2013

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COMPANY

Pharmaceutical products distributor

Pharmaceutical products retail chain with about 1,000 sales points. The product-mix is about 5,000 SKU, 30+ suppliers, lead time from 1 to 15 days. Annual revenue was about $50MM

SITUATION

Supply chain performance issues

A5 contacted Inventor Soft to assess the existing retail chain's inventory management system. The network service level was below 90%, and the A5 felt that over-stocks were half of the total stock. Ten different-format retail outlets were selected for the analysis

SOLUTION

As part of the project, the following work was done:

  1. Analysis of freight traffic on a pilot sample of pharmacies and determining efficiency reserves in the inventory management system

  2. Efficiency reserves report prepared

  3. Products that require inventory at points of sale have been identified: no sales for goods that available at a sale point

RESULTS

A lot of latent possibilities unveiled as a result of pilot project:

  • Gross profit raised by 40%

  • Sales up by 10%

  • Inventory level decreased by 50%

  • Service level increased by 9%

  • Working capital decreased by 3%

  • Replenishment frequency decreased by 25%