Drogueria Betances increases sales and reduces stock levels

To serve over 800 independent pharmacies and numerous chain-store pharmacies in Puerto Rico and the Virgin Islands, pharma wholesaler Drogueria Betances turned to IBS ERP software

Sales volumes have increased by 2% and inventory levels have reduced by 10% after implementation of IBS pharmaceutical ERP software according Juan Hernandez.

It all started in 1962 when Luis Cartagena founded Drogueria Betances (DB). Located in Caguas, Puerto Rico, this was a logical progression from a small pharmaceutical warehouse operation, which Luis’s father had been running for many years.

In 1962 DB consisted of a 3,000 square foot storage/office site. Today at 80,000 square feet, DB’s physical plant is over 25 times larger and the work force is 160 strong. The product range has expanded from pure pharmaceuticals, and now includes a full range of health and beauty items – over 17,000 items in stock. DB is a one-stop-shop, offering a fast and reliable service to its 900 customers.

Due to DB’s growth, previous software that was purchased to overcome expansion problems soon became obsolete. ”The difficulty was that our business was growing so fast we needed a permanent solution, rather than a series of temporary solutions to this problem,’’ explains Juan Hernandez, General Manager, Drogueria Betances. Purchase and sales contracting, automated warehouse picking, inventory management, product tracking, invoicing and credit control: all of these functions had to be under one roof – and within one totally integrated pharmaceutical distribution solution.

The search for an all-embracing answer to DB’s business problems started. After considering a number of options, the company finally decided that IBS pharmaceutical supply chain software running on the IBM System i platform and DB2 Database was the best fit for its business.

Faster picking with RF

Many significant benefits became immediately available and obvious. A prime example is where the IBS Warehouse Management software has managed warehouse space so efficiently that DB found it was able to consolidate two warehouses into one unit. This move has also meant that fewer employees are needed and the warehouse is more efficient. Another benefit can be found in the stock picking area. In the past, a picking slip was printed out in the warehouse office and taken by an employee who had to find the listed items among the 17,000 available. Now that same employee armed with a Radio Frequency (RF) device has the pick list downloaded to a hand-held unit and can rapidly select the ordered items, each one bar-coded from stock.

An employee can also automatically select the items that have been in stock the longest and, in the case of pharmaceuticals, those with the nearest expiry date - a life-saving necessity. When the selection process is complete, the order details are passed back through the system for dispatch note production and invoicing. ‘’We are very impressed with IBS software because the time taken to pick goods has been significantly reduced in this operation alone and time is money,’’ adds Hernandez.

Integrated e-business software

The picking process is only one component of the integrated package that DB purchased. The wholesaler has also installed IBS NetStore, which is a powerful e-business tool that connects directly to the company’s supply chain and is integrated with the rest of the software. Customers can place inquiries to DB’s stock file from their own desktops and can then place and even track orders directly with the IBS pharmaceutical system. IBS NetStore will accept the order, check the credit worthiness of the customer and pass the order details to the RF device in the warehouse. When the items are dispatched, an invoice is generated and the information is used to form part of the integrated IBS financial system.

In the old days, orders came into DB at a rate of 75/100 per month. “With IBS NetStore in place our order rate has gradually risen to 250 per day – a massive growth rate,’’ explains Hernandez. This is attributed not only to increased efficiency by DB, but because customers are attracted by the online ordering capabilities of IBS NetStore. When DB was using its old software, the company needed ten staff to process orders as well as satisfy the numerous queries from customers. “Because IBS NetStore is so much more efficient we have been able to move eight staff to other departments,” adds Hernandez.

Real value

DB is extremely pleased with its decision to implement IBS pharmaceutical ERP software because the company can see real value in the business. While sales continue to grow, overheads have not increased. "Eight months after the implementation of IBS Enterprise, our sales volume has increased by over two percent,” explains Hernandez. The provision of reliable, statistical information relating to the reordering levels and input of realistic lead-times has enabled DB to reduce inventory levels by ten percent. This reduction has enabled the company to use capital for further expansion. “After installing IBS Enterprise, we expect our return on investment to be realized in less than twenty months,” says Hernandez.

IBS Enterprise pharmaceutical software makes everyone a winner. The end-user receives better service, the supplier improves efficiency and cash flow while increasing profit, and IBS has yet another satisfied customer.

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Company profile

Name: Drogueria Betances

Region: Puerto Rico and the Virgin Islands

Operation: Distribution

Products: Pharmaceuticals, health and beauty products

Employees: 160

Revenue: USD 240 million

Website: Drogueria Betances

Issues

  • Expanding product range
  • Fast-growing business
  • Need to optimize warehouse space
  • Picking time too slow
  • Need to receive more orders through the Internet
  • Order processing over-staffed
  • Need to improve customer service

Solution

  • Integrated pharmaceutical ERP software with modules for
  • Sales order management
  • Procurement
  • Distribution
  • Warehouse management with RF control
  • Inventory control
  • Business intelligence
  • Financials
  • e-Business.

Capabilities

  • Warehouse consolidation
  • Expiry date functionality
  • Supply chain visibility
  • 24/7 online ordering
  • Company-wide performance measurement
  • Paperless warehouse.

Value

  • Significant reduction in the time to pick goods
  • Massive growth with orders over the Internet
  • Able to move eight staff to other departments
  • Sales volume increased by 2%
  • Inventory levels reduced by 10%
  • ROI within 20 months
  • Increased profit.
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