerabilities related to data storage limits, loss, damage and time-consumer maintenance. “We’re shifting to cloud-based servers, which provides us with two benefits: It enhances our resiliency and scalability and reduces operational and maintenance costs.”

[Read more: Cardinal Health posts revenue growth in Q1]

In addition, the Innovation Lab team has tested new, intuitive and user-friendly tablets and handheld devices used in picking and scanning. These provide a streamlined user experience with a graphical user interface on the screens – meaning that employees can interact with them via icons, rather than text alone. USMPD has rolled out dozens of these new smart devices, with improved user experience for our team.

As part of USMPD’s ongoing strategy to modernize operations, the lab team explores automation technologies that increase efficiencies in the DC operations, and, at the same time, reduce employees’ risks of ergonomics injuries.

For example, with previous testing and support from the Innovation Lab, the Ohio Valley DC and other USMPD facilities integrated AMRs into their workflows. Through the warehouse management system, the robots are loaded with picking instructions and totes and travel efficiently through the DCs, meeting employees at various picking stations. Employees still walk their specific picking zones in response to the AMRs’ instructions, but they don’t have to walk an entire warehouse floor.

Additionally, the team is in the early stages of testing wholistic solutions offering enhanced software capabilities and a single workflow for picking and product movement that can be supported by goods-to-person robotics – creating a more dynamic, resilient and responsive operation. Goods-to-person technology, which combines automated storage and retrieval of products, does exactly what it sounds like: brings products directly to employees to pick and pack.

Naylor said the team is currently testing a hybrid goods-to-person robotics solution, in which the product is delivered to a dynamic pick wall in preparation for the associate needing to complete the pick. In this hybrid solution, he notes, the associate still has to walk, but the time spent walking past un-needed products is reduced significantly.

“Soon we’re piloting this solution in a variety of test locations to further drive our optimization efforts. We’ve got an ambitious roadmap ahead of us and are excited to share more about this technology as we test, analyze and ensure a repeatable process for the entire network.”

As the lab continues to test physical products and hardware, Naylor shared his excitement about also testing software that can support more streamlined, customizable and agile operations. “Every healthcare customer operates a bit differently, so the ways in which we service our customers is highly customized,” he said. “The lab allows us to test and validate solutions and get them right for our customers before we deploy them to our distribution network. That means we won’t jeopardize a shipment or delivery. Such reliable and consistent service is critical to our healthcare customers and their patients.

[Read more: Cardinal Health posts revenue growth in Q1]

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