Throughout Unprecedented Pandemic Demand, Health Care Distributor Prioritizes Environmental Sustainability in Operations

Eric Schuler has seen “a lot of incredible growth” in his nearly 25 years with health care distributor Henry Schein, but nothing quite like the demands of 2020. Now Executive Director, Distribution Engineering, Schuler — who over the years has designed and built many of Henry Schein’s DCs, internal processes and systems both in the U.S. and globally — spoke with MDM about COVID-19 effects on the supply chain and how the Melville, New York-based company managed to maintain and even grow its environmental sustainability within DCs during the experience.

MDM: Along with the entire health care industry, Henry Schein experienced increased pressure on the supply chain because of the COVID-19 pandemic. What were some of the ways that the team mitigated the impact of the challenges?

Schuler: At the outset of the COVID-19 pandemic, our priority remained safeguarding the safety and security of Team Schein, while also ensuring our ability to continue serving our customers, some of whom have been on the frontlines in battle in the pandemic.

There was pressure on the supply chain because the pandemic limited the availability of essential PPE, such as masks, gowns, gloves, goggles and face shields — as well as cleaning solutions, diagnostics, surgical products, and wound care products, among other critical supplies. To mitigate the impact of these challenges for our customers, we worked tirelessly to source high-quality PPE, and other suppliers, while also maintaining daily contact with the government and manufacturers to press for a greater allocation of PPE to frontline health care professionals.

We focused on increasing the supply of PPE by working closely with our existing supplier partners to increase our product availability and evaluate opportunities in the wider marketplace.

We vetted through our rigorous quality review practices over 1,000 PPE offers to verify legitimate offers of quality products.

Additionally, to mitigate the supply chain bottlenecks that contributed to the supply chain shortages, our transportation team partnered with our global sourcing team, regulatory team, transportation carriers, manufacturers and government officials to navigate complex export regulations in a tight shipping market. The team also implemented mitigation plans in response to U.S. port congestions, which not only reduced delays, but also reduced air freight expenses in moving product.

MDM: How have you been able to continue your sustainability journey while dealing with all of that?

Schuler: We’re committed to setting smart targets across our sustainability framework. Targets that will help drive action in the business and supply chain. At Henry Schein, we have a complex and globalized supply chain operated in 32 countries and territories and serving more than 1 million customers worldwide. We operate a centralized and automated distribution network with 3.5 million square feet of space in 28 strategically located distribution centers around the world.

We recognize that with our global environmental footprint, and by leveraging our relationships with suppliers and business partners, we are well positioned to be a driving force for sustainability in the supply chain.

We work to reduce our environmental impact and promote responsible business practices not just in our own operations, but also in our supply chain in collaboration with our suppliers, partners and customers. We have four environmental focus areas, which are:

1. mitigating our impact on climate,
2. smart and efficient use of energy and water,
3. continually reducing waste to landfills, and
4. recycling and reusing valuable resources.

MDM: Recently, you announced your commitment to advancing ESG stewardship, including committing to an all-electric operations lift truck fleet in U.S. distribution centers, and decreasing landfill waste disposed by North American distribution centers by 5% by 2025. What are some of the positive changes that you all are taking to reduce environmental impact?

Schuler: Industry can and should play a crucial role in this area. Many of America’s health care distributors recognize the importance of protecting our planet. Some steps we’re taking at Henry Schein are, one, since 2008, we’ve been working to modernize our U.S. warehouse fleet with high-efficiency lift trucks and charging equipment. Two, our headquarter buildings in the United States have LEED Silver certifications totaling 285,000 square feet of LEED-certified space. And three, Henry Schein has donated more than $7.5 million in health care products to medical and health organizations to keep thousands of tons of imperfectly packaged products out of the landfills in 2020. By 2025, it will decrease the landfill waste disposed by our North American distribution centers by 5% over 2020 metrics.

MDM: Do your distribution centers recycle?

Schuler: Absolutely, yes. We work to avoid landfilled waste, both to retain precious raw materials and the economic cycle, and to prevent soil and water contamination, air pollution and degradation of nature in and around landfills. We scale our environmental impact downstream in our supply chain by encouraging our customers to go green in their health care practices and adopt a shared commitment to sustainability. Our water consumption at our distribution centers in North America, Europe, Australia and New Zealand and in our Melville offices in the U.S. during 2020 was 91 million liters.

We have limited direct product manufacturing. Therefore, our operations are not water intensive. We use water mainly at our distribution centers and offices for drinking, sanitation and cooling purposes, primarily from utility sources. However, we recognize the value of precious natural resources and use it wisely.

MDM: What about transportation throughout the pandemic, did you implement any plans to address that sustainably?

Schuler: Yes, our own fleet handles only a small portion of customer shipments, with the majority of such deliveries outsourced by logistic partners. We addressed both inbound and outbound activities in partnership with our carriers in North America, Australia, New Zealand and other regions.

In the U.S., we continue to work with United Parcel Service — a major contributor to our transportation footprint — on our joint commitment to sustainability.

For example, in 2018, we embarked on a joint study to benchmark and quantify the CO2 emission reductions resulting from the use of an enhanced network of mostly ground transport. Without this network, which uses special operating plans to reach customers by ground in one day, we would require air transport to guarantee same-day delivery service to our customers. We use and monitor the emissions from this enhanced network annually to continue to avoid unnecessary emissions and to identify further opportunities for improvement.

Also, by using our enhanced network, which applies only to our core distribution centers in the U.S., we mitigated our carbon impact in 2020 by 75%. That’s roughly the equivalent of taking 20,400 passenger cars off the road.