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Accenture worked with a leading retail pharmacy company to successfully transform its enterprise system and drive high performance with a simplified and agile supply chain.
A leading retail pharmacy company in Latin America was struggling with inflexible information and supply chain management systems that could not be adapted to changing market challenges, consumer needs and business requirements. To support its growth strategy, the company needed a new enterprise-wide systems platform that would:
Integrate its supply-chain management.
Increase analytical capabilities to process the growing amount of transactional data and understand the inventory behavior emanating from the expanding number of warehouses and stores.
Enable the company to operate in a multicurrency environment.
The company turned to Accenture because of our deep experience in successful company-wide transformation efforts and systems implementation.
Accenture helped the company develop a detailed supply-chain transformation plan that resulted in identifying more than 30 business and technology initiatives. This plan included two “quick wins” that were immediately implemented and successfully incorporated into the client's commercial processes:
Pricing optimization: This helped the company optimize pricing and promotions through decision making based on profitability objectives, customer elasticity and competitive analysis.
Fact-based negotiation: This let the company negotiate more effectively with suppliers by providing a complete and structured view of purchase data.
Accenture and the retail pharmacy company collaborated to select and implement a new enterprise system platform, and chose Oracle Retail based on the platform’s functional fit and scalability that would support business growth. They also created a three-phase implementation plan customized to address each of the critical areas that needed change.
The enterprise transformation has generated marked improvements, including more efficient monthly closing for centralized financial reporting, streamlined warehousing and accurate transactional data and inventory tracking. These include:
The ratio of product available to product distributed (the fill rate) has improved from 80 percent to nearly 99 percent. Consumers benefit as they can locate products more easily, while the retailer gains substantially by generating more sales with less surplus stock.
The quick wins also generated tangible improvements. The price optimization initiative has increased gross margin by one to two basis points and price image by three to four basis points. The fact-based negotiations initiative has reduced the cost of goods by approximately four to six basis points on average for the pilot supplier. These new processes support negotiations and strengthen relationships with other vendors.
With its new supply chain structure and enterprise platform, the retail pharmacy company has the capabilities to continue its journey toward high performance.
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