Commercial and Operational Evaluation of 4PL Arrangement

Cardinal Health Australia (CHA) is a subsidiary of Cardinal Health. CHA engaged a leading Logistics Service Provider (LSP) to handle all supply chain operations. The costs charged by the LSP to CHA exceeded the original estimates and were significantly higher than comparable markets. Cardinal wanted to review its logistics operations and costs for its Australian operations to help identify savings/optimization/efficiency opportunities.

After reviewing the operations and costs, Nexdigm identified opportunities for cost savings of over AUD 0.8 million in annual costs. We evaluated opportunities to reduce order receiving costs by 89%. We also created smarter palletization models coupled with inventory pruning of low-value slow movers to drive potential cost-savings of up to 60%.

Overall, Nexdigm managed to achieve 33% annual cost savings in regard to the LSP.