learning the business from the ground up: an interview with Steve Inacker
Today he heads one of the most complicated distribution networks in the nation. But Steve Inacker started in the business at the ground level—literally—as part of a conveyor installation crew.
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
Talk about an executive who's not afraid to get his hands dirty. Steve Inacker got his start in the logistics business back in high school, when he worked summers as part of a conveyor installation crew. It was not just a great learning experience (and a tidy little paycheck for a high-school kid); it was an experience Inacker later parlayed into a high-level distribution position at health-care titan Cardinal Health (19th on the Fortune 500).
In the intervening years, Inacker worked in sales, first for a distribution automation company and later for a health-care supplier, where he moved into management and consulting positions of increasing responsibility. But in 1998, managers at the company, which had recently been spun off as Allegiance Healthcare, got wind of his distribution background and promoted him to regional director for distribution in upstate New York.
With the exception of a two-year stint as a sales operations VP, he's been in distribution ever since. Today he's president of Hospital Supply Distribution for the company's Supply Chain Services-Medical operations, a position he has held since December 2004. In this position, he's responsible for the company's medical/surgical distribution business as well as the related sales, marketing, operations, and vendor relations functions. He oversees management of nearly 400,000 SKUs, ranging from surgical drapes, gowns, latex gloves and IV fluids to toxic chemicals used in diagnostic labs.
Inacker recently spoke with DC VELOCITY's editorial director, Mitch Mac Donald, about the challenges of truly time-critical distribution, the need for standardized product ID numbers in the health-care industry, and what it will take for companies like his to embrace RFID.
Q: You really are a textbook example of someone who got into this business right at the ground level, aren't you?
A: I guess I am.My interest in this business, oddly enough, started when I was in high school doing conveyor installations for Rapistan (which is now a division of Dematic). They needed summer help for installations and it was about the best job you could have because you mainly traveled along the Eastern Seaboard doing conveyor installations in different cities.You would be gone five days and come home on the weekend, pick up a paycheck, get your laundry done and then leave again on Monday. It was almost a dream job and you got to bank a lot of money. It gave me a lot of insight into what distribution, automation, and technology really looked like in some very sophisticated operations. I did that during the summer for a couple of years in high school and all through college. In my junior year of college, I did an internship with Rapistan.
Q: So, unlike the rest of us, you weren't completely unfaA miliar with the idea of logistics as a high school or college student?
A: That's right. I got a good sense of what it was all about from that experience. It wasn't something I specifically set out to do, but I had something of a mechanical bent and I found myself absolutely fascinated with the equipment and the technology. I think that moved me toward the profession, though my degree was in business management, not engineering.
After I finished college, Rapistan offered me a job as an apprentice engineer, which I thought might be interesting. I spent just about two years in that job, doing a lot of drawing—which, back then, was really drawing as opposed to the CAD systems used today—as well as all the field site work for various installations. At that point, my career took an unexpected turn. I took a position as a junior sales rep and then moved up through that part of the organization.
Q: So you initially migrated up through the ranks on the vendor side, rather than the end-user side. When did you cross the fence over to the user side?
A: In 1992, we were living in Grand Rapids, Mich., which was corporate headquarters for what was then, I think, Rapistan Dematic—the company name changed three times while I was there, so it's a little tough to keep track. One of my neighbors worked for a health-care company, Baxter, which had an opening in western Michigan for someone to sell medical products for use in the operating room. I wasn't looking for a new job—I had two young kids and I was traveling all the time for Rapistan—but I agreed to talk to them if for no other reason than to see what was going on in that industry.As it turned out, I really got along well with the management team and liked the opportunity and ended up making a career shift. I went from selling distribution automation technology to selling drapes and gowns and custom sterile kits in the operating room. That is about as far afield as you could possibly get.
Q: OK, so far you've been a conveyor installer, an apprentice engineer, a material handling systems sales rep, and a health-care products salesperson. Where do we go from there?
A: After about three years in that job, I moved to Detroit to take a job as a regional manager within the same division. During this time, Baxter spun off the distribution and manufacturing businesses to concentrate on its biotech businesses. The division I worked for became a new company called Allegiance Healthcare, which both manufactured health-care products and distributed supplies to acute-care hospitals. After a stint as a cost management consultant for our surgical division, I migrated back into distribution after the organization found out that I had a distribution background. There was an opening for a regional director of distribution in upstate New York. We packed up and went off to the Buffalo area, where I managed distribution, sales and operations for the upstate New York market.
