Nomeco is the preferred pharmaceutical wholesaler for pharmacies, supplier for hospitals, and strategic service partner for the pharmaceutical industry in Denmark. They provide vendor managed inventory services (VMI) for approximately 350 pharmacies across Denmark and the Faero Islands through three distribution centers.
The Challenge: Nomeco Needed Automated and Optimized Pharmaceutical Planning
Nomeco’s legacy replenishment and ERP systems had become difficult to maintain and develop, and their planning tools were unable to integrate with one another. The outdated technology created unnecessary manual steps throughout their process—especially every two weeks when prescription drug prices and pharmacy assortments are updated across their network of pharmacies.
Nomeco’s pharmacy customers have considerable autonomy in deciding assortments, delivery schedules, delivery sizes, and other parameters in order to optimize the operations of each individual pharmacy. With so many unique, constantly shifting variables, forecasting demand and ensuring optimal inventory levels for pharmaceuticals is immensely complex and time-consuming. They needed a modern solution to automate and streamline their processes between distribution centers and pharmacies.
Furthermore, prescription medications generally have unstable supply chains and frequent supplier stock-outs, which means providers must identify appropriate pharmaceutical substitutions to meet their customer demand. Nomeco’s systems were not able to support optimally in these situations, which required their planners to manually identify the ideal replacements for these medications. For such a complex and critical process, they required an AI-driven solution that could quickly identify and order substitutions so they could provide better service to their pharmacy customers.
After an extensive vendor selection process that ended in late 2019, Nomeco decided RELEX was the best platform to provide end-to-end supply chain integration and optimize their forecasting and replenishment processes.
The Results: An Automated, End-to-End Supply Chain
Immediate implementation of the RELEX solution was heavily impacted by the COVID-19 pandemic as Nomeco had to focus their attention on business-critical activities and manage the build-up of national reserve stock during the height of the pandemic. Since implementation, they have been able to significantly reduce manual processes, which also reduced the amount of time—and weekend overtime—spent on VMI-related tasks. As a result, Nomeco operates more pharmacies with fewer VMI consultants.
“With RELEX, we have a future-proof platform that enables us to provide significantly improved customer service through more accurate deliveries, fewer out-of-stock situations, and more insight into the logic behind their deliveries. RELEX’s system helps us support our pharmacy customers with a higher level of service more efficiently,” says Per Hansen, Logistics Director at Nomeco.
Due to the extreme flexibility in parameter settings, not all pharmacies have seen equivalent results. In some cases, pharmacies have deliberately opted to increase inventory levels slightly, while reducing deliveries. In other cases, Nomeco is working with pharmacies to further optimize their setup. Across their pharmacies as a whole, Nomeco sees clear improvements in terms of reduced inventory levels and similar or higher availability, even when facing increased sales quantities.
Finally, through RELEX’s advanced assortment logic, their pharmacy substitution processes are optimized to make fast, data-driven replacement decisions in the event of vendor stock-outs.
“We’ve seen some impressive results with RELEX’s system at our VMI pharmacies, including increasing availability levels, being able to provide relevant replacements in the case of vendor stock-outs, and in many cases reducing stock levels,” says Lone Andreasen, VMI Manager at Nomeco. “Since using RELEX, we’ve seen growth in our market share of serviced pharmacies, which is a tremendous testament to the power of their technology.”