Trinity Health and XPO Logistics, Inc. (NYSE: XPO) have announced plans to build the first of four state-of-the-art Trinity Health supply distribution centers in Fort Wayne, Ind. The 21-state hospital system will use the new centers to help transform its operations in alignment with its work building a people-centered health system focused on improving health and reducing costs for the people and communities it serves. The project is expected to create 75 jobs in Indiana.
"This initiative represents an enormous change in the way we stage and move supplies to our hospitals," said Lou Fierens, senior vice president, Supply Chain and Fixed Asset Management, Trinity Health. "The modern, world-class facility and distribution process we are creating with XPO will help us further our Lean/Kanban approach to supply chain management for the benefit of the individuals and communities that rely on us for high-value services. It also allows us to collaborate with our suppliers in a much deeper and more productive way by eliminating non-value-added work for all the participants in the supply chain, including our caregivers."
XPO Logistics will manage and operate the new $26 million facility as Trinity Health’s contract logistics manager. As the first of four Trinity Health strategic supply distribution centers, the Fort Wayne logistics hub will provide easy and affordable access to the Great Lakes/Midwest region and beyond. The facility will represent the single entry point for all manufacturers and suppliers serving Trinity Health. As additional strategic satellite warehouses are brought online over the next five years, Fort Wayne will serve as the central restock and inventory fulfillment site for those locations as well.
The new model gives Trinity Health more direct control over the part of the supply chain that is typically managed by an intermediary. The shift to managing its entire supply chain is considered key to helping the system advance its initiatives for streamlining logistics processes in support of its larger goal, which is improving the delivery of cost-effective, people-centered care.
Trinity Health has spent the last three years working toward this significant change, first standardizing the products it supplies to its hospitals and helping streamline related clinical procedures, and, next, by implementing Lean-based Kanban and Low Unit of Measure inventory management systems. XPO Logistics and Trinity Health are collaborating on the design and implementation of Trinity Health’s future network structure and supply chain flow, identifying strategic opportunities to reduce costs, eliminate waste, and improve order quality and velocity.
"This is an exciting day for all of us; it will boost the local economy and deliver on our promise to Trinity Health of consistent, efficient, high-quality service that exemplifies our commitment to sustainable business practices and continuous improvement," said Ashfaque Chowdhury, president of supply chain for the Americas and Asia-Pacific, XPO Logistics. "This is an important project for XPO on many levels, because by helping products reach their destinations efficiently, we are also contributing to an important human benefit – the health and wellness of the people Trinity Health serves."
Conlan Construction will serve as the general contractor. Construction of the new facility is expected to take about a year with initial site preparation expected to begin in the first quarter of 2016. Trinity Health's future satellite locations, each placed strategically to ensure ease of reach to Trinity Health facilities across the country, will enable swift distribution while preserving the single entry point for manufacturers in Fort Wayne.
Fort Wayne, located in Northeast Indiana, is approximately two hours from Indianapolis and three hours from Chicago, Detroit, Columbus and Cincinnati. It is among the most cost effective regions for distributing to national markets and will give Trinity Health the ability to quickly and easily supply its hospitals and other facilities with standardized products, pricing and procedures that eliminate the risk of error.
“Indiana has worked diligently to create a business-friendly climate by cutting taxes and reducing regulations,” said Governor Mike Pence. “We’re proudly known as the Crossroads of America, and with the logistics industry expected to more than double by 2035, we’re making unprecedented investments in our infrastructure statewide to ensure that global companies like XPO Logistics continue to choose Indiana for growth and job creation.”
Trinity Health is one of the nation's largest not-for-profit health systems. It has recently announced many strategic partnerships and initiatives intended, like this one with XPO Logistics, to help it achieve its goal of becoming a People-Centered Health System that provides better health, better care and lower costs to the communities it serves.
About Trinity Health
Trinity Health is one of the largest multi-institutional Catholic health care delivery systems in the nation. It serves people and communities in 21 states with 90 hospitals, 124 continuing care locations — including home care, hospice, PACE and senior living facilities — that provide nearly 2.5 million visits annually. Based in Livonia, Mich., and with annual operating revenues of $15.8 billion and assets of $20.4 billion, the organization returns about $1 billion to its communities annually in the form of charity care and other community benefit programs. Trinity Health employs about 95,000 full-time employees, including 3,900 employed physicians. Committed to those who are poor and underserved in its communities, Trinity Health is known for its focus on the country's aging population. As a single, unified ministry, the organization is the innovator of Senior Emergency Departments, the largest not-for-profit provider of home health care services — ranked by number of visits — in the nation, as well as the nation’s leading provider of PACE (Program of All Inclusive Care for the Elderly) based on the number of available programs. For more information, visit www.trinity-health.org. You can also follow @TrinityHealthMI on Twitter.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including future project plans and construction schedules. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as "continue," "could," "intend," "plan," "should," "will," "expect," "project," "goal," "target" or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances.
These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include those discussed in XPO's filings with the SEC. All forward-looking statements set forth in this press release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, XPO or its businesses or operations. Forward-looking statements set forth in this press release speak only as of the date hereof, and XPO undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events except to the extent required by law.
