Planner Remolds Co. Travel

<H1> Planner Remolds Co. Travel</H1><B>F</B>or Cardinal Health Insurance travel and fleet administrator Jill Marcinick, it's been a hectic year of transforming T&E management to enhance the bottom line.

Since the spring of 1995-when Marcinick's job changed from managing conferences to overseeing all corporate transient and group travel-the firm has developed a travel plan, adopted American Express as its travel agency and begun leveraging its transient and meetings volume through vendor negotiations as part of a rigorous campaign to keep administrative costs leveled at 3 percent.

In the past, Cardinal encouraged both senior-level vice presidents and regional managers to make their own travel policy decisions in pursuit of sales goals. "We service four different market segments: retail independent, retail chain, hospital and managed care," Marcinick said. "Each of these units has such different selling environments and clients that it seemed best to leave travel arrangements to the salespeople and their immediate supervisors."

Recent company acquisitions and price ceilings in the pharmaceutical market, however, shifted priorities and changed senior management's thinking.

A committee approach to running travel officially changed in November of last year, when Cardinal entered into a fee-based arrangement with American Express.

"The entire RFP process was a challenge because we used multiple agencies and didn't have any comprehensive T&E budget history when we started," Marcinick said.

At that time, Cardinal also chose preferred hotel and car rental vendors.

But challenge seemed to bring out the best in the company. With 13 acquisitions and a leap into national status behind them, Dublin, Ohio-based Cardinal seeks to retain profit leader status in a business that is notorious for slim margins. The company, which has outgrown its regional origins with a string of prudent acquisitions that began in 1979, last year boasted an annual earnings-per-share ratio of 22 percent-almost double that of similar companies of its scope. After closing 13 facilities, Cardinal now operates 30 warehouses, with greater operating efficiencies-including the possibility of automation-scheduled for this year.

Changes in travel policy over the past 18 months coincided with deals that made the $8 billion Cardinal one of the top five distributors.

In becoming a goliath with the breadth to service national accounts like Kmart and Wakefern Foods, Cardinal now must maintain the managerial control that will foster continued growth in an era when drug prices often are dictated by buyers. In 1995, it centralized purchasing, information systems and accounting in keeping with top-down directives for even tighter cost controls.

During a time when core distribution operations have been asked to lose excess weight, sales and marketing personnel are required to operate with greater efficiencies as well. Cardinal's sales force of about 600 representatives (with an additional 400 reps set to come on board from Pyxis, a wholesaler that Cardinal recently acquired) have a new level of accountability as the firm seeks to cut 10 percent from last year's T&E. Meetings expenses also are among the line items that have been assessed and retooled in response to the acquisitions of Pyxis and another wholesaler, Medicine Shoppe International Inc.

"It still makes sense for division vice presidents to run their sales and marketing operations without centralized management," Marcinick said. "But we began to see an opportunity to take a more uniform approach and negotiate differently for fleet and meetings and transient air travel when our accounting department determined that each of the four units had very similar travel patterns."

The travel policy, developed with Amex and a committee of senior management personnel, was approved by senior vice president of purchasing, human resources, the CFO and finally CEO Robert Walter.

This top-down support made all the difference, and Walter's seal of approval aided the negotiation process with airlines as well, Marcinick said. But the company still is working on achieving strict compliance with policy, and employees are adjusting to new paperwork and procedures.

Results have been a "so far, so good" proposition. "This is a young, dynamic company that is used to change and very good at handling new policy," said a grateful Marcinick, who realized changing a major standard operating procedure in the midst of rapid growth and volatile market conditions could have been far more difficult to manage. The fact that at the age of 26, she has taken on the dual role of centralized meeting planner and transient travel manager is a testament to the company's youth and can-do attitude, she said.

Marcinick-who speaks Japanese and began her travel management career with a Japanese travel agency and destination management company called Nissin Travel Service, based in nearby Columbus-describes her role at Cardinal as very hands-on. As part of the process of managing meetings, for example, she has been required to learn the nuances of her company's operation, often being asked to sit in on the sessions as a recording secretary so that she can later give pointers to administrative personnel and be a resource for ideas about meetings objectives.

Marcinick also handles site inspections, negotiations and much of the logistics for the 30 to 50 meetings-including four board meetings and two sales conferences-that the firm has run since she joined the company in 1994. She also has been building contacts with vendors such as caterers and hotels, hoping she will be in a strong position to handle the inevitable increase in volume that acquisitions-related transitional meetings will bring.

Cardinal has not negotiated with Amex's group division for an annual meetings service contract and does not plan to use meetings vendors for any of its large events, said Marcinick. The only exception will be an upcoming software training session in Dublin, which will be handled by director of sales administration Sam Rotella, who plans to partner with a destination management firm.

Looking forward, Marcinick said that centralized management of travel and meetings will yield significant cost savings. "Because senior management is so committed to making this program work, and because the program is so in line with the overall strategic initiatives, I think we'll be one of the success stories.