Sunrise Medical targets 80% next-day delivery

Tuesday, May 31, 2005

LONGMONT, Colo. -- Sunrise Medical furthered its mission to reach 80% of the U.S. population with standard, next-day shipping by opening a sixth distribution facility in High Point, N.C., this month.
Earlier this year, Sunrise opened a fifth facility in Worcester, Mass. By next year, the company plans to open additional facilities in Orlando (July 2005), Dallas/Fort Worth and Chicago (early 2006).
Before the expansion plans got underway, the company shipped 31% of its stock volume on a standard next-day basis from three centers: Fresno, Calif, Memphis, Tenn., and Harrisburg, Pa. By the time the Orlando facility is operational, Sunrise expects to have doubled its next-day capabilies.
After Chicago opens, 80% of Sunrise Medical's products will ship next-day and an additional 17% will be available two-day.
"All of our customers are having the same problems we are," said Bob Von Kaenel, vice president of marketing. " How do you begin to decrease inventory so you have improved service. If we can provide more just-in-time delivery, if we can find a way to partner with customers to reduce their lead time and provide more responsiveness, we both win."
Just-in-time delivery has become a buzzword for HME suppliers who are trying to draw blood from stones as they cut costs in a market of dwindling reimbursement. By not warehousing inventory, suppliers free dammed-up cash flow to do work elsewhere. But this kind of inventory is not without risks.
"In this business, it's extremely critical that I not tell [a referral source] 'no,'" said Gary Miller, director of Mt. Carmel Medical Equipment in Pittsburg, Kan. "I better have a way to get it. If Sunrise is telling me I can get it within a day, we could retool our model and not have to keep so much critical inventory on hand."
Currently, none of Miller's equipment comes next-day unless he pays extra for shipping. By next year, he may be in luck since Sunrise Medical plans to cover part of Kansas with standard next-day service.
Sunrise has some catching up to do. Its chief rival, Invacare, reports that its carriers can reach 91% of the country next day. From four distribution centers, Graham-Field said it's reaching 70-80% of the population next-day. Respironics gets to 63% of its customer base next-day. And from three distribution centers, Drive is getting to 20-30% of its customers next day.