Medline sparks a revolution in healthcare supply chain management with SAP on Azure

With rising costs due to tariffs and an evolving regulatory landscape, today’s healthcare industry is under unprecedented strain. As a $25 billion-plus leader in medical-surgical supply manufacturing and distribution with a portfolio of more than 335,000 products, Medline works to help providers navigate these challenges. The company provides a global supply chain which is designed to help ensure that healthcare facilities and providers have the supplies they need at all times.

In providing essential medical products to a broad customer base ranging from local pharmacies to the largest health systems in North America and around the world, Medline aims to provide improved clinical, financial, and operational outcomes for healthcare providers. A missed delivery can mean a scheduled surgical procedure doesn’t happen, potentially affecting a patient’s health and a provider’s trust. With so much riding on its performance, Medline prides itself on being a driving force in medical products and supplies, pioneering resilient systems to support the agility and business continuity that health providers depend on.

Feeling the squeeze

Medline’s longstanding on-premises SAP ECC on HANA system supported everything from finance and supply chain to order management. But as Medline scaled globally, the system became a bottleneck that burdened the IT team with tactical rather than strategic work. 

To solve the capacity constraints and maintenance issues, Medline prepared to overhaul its on-premises environment. Medline Chief Information Officer Marshall Lancaster and his team began to see that what they needed wasn’t simply more capacity, but the ability to scale up and down dynamically. They realized a refreshed on-premises environment meant they’d eventually come up against scalability limitations and performance degradation issues again. Those factors—and the estimated $10 million-plus cost of an on-premises overhaul—sent the team looking into more flexible and future-proof alternatives in the cloud. 

Cloud considerations

After a rigorous investigation of available cloud offerings, Medline decided on Microsoft Azure to underpin its cloud infrastructure. The deciding factors were both technical and strategic. With Microsoft’s commitment to optimizing Azure for SAP workloads—plus SAP- and Intel-engineered solutions that use the advanced capabilities of Intel Xeon Scalable processors—organizations like Medline can focus on strategic business outcomes rather than routine systems administration. Beyond that, Azure was seen as the first step in enabling the creation of AI tools to drive resiliency in Medline’s supply chain.

Of course, security and compliance were paramount. “In healthcare, security and compliance are a priority,” notes Jason Kaley, SVP of IT Operations & Architecture at Medline.

As planning began, so did a new way of working between Medline and Microsoft.

“We were a Microsoft shop, but not a strategic Microsoft shop,” Kaley explains. “When we partnered on the migration, it ushered in a completely new way in which Microsoft and Medline work together. It became a partnership, with the cloud migration becoming a stepping stone to bigger and brighter, more business outcome–driven engagements.”

Managing the migration

Medline’s migration to Azure was not a simple “lift and shift.” It was a comprehensive re-architecture of the company’s most critical business systems. The technical challenge was immense.

To orchestrate the migration, Medline worked with Protera, a member of the Microsoft AI Cloud Partner Program holding a specialization in SAP on Azure and an Azure Expert MSP certification. Protera brought deep expertise in moving large, business-critical workloads to the cloud, automating processes, and adapting to Medline’s unique requirements. “They were an extremely capable and collaborative partner,” Lancaster says.

Transformational infrastructure and impact

For Medline, the move to Azure with SAP and Intel support wasn’t only a technical upgrade—it was a business transformation with measurable results. Transaction times for SAP workloads improved by more than 80% across some business-critical processes, and the average response time for the most essential transactions dropped by nearly 60%. Data exchange with partners became more efficient, with IDoc processing accelerating by more than 50%. Most important, these improvements weren’t abstract metrics. They translated directly into faster order processing, more reliable supply chain execution, and a better experience for Medline’s customers and partners.

The migration also enabled Medline to reduce operational overhead and free up capital for innovation. The shift from a capital-intensive, hardware-refresh cycle to a flexible, consumption-based operating model allowed Medline to align IT spending with actual business needs. 

“Guided by good financial and system management, we’re now moving capacity up and down on demand as required,” Lancaster explains. Medline’s transformed cost structure is already delivering meaningful bottom-line benefits, too. “Moving to Azure allowed us to meaningfully reduce our annual run rate,” adds Lancaster.

“Security and compliance have not only been maintained but strengthened through our Azure partnership,” explains Brian Wells, SVP of Sales & Operations at Medline. “By extending Medline’s core cybersecurity principles into the cloud, we’ve built on a foundation of protection that is both familiar and more resilient. The built-in security, monitoring, and compliance capabilities in Azure complement our existing program and standards, which are designed to ensure that sensitive health data and critical business operations remain highly secure.”

A commitment to co-innovation

Soon after the migration, Medline leaders saw an opportunity to take healthcare supply chain management to the next level. Seizing that opportunity, the company began development of Mpower™, an integrated, AI-enabled supply chain platform built in partnership with Microsoft.

Mpower™ brings together the risk-profiling and prediction capabilities of Medline’s longstanding Supply Chain Foundations system with Copilot in Azure, Power BI, Azure AI services, and the Microsoft Intelligent Data Platform. The integrated Mpower™ system enables real-time collaboration between purchasing agents and clinicians, automates workflow approvals, and provides predictive analytics to anticipate supply chain disruptions before they affect patient care. In practical terms, Mpower™ enables customers across the continuum of care to proactively mitigate supply chain disruption.

“Once we were in Azure, we saw how the Microsoft ecosystem tied Azure in with what people do every day in SharePoint, Excel, Outlook, and Microsoft Teams,” explains Lancaster. “By utilizing multiple vendor solutions and combining Copilot and Azure AI, we recognized we had a single platform that could support the Mpower™ vision we’d been designing. It changed the game for us when we realized we could deploy Mpower™ tied into Teams or Outlook, making it very easy for our customers to deploy.”

Mpower™’s AI-powered chat assistant lets users interact with the system by using natural language to describe the types of products they’re looking for or find suitable replacements for an out-of-stock item. Supply chain managers or clinicians can ask questions on pricing and availability in a Microsoft Teams chat or by speaking, and get immediate answers drawn from the integrated data. Mpower™ is currently scheduled to launch early in 2026. 

Summing up the impact of Medline’s move into the cloud, Kaley reflects, “The migration wasn’t just a technical success but also a strategic move that set the stage for innovation.” He concludes, “It’s allowed us to improve agility, and support AI and data-driven initiatives like Mpower™ to set the standard for supply chain management in the healthcare industry.”

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