When Covid-19 infections surged in New York last spring, a rush on medical supplies caught healthcare providers off guard, challenging inventory and tracking systems built for more predictable demand.
To cope with that volatility, more manufacturers and suppliers are scaling up the use of tracking technology to ensure critical medical shipments arrive on time and intact. Sophisticated devices that log a shipment’s location and temperature in real time have become essential tools in the rush to distribute fragile Covid-19 vaccine shots, for example, to pandemic-weary populations.
“You have a pandemic and it blows everything out of the water,” said Sean Halligan, senior vice president of pharmaceutical supply chain for Dublin, Ohio-based Cardinal Health Inc., which began working with freight-tracking software startup FourKites Inc. in March 2020 on a pilot to track shipments of personal protective equipment between manufacturing plants and the company’s distribution centers. “It really throws traditional planning, traditional rates of speed of supply into a frenzy.”
Cardinal had been looking at visibility technology before the pandemic because it wanted to give its customers the kind of detailed tracking information that consumers have come to expect from growing parts of the digital economy such as ride-sharing services. “We said, ‘that’s coming to the supply chain,’” Mr. Halligan said. “We need the ability to see the dot coming.”
The pandemic crystallized that effort.
On Wednesday, Chicago-based FourKites said it has raised a $100 million Series D round that brings its total capital raised to over $200 million. The round was led by Thomas H. Lee Partners LP with participation from investors including the venture arms of telecommunications company Qualcomm Inc., auto maker Volvo Group and logistics equipment provider Zebra Technologies Corp.
FourKites founder and Chief Executive Mathew Elenjickal said the funding would help the company develop more features and functions, such as the ability to track products in warehouses and in stores, and to expand into new markets such as China. The provider also wants to extend visibility further upstream in the supply chain, so customers can track the availability of raw materials, for example.
Founded in 2014, the company now has 525 employees and says it expects to generate $100 million in revenue “in less than two years.”
FourKites’s platform is also being used in the vaccine distribution effort, and to track shipments of respirator masks from manufacturer 3M Co.
FourKites and Cardinal built a customized system to track temperature-sensitive medical products, and Cardinal has expanded use of the technology across all its domestic transport modes, including trucking and air transportation.
During last month’s severe winter weather across the U.S., Cardinal used the technology to track a truckload of pharmaceutical supplies bound for a hospital in New Orleans from Jackson, Miss. “The freeway was shut down, the truck was pulled over on the side,” Mr. Halligan said, and Cardinal could alert the customer when the shipment was moving again.
Tracking technology is becoming essential for medical and other suppliers, especially given the disruptions over the past year, said Tony Palcheck, managing director of Zebra Ventures.
“You could be the PPE manufacturer that needs plastic,” he said. “You need to know when it’s coming in…You can’t say [to customers] when something’s going to get there if you don’t know where it is in the supply chain.”
Write to Jennifer Smith at [email protected]
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