McKesson 2014 Annual Report Download - page 7

McKESSON CORPORATION
4
Distribution Solutions Segment
McKesson Distribution Solutions consists of the following businesses: North America pharmaceutical distribution and
services, International pharmaceutical distribution and services and Medical Surgical distribution and services.
North America pharmaceutical distribution and services
Our North America pharmaceutical distribution and services business is comprised of the following business units: U.S.
Pharmaceutical Distribution, McKesson Specialty Health, McKesson Canada, and McKesson Pharmacy Systems and Automation.
U.S. Pharmaceutical Distribution: This business supplies pharmaceuticals and/or other healthcare-related products to
customers throughout the United States 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 certain generic pharmaceutical drugs produced through a contract-
manufacturing program.
Our U.S. pharmaceutical distribution business operates and serves thousands of customer locations through a network of 29
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 most 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, institutional healthcare providers and independent retail pharmacies.
Retail National Accounts — Business solutions that help national account customers increase revenues and profitability.
Solutions include:
• Central 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.
• Redistribution Centers — Two facilities totaling over 750,000 square feet that offer access to inventory for single source
warehouse purchasing, including pharmaceuticals and biologics. These distribution centers also provide the foundation for
a two-tiered distribution network that supports best-in-class direct store delivery.
• McKesson SynerGx® — Generic pharmaceutical purchasing program and inventory management that helps pharmacies
maximize their cost savings with a broad selection of generic drugs, low pricing and one-stop shopping.
• EnterpriseRx® — 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.
• RxPakSM — 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.
• Inventory Management — An integrated solution comprising forecasting software and automated replenishment technologies
that reduce inventory-carrying costs.
• ExpressRx Track™ — Pharmacy automation solution featuring state-of-the-art robotics, upgraded imaging and expanded
vial capabilities, and industry-leading speed and accuracy in a radically small footprint.
• Supplylogix® — develops and delivers practical supply chain intelligence solutions for pharmacy and related businesses and
services a wide array of healthcare providers nationwide.