Pharmacy Systemness, Part Three: Why a Consolidated Distribution Model Makes Sense for Health Systems

By Mitch Wood |

The Primary Benefits Consolidated Distribution Offers Health Systems

In our previous articles, we examined how a centralized distribution model can be too costly for pharmacies and how a consolidated model provides a more cost-efficient process. In this last installment, we take a closer look at some of the key ways a health system can benefit from consolidated distribution.

Building a centralized distribution operation would likely require a multi-million-dollar capital investment. Instead, you can save those dollars by leveraging existing space at one or more of your facilities. Plus, the internal distribution network you have already established can be used to deliver supplies to hospital departments and alternate sites of care.

With the consolidated distribution model, you can also control the pace of the evolution. Conversely, if you were to build your own warehouse, you would likely be transitioning multiple service lines at once. But by leveraging your existing distribution resources, you can ramp up individual lines at a pace that is comfortable for your organization.

Tips for Getting Started

To design and implement the most effective consolidated distribution solution for your pharmacy operations, focus on understanding these key areas:

  • Drug distribution and prescription volumes and spend
  • The pharmacy services that flow through your organization
  • Your unique local and regional supply chain fulfillment processes and practices
  • Supply chain labor (both full and part-time) costs
  • Technology costs
  • The impact of the regulatory environment

Armed with this information, you can then begin a feasibility study to determine what it will take to design, implement and sustain a successful consolidated distribution model.

For more information on reducing pharmacy costs and improving pharmacy systemness efficiency through consolidated distribution, download this white paper or contact us at, or 877-892-1254.


About the Author

Mitch Wood

Managing Director, Supply Chain Consulting Services
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