This facility has been in operation for only a few weeks and is highly automated. It cost $40 million to build and IHC expects the building to pay itself back within three and a half years.
On Friday, November 2012, a bunch of us Supply Chain people had the opportunity to visit the brand new supply chain facility for Intermountain Healthcare (IHC) up in Midvale. Despite the weather, we had eight people from BYU (nine with Eric Doman) and one from the U. Brent Johnson, our tour guide and VP of Supply Chain Organization at IHC, gave a thirty minute presentation on the healthcare industry and how Supply Chain can lower the cost of healthcare nationwide. He mentioned that the total projected cost of future medicare expenses will cost the United States nearly $40 trillion dollars – that’s almost two and a half times the current national debt! IHC estimates that utilizing supply chain in healthcare can lower the cost of healthcare by up to 40%! Supply chain is becoming increasingly important in healthcare.
After the presentation, we were given a tour of their new facility. The Kem C. Gardner Supply Chain Facility is not just a warehouse, it also houses all of the supply chain functions of IHC and several other auxiliary services. The purpose of putting all of these services into one building is to reduce redundancy and exploit synergy effects. A great example of this is the pharmaceutical department working with the supply chain department. Pharmaceuticals moved their sorting and distribution operations to the facility so they could take advantage of the warehouse space and the courier center. Pharmaceuticals can only be handled by licensed professionals, which means that regular warehouse workers are not allowed to handle them. However, together they can take advantage of each others strengths and increase efficiency.
The warehouse itself is set up with an automated trolley system where employees handpick products. Each employee is equipped with a scanner on their finger, a computer on their wrist, and a headphone. This technology allows them to use voice picking with trolleys to fulfill orders quickly and efficiently.