CPL has got the stock under control
SummaryCPL Pharma Lager and Vertrieb GmbH designs and performs tailor-made logistics solutions for the healthcare and pharmaceutical industry throughout Germany and Austria.
CPL Pharma Lager and Vertrieb GmbH designs and performs tailor-made logistics solutions for the healthcare and pharmaceutical industry throughout Germany and Austria.
CPL’s approach to distribution is predominantly based on the principle that a wide range of goods have to meet an extremely high availability – from a fast-moving item to one that is rarely in demand. This is no easy task for the six planners at CPL; goods must be ordered at the right time and in the right quantity. This ordering process must also take into consideration a plethora of item indicators, such as sell-by dates.
Jürgen Spindler, the manager of logistics, purchase and sales at CPL, explains, “Our previous inventory management solution calculated demand based on a transparent display of inventory and historical sales numbers. Our short-term demand was forecast through statistical computing models.”
CPL’s in-house program extracted data from various databases which had been gradually shut down or migrated to other systems. The programming and management was enormous and could only be handled by a few people with specialist knowledge of the system.
“The software we were using to generate long-term demand forecasts and automated planning processes required a great deal of time and effort. We realised that to work more efficiently we needed to modernise our IT infrastructure,” says Spindler.
CPL underwent a changeover of the central warehouse ERP system to a modern database-supported standard solution. This shift helped to lay the foundation for the implementation of complementary inventory management software.
CPL evaluated seven solutions against a catalogue of criteria. After careful consideration the add*ONE Inventory Optimizer software, provided by INFORM, was chosen. CPL was particularly impressed by the graphical display of forecasts, ordering proposals and controlling tools – an extreme contrast to the previous columns of figures the company previously had to contend with.
One of the most important selection criteria to CPL was the ability to create reliable demand forecasts, and subsequently identify structural ruptures, outliers and seasonal fluctuations, as well as promotions. Other important elements of the software included the automatic planning of cheaper, easily predictable goods and the location-independent access of employees via Citrix. CPL’s essential criteria also included item successor arrangements and a flexible allocation of assortment areas or of suppliers to the planners.
The add*ONE software now functions as a superior interface to all ERP systems and data flows in the company. The forecast procedures have been adjusted to the specific requirements of the pharmaceutical market and are consistently providing reliable results to planners. Most importantly, the simulation function is enabling forecasts to be used to provide complex decision support. If a simulation presents positive results, new parameters can be implemented.
Spindler comments, “The simulations are used for decision making not only by our planners, but also by the management team. We use simulations to consider the complete picture and ensure we are adequately prepared for negotiations with business partners as well as supporting the business planning. For instance, if a supplier negotiates an order with a quantity which is logistically more favourable for themselves (such as the carton or pallet size), it is very helpful to simulate the effect on the stock levels and other parameters. On the basis of hard facts it can then be decided if the attainable volume discount is profitable.”
In addition, the add*ONE Inventory Optimizer has significantly decreased the required planning effort. Spindler says, “Previously our planners needed the majority of the working day to order more than 1,000 items. Thanks to the usability and the high quality of data, they can now complete this task within a fraction of that time. We are able to use the additional time for data maintenance and assortment management, which are becoming increasingly important to us. Overall, our responsiveness has improved significantly.”
Every morning the planners receive comprehensive diagrams, which provide an overview of the tasks to be carried out. This helps the planning process by prioritising items for which there is a need for action. Once orders become routine the add*ONE system takes over completely.
The planning has extended into the warehouse, by simplifying the process both at the suppliers and at the in-house receiving area. This simplification includes logistical considerations such as bundling, shipping carton and pallet size and has significantly improved the structure at the receiving area. In addition, if the minimum order quantity is not met due to missing items, the refill function provides the platform for fast ordering completion.
Spindler concludes, “If we had a chance to introduce the software for a second time, we would pay even more attention to the extensive and fundamental training available to optimise the immense possibilities of the standard functions of the application. Experience has also confirmed that despite all possibilities provided by technology, the human commitment cannot be forgotten: experienced employees are indispensable even with excellent system support.”