After operating as a separate entity for almost three years, Allegiance was acquired by Cardinal Health in 1999. My next move was back into manufacturing, running sales operations for what was the custom sterile pack and procedure- based delivery business in Chicago. From there, I went on to oversee the technology side of the distribution business, which included responsibility for DC network design. At the time,we had a 54-DC network.My job was to decide where to put DCs, where to add annexes, how to refine the network, and what the transportation system would look like. The neat part for me was getting back into distribution technology with responsibility for all of the supporting technology, all of the infrastructure, all the conveyor systems and racking, all those kinds of things.
Q: Coming right back to that fascination that you had as a teen.
A: Exactly. It is probably one of the best jobs I've ever had because we got to re-evaluate and change what we were doing with what was, at the time, Cardinal Distribution. We had a very diverse mix of facilities—ranging from small (100,000-square-foot) manual operations to large (700,000-square-foot) metro centers with traditional conveyor technology to highly sophisticated facilities with mini-load AS/RS technology.
Q: Describe Cardinal Health and the operation that you are responsible for today.
A: Cardinal Health is a $75 billion health-care conglomerate based in Dublin, Ohio. The majority of our revenue (about two-thirds) is generated through pharmaceutical wholesale distribution. We play both in the retail space with traditional retail drug chains and the acute-care space, shipping into hospital pharmacies. After that, the medical/surgical distribution and manufactured products segments represent the next largest portion of the business.
Cardinal Health really isn't that old. It started in 1972 as a food distribution business, migrated to wholesale drug distribution and has continued to grow through acquisitions.
Q: I'd guess you face some logistics challenges that are unique to the health-care industry?
A: Absolutely. Probably the biggest one is the wide array of SKUs that we support in our 49 DCs. In our medical- surgical distribution business, which is the business that I have responsibility for, we actively manage about 390,000 SKUs.
I will complicate it a little further for you. There are really a couple of different elements to our distribution centers. You have what we call bulk deliveries, which are basically deliveries of medical-surgical products on pallets to a hospital. We also have a unique low-unit measure offering.We deliver totes of products to hospitals that can be taken directly to the stocking area for replenishment purposes as opposed to going into the storeroom.We also have a laboratory business called Scientific Products, so you are storing and managing all of the products, which include reagents and chemicals and toxic materials and refrigerated materials that are used in both standard diagnostic laboratories and in acute-care hospital labs.
On top of that, we are also a 3PL [third-party logistics service provider].We manage all of the IV fluids and associated products for Baxter, which we used to be a part of, for distribution into the health-care space, so we are a true 3PL. We don't own the inventory. We don't handle their customer service or invoices. All we do is pack and ship.We are a private-fleet distribution company. About 80 percent of what we ship goes out on our own trucks.
Q: Wow! How large is the fleet?
A: We have 650 power units and about 800 trailers. Again, this is specific to the medical-surgical hospital supply distribution business—we only handle the medical-surgical products, laboratory products, the IV fluids ... those types of things. It is about a $6.5 billion business.
Q: I'd guess your fleet handles a lot of time-critical shipments?
A: There's no question about it. We are hitting about 90 percent of our customers the day after they place their order. Think about it. You've got such a wide array of products. You've got frozen drugs that you have to deliver, uniquely packaged. You've got operating room (OR) procedure bundles—if a doctor schedules, say, an open-heart procedure, we bundle virtually all of the consumable disposables for that procedure into a kit and deliver it. It is obviously very time-sensitive for customers who are not keeping a lot of inventory. You've got all of the refrigerated product and cool room product. You have all the laboratory and reagent-type products. You have your IV fluids, so just about anything that you can think of in a hospital that is not equipment-based would go on our truck. We do sell equipment—light stands and poles and all those things—but it typically goes direct from the manufacturer as opposed to going through our distribution network.
Q: I'd also guess that some of the products you distribute require special handling because they're classified as hazardous materials or biohazards. Correct?
A: That is correct. We are regulated by the Food and Drug Administration (FDA), which means we must meet some pretty stringent requirements for the special packaging and special labeling for products. But more importantly, we have to track every product even down into our DCs so that in the event of a recall, we can tell the customer and the FDA exactly where and when and how much of each one of those products we shipped to a particular customer.
Q: You have to be able to track items right down to the unit level?
A: Yes, and what is difficult about that is that the healthcare industry lags behind most other industries when it comes to technology, especially with unique identification numbers. We have no standardized numbering system and thus, no standard bar-code symbology. As a result, we often wind up labeling product ourselves when it arrives at our DCs so that we'll be able to track it for FDA purposes should there be a recall.
Q: Do you see that problem being resolved anytime soon?
A: We have a lot of committees working on it, I will tell you that. It is frustrating because this has been a bone of contention for over 10 years. But because there are so many different health-care manufacturers, there has been very little collaboration in [moving industry toward adopting] a unified numbering system.
