Illustration by Victoria Borges
As the novel coronavirus took hold on our shores early last year, it caught the health care industry and the government unprepared.
“What’s going on, sir?” Jim Cramer, host of CNBC’s “Mad Money,” asked Ed Pesicka, president and CEO of Owens & Minor, a metro-Richmond-based medical supply business, expressing the shock that many Americans were feeling concerning the state of the country’s health-care supply chain. “There aren’t enough ventilators, there aren’t enough personal protective equipment — masks, gowns, gloves that literally shield doctors and nurses from the virus,” Cramer continued. “The pandemic keeps revealing the hidden weaknesses in our economy. The one that really shocked me was, and we still aren’t doing enough to scale up production. That’s why we really need to dig down into America’s medical supply chain.”
Owens & Minor has distribution centers across the United States and in Europe. (Photo courtesy Owens & Minor)
In that March 27, 2020, broadcast, Cramer put Pesicka on the spot, calling Owens & Minor an essential cog in the health care structure. The Fortune 500 company, which distributes medical equipment products and machinery directly to customers, reported $9.2 billion in revenue in 2019 and has 15,000 employees worldwide, including over 1,201 in Virginia, 831 of them in the Richmond area.
Pesicka explained how demand for his company’s products had increased at New York hospitals, which was then the epicenter of the virus. He noted that one customer was getting 10,000 to 20,000 masks each week and was asking for 200,000 per week. Similar requests were coming in from customers across the nation. “I do not know when we will have enough masks,” he told Cramer. “We’re going to have to produce as many masks as we can.”
Major Ramp-up
Since February 2020, Owens & Minor’s production had expanded to four shifts a day to meet that demand. Production of surgical N95 respirators has risen over 1,000% at three of its locations in the Americas. They increased production of the in-demand surgical and procedure masks nearly 100%, and face-shield production grew over 600% through new capital investment and improving the efficiency of operations at their Acuña, Mexico, plant.
Pesicka joined Owens & Minor in March 2019. A profile in Virginia Business magazine reported that the former youth and high school football coach had spent 15 years fostering biotech products as chief commercial officer and senior vice president of Thermo Fisher Scientific. Prior to that, he worked at TRW Inc.
He has led Owens & Minor through a period of intense production growth during the pandemic, resulting in stock prices skyrocketing due to the brisk demand for PPE. Its stock rose from just over $8 a share in early July to almost $31 a share by year’s end.
Owens & Minor was founded as a drugstore in Richmond in 1882. (Photo courtesy Owens & Minor)
Products Save Lives
Company materials emphasize the critical role of its medical products in keeping people alive.
Kelly Merkel, director for operations of Owens & Minor’s Ashland distribution center, published a Health Hero 2020 post in the December 2020 Richmond Times Dispatch Discover magazine that offered a window into daily activity at Owens & Minor’s 177,000-square-foot Ashland warehouse where they stock 22,000 products.
“Our three shifts — receiving, replenishment and outbound — are handled by about 120 teammates and might include 25 tractor-trailers, and we work 24/7 on weekdays, plus six to seven hours on weekend days,” Merkel wrote.
Owens & Minor is unique in that it can use a much shorter supply chain due to their footprint and manufacturing ownership.
“We are not as dependent on distant third-party manufacturers to make critical PPE products as many others are in the industry,” Pesicka says. “It is our intent to continue to build on these capabilities in years to come.”
“We went from [producing] roughly 50 million to well over 100 million of those [masks] every month.” —Ed Pesicka, president and CEO of Owens & Minor
Owens & Minor was founded in Richmond in 1882 as a drugstore. As the company has grown, it has remained here for the past 138 years.
“Like any company, we adjust our focus from time to time to make sure that customers remain at the heart of what we do,” Pesicka says. “Owens & Minor is deeply intertwined with the Richmond community. We’re proud of our Richmond roots.”
Owens & Minor also touts its community involvement, with initiatives including an elementary school mentoring program that had its workers paired with third graders at Fairfield Court Elementary School, with the mentoring continuing through fifth grade. The business in such as the past year also provided a work-study program for students from Cristo Rey Richmond High School and participated in fundraisers for nonprofits the American Heart Association and the March of Dimes.
Production and distribution efforts have ramped up at Owens & Minor during the pandemic. (Photo courtesy Owens & Minor)
Pandemic Response
On May 14, 2020, then-President Donald Trump visited Owens & Minor’s Allentown, Pennsylvania, facility, lauding Pesicka and the company for their efforts to send crucial supplies to those who needed them.
A month later, during a Greater Richmond Partnership Regional BioScience roundtable on Zoom, Pesicka explained how, while serving on the White House Coronavirus Task Force, he had daily meetings to first identify the location of needed products like N95 masks and face shields and then how to find ways to expedite the delivery of those products to those who needed them. The task force and Project Airbridge, one of the administration’s efforts to deliver PPE, ventilators and other supplies to health care providers during the COVID-19 pandemic, has been widely criticized because health workers around the country lacked the needed equipment over the course of 2020.
“We went from [producing] roughly 50 million to well over 100 million of those [masks] every month,” Pesicka told the panel. “And the one thing that makes Owens & Minor able to do this is that we own the technology, patents, quality control, FDA interface, so that during the pandemic we’ve been able to rapidly increase the inflow of product from our facilities here in the U.S. to our customers to mitigate the risk. It’s been a tragic situation.”
In fall 2020, the company moved out of its Riverfront Plaza downtown call center location as it shifted its workforce to remote work. The company home office, which was built in 2006, is located on 25 acres in Atlee Station in Hanover County. The company says that it wants to expand its campus with the addition of a distribution center and a surgical kit assembly facility.
Pesicka said Owens & Minor’s location in metro Richmond gives it the ability to bring good talent to the region because people want to move here, and there are plans to continue to expand. In December, dozens of Richmond-based job openings were listed on the company’s website, for positions ranging from engineers to warehouse workers.
“As the needs of the health care industry continue to evolve, Owens & Minor knows that supply chain resiliency and continuity of supply is critical to our customers,” Pesicka said in an email statement. “Owens & Minor’s Americas-based manufacturing enables us to provide this increased resiliency as we continue to ramp up our PPE production.”
