Medline invests $1.5 billion in domestic healthcare supply chain

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Medline invested $1.5 billion to bolster the domestic supply chain, the Northfield, Ill.-based supplier announced Monday.

Medline added new distribution centers, U.S.-based manufacturing plants and upgraded its technology over the past three years, which created 8,500 jobs, eight new distribution centers, nearly 150 manufacturing expansion projects and a new digital ordering platform, the organization said. The company plans to spend an additional $500 million this year as part of the initiative.

“Our ability to be flexible for healthcare providers has been a direct result of our ongoing planning for the future,” Medline CEO Charlie Mills said in prepared remarks. “We know we can make healthcare run better by answering and anticipating the needs of customers.”

Medline plans to add more than 10 million square feet in warehouse space over the next four years with the goal of helping more health systems centralize their distribution networks.

The company is now manufacturing face masks out of its Lithia Spring, Ga. plant, in part, thanks to a $6 million contract with the Defense Department. Medline, which reported $17.5 billion in sales in 2019, looks to produce 36 million face masks per month.

Medline is one of several healthcare companies investing in domestic personal protective equipment manufacturing to wean off China and other international producers. While U.S.-based production will come at a premium, companies hope that onshoring or nearshoring production will add transparency and resiliency.

Ochsner Health partnered with Trax Development on a Louisiana-based joint venture that will manufacture, warehouse and directly distribute PPE for healthcare and other industries in Louisiana and nationwide, the health system announced Monday.

The $150 million investment will create a new 400,000-square-foot St. Martin Parish manufacturing plant and retrofit an 80,000-square-foot Lafayette Parish facility. The St. Martin Parish facility will primarily manufacture nitrile rubber gloves, which are still in short supply, while the Lafayette Parish plant will produce surgical tie-masks, bouffant hair covers, shoe covers, isolation gowns, procedure masks and N95 masks.

“COVID-19 brought to light our nation’s dependence on foreign countries, primarily China, for PPE,” Justin Hollingsworth, CEO of SafeSource Direct, the name of the joint venture, said in prepared remarks. “By manufacturing right here in Lafayette and St. Martin parishes, and selling directly, SafeSource Direct will be positioned to eliminate the lag times, uncertainty and frustration that plague international manufacturing and shipping. Our hope is that these facilities will lay the foundation for more independently sustainable health systems in the U.S.”



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