Since we are distributors, we don't drive that decision. We try to facilitate it, but our primary agent is our trade group, the Healthcare Industry Distributors Association. We have been working on this for years and years. I think we are starting to get some traction because HHS (the U.S. Health and Human Services Agency) and some other government agencies have stepped in and said you really need to do this. Big companies like Johnson & Johnson, 3M and Becton Dickinson are very compliant, but they're in the minority. I mean, they've got huge volume, but there are literally thousands of other manufacturers that don't see a need to comply at this point in time.
Q: And complicating all of that, you're trying to do this at a time when the health-care sector is seeing some rather substantial growth.
A: You can't deny the demographics. In the United States, every eight seconds, somebody turns 50 years old. That is when you start your largest consumption of health-care services.
Q: So business is going to be on an upswing at least through the next eight to 10 years when the tail end of the Baby Boomers hit that half-decade mark.
A: You're absolutely right. It is a good trend.
Q: With all the talk about RFID or this new thing I'm just learning about called RuBee, what do you see as the next big technological breakthrough for logistics?
A: I think RFID is certainly one that has everyone testing the waters. The Department of Defense mandated that its distributors use RFID and we are compliant with that, so we are using that technology. I'm not sure if that is going to be the game changer for health care. I would like to see something else that doesn't cost as much because we literally ship millions of boxes a month. The [RFID] tags just aren't cheap enough yet. We're not going to rush ahead with this until you see the price point for tags come down quite a bit.
Q: How do you define excellence in supply chain management?
A: What we're striving for is more seamless movement of product all the way back from the manufacturer through to the end user. It is what we call "from the dock to the doc." In other words, when the day comes when we can move the product smoothly through our channel with the fewest possible touch points, then we will have achieved supply chain excellence. Our supply chain is certainly not there today, but that is what we are striving for. We want to minimize those touch points that add cost, while still providing excellent service and value to the customer.
Q: Here's another question out of left field. If you were giving career advice to young professionals, what would you say is the single most important skill they need to succeed in the logistics profession?
A: I would tell them they need to be open-minded. They need to be flexible and they absolutely need to be willing to collaborate. Within our business, you serve so many different constituencies that there is no "one size fits all" model, so you can't go in with preconceived notions about what's going to work. You really have to listen and understand the needs of the customer before jumping to any conclusions about how you can successfully meet that need.
Warehouse automation orders declined by 3% in 2024, according to a February report from market research firm Interact Analysis. The company said the decline was due to economic, political, and market-specific challenges, including persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the Covid-19 pandemic.
The research also found that increasing competition from Chinese vendors is expected to drive down prices and slow revenue growth over the report’s forecast period to 2030.
Global macro-economic factors such as high interest rates, political uncertainty around elections, and the Chinese real estate crisis have “significantly impacted sales cycles, slowing the pace of orders,” according to the report.
Despite the decline, analysts said growth is expected to pick up from 2025, which they said they anticipate will mark a year of slow recovery for the sector. Pre-pandemic growth levels are expected to return in 2026, with long-term expansion projected at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
The analysis also found two market segments that are bucking the trend: durable manufacturing and food & beverage industries continued to spend on automation during the downturn. Warehouse automation revenues in food & beverage, in particular, were bolstered by cold-chain automation, as well as by large-scale projects from consumer-packaged goods (CPG) manufacturers. The sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% (durable manufacturing) and 10% (food & beverage), according to the research.
The Swedish supply chain software company Kodiak Hub is expanding into the U.S. market, backed by a $6 million venture capital boost for its supplier relationship management (SRM) platform.
The Stockholm-based company says its move could help U.S. companies build resilient, sustainable supply chains amid growing pressure from regulatory changes, emerging tariffs, and increasing demands for supply chain transparency.
According to the company, its platform gives procurement teams a 360-degree view of supplier risk, resiliency, and performance, helping them to make smarter decisions faster. Kodiak Hub says its artificial intelligence (AI) based tech has helped users to reduce supplier onboarding times by 80%, improve supplier engagement by 90%, achieve 7-10% cost savings on total spend, and save approximately 10 hours per week by automating certain SRM tasks.
The Swedish venture capital firm Oxx had a similar message when it announced in November that it would back Kodiak Hub with new funding. Oxx says that Kodiak Hub is a better tool for chief procurement officers (CPOs) and strategic sourcing managers than existing software platforms like Excel sheets, enterprise resource planning (ERP) systems, or Procure-to-Pay suites.
“As demand for transparency and fair-trade practices grows, organizations must strengthen their supply chains to protect their reputation, profitability, and long-term trust,” Malin Schmidt, founder & CEO of Kodiak Hub, said in a release. “By embedding AI-driven insights directly into procurement workflows, our platform helps procurement teams anticipate these risks and unlock major opportunities for growth.”
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”