McKesson 2012 Annual Report Download - page 8

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McKESSON CORPORATION
4
Distribution Solutions
McKesson Distribution Solutions consists of the following businesses: U.S. Pharmaceutical Distribution,
McKesson Canada, Medical-Surgical Distribution, McKesson Pharmacy Systems and Automation and McKesson
Specialty Health. This segment also includes our 49% interest in Nadro.
U.S. Pharmaceutical Distribution: This business supplies pharmaceuticals and/or other healthcare-related
products to customers in three primary customer channels: (1) retail national accounts (including national and
regional chains, food/drug combinations, mail order pharmacies and mass merchandisers); (2) independent retail
pharmacies; and (3) institutional healthcare providers (including hospitals, health systems, integrated delivery
networks, clinics and alternate site providers). This business also provides solutions and services to pharmaceutical
manufacturers. This business sources materials and products from a wide-array of different suppliers, including the
production of certain generic pharmaceutical drugs through a contract-manufacturing program.
Our U.S. pharmaceutical distribution business operates and serves thousands of customer locations through a
network of 28 distribution centers, as well as a primary redistribution center, a strategic redistribution center and two
repackaging facilities, serving all 50 states and Puerto Rico. We invest in technology and other systems at all of our
distribution centers to enhance safety and reliability and provide the best product availability for our customers. For
example, in all of our distribution centers we use Acumax® Plus, an award-winning technology that integrates and
tracks all internal inventory-related functions such as receiving, put-away and order fulfillment. Acumax® Plus
uses bar code technology, wrist-mounted computer hardware and radio frequency signals to provide customers with
real-time product availability and industry-leading order quality and fulfillment in excess of 99.9% adjusted
accuracy. In addition, we offer Mobile ManagerSM, which integrates portable handheld technology with Acumax®
Plus to give customers complete ordering and inventory control. We also offer McKesson ConnectSM, an Internet-
based ordering system that provides item lookup and real-time inventory availability as well as ordering, purchasing,
third-party reconciliation and account management functionality. Together, these features help ensure customers
have the right products at the right time for their facilities and patients.
To maximize distribution efficiency and effectiveness, we follow the Six Sigma methodology — an analytical
approach that emphasizes setting high-quality objectives, collecting data and analyzing results to a fine degree in
order to improve processes, reduce costs and minimize errors. We continue to implement information systems to
help achieve greater consistency and accuracy both internally and for our customers.
The major offerings of the McKesson U.S. Pharmaceutical Distribution business by customer group can be
categorized as retail national accounts, independent retail pharmacies and institutional healthcare providers.
Retail National Accounts — Business solutions that help national account customers increase revenues and
profitability. Solutions include:
xCentral FillSM — Prescription refill service that enables pharmacies to more quickly refill prescriptions
remotely, more accurately and at a lower cost, while reducing inventory levels and improving customer service.
xRedistribution Centers — Two facilities totaling over 500 thousand square feet that offer access to inventory for
single source warehouse purchasing, including pharmaceuticals and biologicals. These distribution centers also
provide the foundation for a two-tiered distribution network that supports best-in-class direct store delivery.
xEnterpriseRx® — A Software as a Service (SaaS) pharmacy management system, that allows large retail chain,
health system, and retail independent pharmacies to meet demand for prescriptions while maximizing profits
and optimizing operations.
xRxPakSM — Bulk-to-bottle repackaging service that leverages our purchasing scale and supplier relationships to
provide pharmaceuticals at reduced prices, help increase inventory turns and reduce working capital investment.
xInventory Management – An integrated solution comprising forecasting software and automated replenishment
technologies that reduce inventory-carrying costs.
xMcKesson OneStop Generics® — Generic pharmaceutical purchasing program that helps pharmacies maximize
their cost savings with a broad selection of generic drugs, low pricing and one-stop shopping.