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Trinity Health awards logistics contract to XPO Logistics 09 March 2016

3PL will manage and operate new distribution centre facility

Trinity Health and XPO Logistics have announced plans to build the first of four state-of-the-art Trinity Health supply distribution centres in Fort Wayne, Ind. The 21-state hospital system will use the new centres to help transform its operations in alignment with its work building a people-centred health system. The project is expected to create 75 jobs in Indiana.

This initiative represents an enormous change in the way that Trinity Health stage and move supplies to its hospitals. The new facility will help it further a Lean/Kanban approach to supply chain management. It also allows it to collaborate with suppliers in a much deeper and more productive way by eliminating non-value-added work for all the participants in the supply chain.

XPO Logistics will manage and operate the new US$26.0 million facility as Trinity Health’s contract logistics manager. As the first of four Trinity Health strategic supply distribution centres, the Fort Wayne logistics hub will provide easy and affordable access to the Great Lakes/Midwest region and beyond. The facility will represent the single entry point for all manufacturers and suppliers serving Trinity Health. As additional strategic satellite warehouses are brought online over the next five years, Fort Wayne will serve as the central restock and inventory fulfilment site for those locations as well.

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 considered key to helping the system advance its initiatives for streamlining logistics processes in support of its larger goal, which is improving the delivery of cost-effective, people-centred care.

Trinity Health has spent the last three years working toward this significant change, first standardising the products it supplies to its hospitals and helping streamline related clinical procedures, and, next, by implementing Lean-based Kanban and Low Unit of Measure inventory management systems.

XPO Logistics and Trinity Health are collaborating on the design and implementation of Trinity Health’s future network structure and supply chain flow, identifying strategic opportunities to reduce costs, eliminate waste, and improve order quality and velocity.

Conlan Construction will serve as the general contractor. Construction of the new facility is expected to take about a year with initial site preparation expected to begin in Q1, 2016. Trinity Health's future satellite locations, each placed strategically to ensure ease of reach to Trinity Health facilities across the country, will enable swift distribution while preserving the single entry point for manufacturers in Fort Wayne.

Fort Wayne, located in Northeast Indiana, is approximately two hours from Indianapolis and three hours from Chicago, Detroit, Columbus and Cincinnati. It is among the most cost effective regions for distributing to national markets and will give Trinity Health the ability to quickly and easily supply its hospitals and other facilities with standardised products, pricing and procedures that eliminate the risk of error.