Pharmacity has been the pioneer in Vietnam’s retail pharmacy industry since 2011, establishing the first and largest modern pharmacy chain and brand in the country. In 2021, Pharmacity selected RELEX to update and improve inventory management and forecasting and replenishment for their more than 1000 stores and two distribution centers.
David Young, Pharmacity’s Deputy CEO, shares why they selected RELEX to help them on their supply chain transformation journey and the benefits they’ve seen so far.
Video transcript
David Young: Hello. My name is David Young. I’m the Deputy CEO for Pharmacity, which is a chain of 1100 pharmacies in Vietnam. As a result of our rapid growth, it was very clear that our relatively antiquated min/max methodology of distributing products to stores was not in any way able to keep up with the growth of the business – in particular, the complexities we have around medicine and a very large SKU range in the stores themselves.
RELEX was a relatively simple choice for us in the end. RELEX has got some very relevant experience in the space of pharma, and the company had actually established itself purely to focus on the use of artificial intelligence and forecasting for retail. And I guess the true reason for our choice was that we were able to see a number of the success cases that RELEX was able to introduce us to that identified similar KPI requirements and overall wanted to make sure that the customer outcome of this was improved on-shelf availability of product.
We started with our biggest problem area, which was medicine, and we started at a store-level basis for implementation, which was in line with RELEX’s recommendation. So, we started with a fairly large pilot group of stores, which was about 47 stores, and quite high-volume stores for us.
And in that pilot, we were able to prove that we had reduced by half the inventory in those stores – and this is in medicine only. And we had increased like-for-like sales in those stores by 10% higher than the chain average. So, we were really, really pleased that we saw a significant reduction in inventory, improved on-shelf availability and obviously have successfully now rolled out all of the medicine categories and all of the DCs. And our next steps are to just roll out as quickly as we can for our other FMCG and vitamins and minerals supplement categories.
Yeah. So, I think it truly has been a partnership model that we’ve ended up with RELEX. And as I say, that partnering model has never felt like it was an engagement of a software provider. It was actually a partner to help improve the business operations and supply chain performance for Pharmacity.
So, I think this is a bit of a scary journey when people start on this process, and it’s a big undertaking and an important part of any retail business. Because it’s not about the supply chain, it’s about a whole business change process.
I can certainly attest to the fact that the process has worked very well and that we’re very pleased that RELEX was the partner that we chose.
