A healthy supply chain helps the medicine go down

Healthcare Logistics is the UK subsidiary of Movianto Group, Europe's foremost provider of logistics and related services to the pharmaceutical industry. The company serves some of the worlds top pharmaceutical manufacturers, including Bayer, Sanofi Aventis and GSK, and by value, delivers over 40 per cent of the UKs medicines.

Healthcare Logistics clients operate in an extremely competitive environment. They face intense pressure to deliver new drugs, and their profit margins are continually being squeezed. These pressures challenge Healthcare Logistics to provide a premium service to a wide range of delivery points, including Hospitals, Wholesalers, Nursing Homes, GPs, Retailers, Pharmacists and Home Patients, at a competitive price. To do so, the company had to create the most advanced third party warehouse ever built solely for healthcare products in the UK.

Purpose-built solution
In early 2001, Healthcare Logistics started work on the creation of an 11,000 m2 warehouse in Bedford (extended in 2004 to 24,000 m2) that would be purpose-built around the needs of the UK pharmaceutical and healthcare industries. In parallel, the company also launched a search for a warehouse management system that could automate the facility upon opening and well into the future.

After an extensive search process, Healthcare Logistics chose Manhattan Associates Warehouse Management for iSeries solution to automate its new distribution centre. The system, operating on IBMs proven and reliable eServer platform, offered the flexibility the company needed to accommodate the multiple operating procedures of its growing list of clients. And even more importantly, it had the ability to manage batch control and track expiration datescritical functionality in the world of life sciences.

Implementing IT
All product movements within the four walls of the warehouse are controlled by the solution, supported by radio-frequency (RF) technology from mobile solutions specialist LXE. Inventory specifications are either pre-received into the system via advance ship notices (ASNs) or entered into the system as goods are physically received at the warehouse.

All goods are inspected for quality upon arrival at the distribution centre and where required, information such as batch number, expiry date, pack size, quantity and number of items is updated in the WMS. All goods-in pallets then receive a bar coded label containing a unique serial number which, when combined with the RF equipment, enables detailed product and batch traceability within the warehouse. The WMS then decides which products are stored where according to a pre-set number of algorithms. Most inbound deliveries are placed into reserve inventory locations.

Picking in the warehouse takes place in five forms: full pallet picking; full case picking; break case picking; chill store picking; and picking of controlled drugs. Most orders however comprise full case and break case picking that takes place on the mezzanine floor levels. This area is laid out in a horseshoe pattern which allows for replenishment to take place from the outside thereby avoiding interruptions to the picking process. For maximum efficiency, faster moving goods are held in double deep pallet live racking and slower moving products are held in carton live racking that allows for cartons to be stocked six deep.

Orders are released to the warehouse for picking in waves according to their priority. Waves can be set up by customer, by warehouse area, by delivery point, or by delivery due date. These waves also provide checks to see if there is sufficient stock to meet the order requirements and where necessary commands replenishment from the reserve locations. All pick operatives are instructed and controlled through radio data terminals.

Orders are picked onto trolleys and as the last carton of an order is packed, a carton wave manifest is printed and the WMS sends an update back to the appropriate host. The orders are delivered to shipping and shipments are then built according to post codes and load volume. All goods are delivered to their destinations using Healthcare Logistics private fleet of 150 plus vehicles.

Taking advantage of new opportunities
For Healthcare Logistics creating the most advanced third party warehouse for healthcare distribution in the UK was not about saving moneyit was about taking advantage of enormous business growth opportunities. When the Bedfordshire location first opened, it serviced one customer; today the facility services more than 65 clients that distribute to more than 35,000 delivery points. This growth and volume could not have been accommodated by Healthcare Logistics former facilities and systems.

Each new client introduces new business requirements for Healthcare Logistics. There are unique host order systems to interface with and distinctive pick, pack and ship specifications to manage. Fortunately, however the solution makes adding a new customer easy. Using third-party middleware, the WMS can interface to virtually any host system and the solutions flexibility enables Healthcare Logistics to accommodate special value-added service requirements for individual customers and orders.

No time to rest
In addition to using the Manhattan Associates solution, Healthcare Logistics recently deployed the companys Performance Management solution to enable closer monitoring of its overall supply chain performance. The measurement and analysis capabilities of Manhattan Associates Performance Management solution will enable Healthcare Logistics to track trends based on key performance indicators (KPIs) and make informed, strategic decisions to optimise its operations.

Healthcare Logistics isnt content to rest with its current success however. To maintain its competitive edge, it will continue to focus on achieving new levels of efficiency. Plans are underway to upgrade to a new version of Manhattan Associates Warehouse Management for iSeries solution at the end of the year and in addition to this upgrade, Healthcare Logistics is also evaluating the benefits Manhattan Associates Labour and Trading Partner Management solutions could offer later down the road.

Healthcare Logistics has spent several years creating this optimal environment for the distribution of healthcare products. Our commitment to our customers' requirements means we will continue to invest in innovative solutions such as those on offer from Manhattan Associates that will help our clients better serve their customers. Simon French, director of business development, Healthcare Logistics.