New Order Entry System for Cardinal’s MD Customers

Edition: March 2003 - Vol 11 Number 03
Article#: 1473
Author: Repertoire

Cardinal Health hopes to strengthen its grip on the non-hospital medical/surgical market with its newest electronic ordering system, cardinalMD.com.

Launched in November, the system gives physician offices and outpatient centers access to an online catalog of more than 30,000 items. It’s designed to be a simpler alternative to the graphic-rich, data-rich cardinal.com Web site, which contains more than 300,000 items and thousands of graphics. The primary target is the small- to medium-size physician practice.

“Cardinal.com was built from an acute care standpoint,” says Mike Orscheln, vice president and general manager, ambulatory care, for the Medical Products and Services group of Cardinal Health (formerly Allegiance Healthcare). “But when you look at a physician’s office, which might be on a 56K modem, you realize you can’t drop this graphic-rich, text-rich site on them. And if they search for exam gloves and find 50 or more choices, it gets way too complex.”

Even so, physician customers can continue to use cardinal.com to place their orders or, if they can’t find what they want on cardinalMD.com, they can switch over to cardinal.com.



Role of Technology

After talking to customers and their own sales reps, Cardinal worked briskly to put together the physician site.

“Technology will play a huge role in this marketplace in the future,” says Orscheln. “So we went to our IT team and said we needed a physician office technology solution within six to eight months. They quickly built the entire Web site, which has gotten wonderful feedback from our customers.”

In its first month of operation, cardinalMD.com generated $1.2 million of sales. In December, that number jumped to $2 million. “We expect that over the next 18 months, we’ll probably see 35 percent to 50 percent of our [non-hospital] volume going through some form of technology, either cardinalMD.com or cardinal.com,” says Orscheln.



A Good Thing

Cardinal Health executives welcome customers placing orders through the Internet. “It makes it very convenient and cost-effective for our customers to do business with us,” says Orscheln. For its part, Cardinal Health gains an efficient order entry system and easy access to valuable information.

“Think about this. The nurses in these offices are very, very busy. They have to collect orders, and then wait for a rep to come in to place them. That takes more time than sitting down at a computer and placing an order via cardinalMD.com,” says Orscheln.

Specific lists can be created for each doctor in the practice or can be segmented based on the type of product being ordered. Those using the service have access to special offers on supplies and equipment, as well as a variety of payment options at checkout, including purchase orders and credit cards. Practices can also retrieve real-time information ranging from a full year of searchable purchasing history to trends in product demand.

In addition, customers see what price they’ll pay and where the order will be shipped from – and when. “We modeled this after a business-to-consumer site, so it provides customers everything they need up to the minute they place the order,” says Orscheln.

Sales reps are commissioned for sales made through cardinalMD.com, just as they are for sales made via phone, fax or U.S. mail.

CardinalMD.com orders are shipped from 20 sites around the country. (Altogether, Cardinal has 50 distribution sites, including low-unit-of-measure facilities.) Together, they offer next-day delivery on 90 percent of all orders placed. (The remaining 10 percent can be delivered in two days.) Currently, customers cannot specify whether they want next-day or two-day shipping, says Orscheln. However, in future versions, they’ll have that option.



Marketing the Site

To generate interest in the site, Cardinal Health has conducted a direct-mail campaign to current and potential customers. At the same time, the company has trained its reps on the site, so they will encourage their customers to use it, says Orscheln.

“When we educate our sales force, they find the site easy to use. They understand it, they feel comfortable with it and they walk their customers through it. The next thing you know, customers aren’t placing orders with the rep anymore, [but with cardinalMD.com]. That means our reps are free to call on other customers, providing more service.”

Cardinal Health believes the investment in information technology is essential for the company’s continued success and growth in the non-hospital market. “This is not unlike the acute care marketplace in the early 1980s, when ASAP [American Hospital Supply’s automated entry system] was introduced,” says Orscheln. “As customers began to use it, they became more interested in the convenience it offered.

“Today, one- or two-physician practices are not adopting the Internet as rapidly as larger practices. But it’s coming. Physicians know they can get access to information and that they can use the Web to place orders. They recognize this will happen.”