Healthy changeover for medical supplier Medeco

Customer Story

In a few months, Medeco changed its company name and profile, its IT infrastructure, and moved to a new location. To its delight, its customers barely noticed.

Company background

Medeco was founded in 1913 as Apotekernes Fællesindkjøp (AF) by Norwegian pharmacists and has a long history in the pharmaceutical industry. Today the company is owned by the Dutch OPG Group and has become Norway's largest wholesaler of medical consumables to pharmacies, hospitals and other health institutions, as well as international first aid organizations.

Medeco procures from approximately 170 suppliers and carries an assortment of 3,500 products ranging from bandages to complete field hospitals. Medeco offers value-added services, such as inventory management and logistics, cost control, product training and protocol to more than 2,500 clients. The company has 70 employees with a turnover of EUR 35.7m.

Patchwork of software

Medeco underwent a series of changes in the 1990s. Norsk Medisinaldepot acquired the company in 1991 and brought with it a complex IT system. Today the company is owned by the OPG Group. That journey left Medeco with a patchwork of software, based on various functional solutions that were linked via a range of interfaces. The different IT systems did not work well together, and were not suitable for the future development of the company.

The majority of Medeco's customers are hospitals and local health authorities. The company has an extensive and fragmented customer matrix, in which a single hospital may constitute in excess of 100 customers. Orders can comprize anything from a packet of syringes to an entire field hospital with up to 250 beds. Medeco must be able to ship and implement the practicalities of an order within 72 hours, anywhere in the world. An average day sees the processing of some 150 orders and the shipping of up 25 tons of healthcare products. Naturally this requires exceptional logistics software.

As an intermediary in the medical supply chain, Medeco is subject to pressure on margins from both suppliers and healthcare institutions. The company needed to combat margin erosion through effective operations in the procurement and sales to markets, and through cost control and logistics. The old, pieced-together IT system was not up to the task and replacement was necessary.

Scalable solution required

When Medeco started shopping around for a new IT solution, it had one specific goal in mind - to reduce the number of integrations between various business systems. Medeco needed a supply chain software solution that spanned logistics, projects, production and financials. The solution not only had to address the company's current needs, but also be easily scalable to meet future demands. In addition, Medeco sought an ASP solution to outsource its IT operations. Four different ERP/ASP providers were extensively evaluated and the decision for IBS' business software, IBS Enterprise, as the company's new IT software solution was taken. IBS was the only company that could provide Medeco with an all-around business solution at a competitive price.

IBS Enterprise consists of components for supply chain automation, warehouse and inventory management, logistics and sales-call planning, customer relationship management, finance management, business intelligence and e-business.

Speedy implementation

Within four months of the contract being signed, Medeco was live with its new IBS supply chain solution. A speedy implementation was possible thanks to a positive attitude and the good collaboration between Medeco, the ASP provider and IBS. The conversion from the old, pieced-together IT system was achieved with no business disruptions.

Phase II of the implementation saw Medeco utilizing IBS Enterprise Sales and Marketing Support to handle customer relationship management.

Medeco and IBS have recently completed the final phase of implementation, IBS NetStore. This allows the company to exploit the full potential of the Internet by directly connecting customers and the sales force to the backoffice system, 24/7.

All of Medeco's business processes are integrated within the same system and it is set to face future challenges, secure in the knowledge that its IT systems are up to the task.

Benefits and value

By installing and using IBS software, Medeco said goodbye to the labyrinth of legacy IT systems, which had insufficient communication and integration capabilities. Given the company's complex conglomeration of suppliers and customers, products and projects, they needed an integrated system that could provide an overview of the entire Medeco operation. The IBS Enterprise supply chain software solution has strengthened the company and made life easier for its customers.

The software's integrated tools for business analysis and control help customers maximize profits and focus on critical success factors. The solution keeps track of and presents a range of information from KPI (Key Performance Indicators), ROI (Return on Investment), business partner performance overviews, competitiveness analysis and efficiency control data.

The Norwegian organisation for Logistics and Material Administration, LOGMA, recently honoured Medeco with the 2003 Logistikkprisen - an award for logistics excellence. Medeco was chosen for achieving a corporate reconstruction, including new corporate name, new office and warehouse building, and a new fully integrated IT system - all according to plan and under budget!

Medeco regards the new IBS solution as an investment for the future. There is no doubt that the company has accomplished considerable monetary and time savings by moving from a complicated IT structure to a modern and integrated SCM system combined with an ASP solution. 

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