Transforming Pharmaceutical Distribution Through Automation

Key Points

• One-third of the total pharmaceutical volume in the U.S. is picked, packed and shipped from McKesson’s 25 pharmaceutical distribution centers located across the country.
• McKesson opened two new distribution centers (Central Ohio, October 2022 and Clermont, March 2023) designed with advanced automation technology and sustainable upgrades.
• These centers are built to improve efficiency, accuracy, employee well-being and the overall customer experience.
• Automation reduces repetitive labor while enabling employees to focus on more meaningful, skill-advancing work.

The task is simple, or so it seems. You’re under the weather and need to visit your local community pharmacy or nearest retail chain to grab an over-the-counter medication for some much-needed relief. Maybe it’s an antibiotic or specialty prescription used to treat your chronic condition. 

No matter the situation, behind the task of picking up that medication is an integrated distribution network led largely by McKesson. In fact, one-third of the total pharmaceutical volume in the U.S. are picked, packed and shipped from McKesson’s 25 pharmaceutical distribution centers (DCs) located across the country.

In this fast-paced world of pharmaceutical distribution, efficiency, accuracy and employee well-being are paramount.   In 2022 and into 2023, McKesson opened two new DCs integrated with innovative technology and designed with sustainable upgrades in both facilities.

“Our latest DCs redefine distribution excellence and seamlessly blend advanced innovations with a commitment to our customers, our employees, and our environment,” says Todd Kleinow, vice president of strategic distribution experience, McKesson.

McKesson frontline employees complete the receiving and put away of goods.

Optimizing Efficiency and Customer Service

Through deep experience and innovative thinking, McKesson has continued to meet the growing needs of customers. With this longstanding goal in mind, McKesson has equipped its newest DCs  with advanced automation technology that revolutionizes the distribution process.

Inside McKesson’s “ultra” DC located in Central Ohio, an average of 17,000 reusable plastic totes — which are integral to the pick, pack and ship process — are shipped to customers every day. The totes travel across more than three miles of energy-efficient conveyer belts, starting from the packing locations and ending at the shipping stations.

Smart technology scans each tote throughout multiple checkpoints and resolves discrepancies to keep orders moving. An automated pick process, tote washer and storage systems were built to seamlessly handle volume increases and growth over time.

McKesson also opened its Clermont DC in Kentucky to process McKesson Plasma and Biologics orders, such as plasma-derived products and other specialty drugs at competitive prices. Similar to the Central Ohio DC, the Clermont DC was purposefully designed from end to end with customers in mind and is fitted with highly automated processes to improve efficiency and capacity, all while enhancing the overall customer experience.

“Ultimately, our goal was to integrate technology that makes the process of receiving products and life-saving medications easier, faster and more efficient for our customers and their patients,” Kleinow said.

An advanced robotic arm palletizes customer orders to prepare them for outbound shipping.

A Space Designed for Our People

Locus Robots lined up inside a McKesson DCs.

Recognizing that McKesson’s employees are the backbone of its success, the company has prioritized their well-being within these new DCs

The same automated technology that enables the DCs  to pick, pack and ship medications faster also helps reduce redundant and labor-intensive work, optimize employees’ productivity and allow them to focus on more meaningful work that advances their skills.

For example:

• In the Central Ohio DC, robotic arms automatically shrink wrap and secure pallets before loading and shipment.
• In the specialty Clermont DC, autonomous mobile robots help pick orders and transport them to shipping locations within the DC, reducing manual movement throughout the facility.

“Our employees are the driving force behind our success, which is why we prioritized designing an environment that provides the best possible experience,” said Kleinow. “Those on the frontline can now focus on more fulfilling responsibilities that directly impact customer orders.”

Windows line common areas, allowing natural light to fill the space.

The new DCs also include amenities designed to create a healthy, comfortable, safe and positive work environment.

High-bay windows – a rarity in warehouses – allow ample natural light to flood the workspace, which has been shown to boost employee mood and productivity. Additionally, the Central Ohio DCs  features a walking trail on the property, allowing employees to take breaks outside and supporting physical and mental well-being.

The new DCs have increased capacity in their training rooms as well, providing employees with opportunities for continued professional development and growth.

Training rooms and meeting spaces are designed to help employees advance their skills.

Looking to the Future of Distribution

With its newest DCs , McKesson remains at the forefront of supply chain innovation. As McKesson looks ahead, it continues to embrace new technologies like artificial intelligence and machine-to-machine communication to improve operational excellence.

“If you look forward 15 years or so, these are the type of facilities that will carry McKesson into the future,” Kleinow said. “We really found the right recipe with these DCs  to make that difference and to advance health outcomes for all.”