Working Wednesday: How Many Companies Are In Your Distribution Chain?

Sometimes it is an advantage to be a small company. One of those advantages is face-to-face business dealings. You work directly with others. You shake hands, a bill of sale, a form of payment, and a receipt is handled between the two of you. Problems can be resolved without third parties. Trust had been established some time ago and a list of solutions is thorough with an end result satisfactory to both. Likewise, new ideas are just an e-mail or phone call away.

But what if you are part of a bigger chain? You have pieces and parts coming in the front door and finished products shipping out the back to another company as part of a much larger picture. You figured out a service that is unique but dependent upon others doing their jobs. What then?

Cardinal Health was fined for not reporting something suspicious about drug shipments to certain pharmacies. The pharmacies were becoming "pill mills".See: http://www.dispatch.com/content/stories/business/2012/08/24/cardinal-facing-more-dea-scrutiny.html

Now I am definitely not an expert on drug manufacturing. That is way too complicated for me on many levels. But it appears Cardinal Health did not contact DEA as they should. They are a large corporation and should have had enough employees to have the expertise to know better. But again, I did not follow the lawsuit. I am only interested in this from a small business perspective.

Here is my point: Know your distribution chain. Know the whole chain not just your part. Be aware of ethics, laws, liabilities, and anything else that could put your business on the wrong side of the law. Get advice if you have to. Cardinal Health was not the pill mill, but they still got in trouble.

In this case, it sounds as if Cardinal Health was selling directly to the pharmacies, a one-on-one transaction. Normally, you would think this would give you some safe guards. But the drugs were quite potent, which got C.H. into trouble, and there were extra regulations with those drugs. So don't be fooled either. Even your "bff"s need to be checked out every once in awhile.