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Kronans Apotek Reduces Inventory Levels While Increasing Service Levels

Kronans Apotek centralizes and automates their supply chain to all pharmacies in order to reduce inventory levels, increase service levels and frees up time for the staff to spend with customers.

Challenging availability and inventory optimization

With over 300 pharmacies, Kronans Apotek is the third largest pharmacy chain in Sweden. The pharmacies are geographically spread across the country, from north to south. Every location has 3000-4000 pharmaceuticals and 500-4000 beauty care, supplements and other items in stock. Kronans Apotek has approximately 25 000 items in total and around 4 million location/SKU combinations. The customers value the right product range; at the same time, it is also time consuming and challenging for the pharmacy staff to plan the correct assortment and availability, resulting in high inventory levels.

“Several elements contributed to us taking a closer look at inventory optimization in our pharmacies. We had high inventory levels and a desire to decrease these by 15 percent. We also wanted to implement a solution that would allow time for our pharmacy staff to spend on service and advice to our customers, rather than manual work on forecasts and inventory availability. Another goal was to increase service levels by 1.5 percentage points to achieve having the right pharmaceuticals in stock for visiting customers,” says Tina Jalap, Supply Chain Manager at Kronans Apotek.

Time consuming work without results

Each pharmacy used to have a designated inventory manager who was responsible for manually setting order parameters for each item; a time consuming job that never led to optimal inventory levels. With the objective to reduce inventory, increase service, and release time for the staff to spend with customers, Kronans Apotek made the decision to centralize all product sourcing. The central organization then needed a suitable application to support forecasting and inventory optimization. After a thorough evaluation of alternatives, Kronans Apotek chose Optilon’s solution based on SO99+ Service Optimizer 99+) from ToolsGroup, with support from consultants at Optilon.
“We chose Optilon’s inventory optimization since they work from the customer’s requirements, while being a developer independent solution provider. In addition the consultants from Optilon supported the organization throughout the whole implementation process,” says Jalap.

Industry-specific solution providing results

A key driver for the selection and implementation of a new solution was to drive automation of the supply chain process as far as possible. As a result, Kronans Apotek calculates optimal replenishment and inventory parameters for the total product range in all of the pharmacies on a daily basis, in an automated process. Inventory parameters are based on a forecast that automatically considers seasonality, marketing campaigns and planograms (store and shelf layout).Industry-specific considerations like “product of the season” (a government mandated practice for pharmacies in Sweden), is also catered for. The result of all of this is that product replenishment is now fully centralized, and is the responsibility of two people in Kronans’ organization. All in all, Kronans Apotek has transformed their organization and planning process from push oriented to one that is truly demand-driven.says Jalap.

The automated inventory optimization solution also helps Kronans Apotek plan for national campaigns over the year, such as the summer or allergy season. Staff at the local pharmacies used to be responsible for ordering the right amount of seasonal or campaign items, today this process is also automated. This frees up time for the pharmacists to provide valuable advice and service to customers.

About Kronans Apotek

Kronans Droghandel Apotek AB is a pharmacy for the modern customer that keeps up with the times. It is the third largest pharmacy chain in Sweden with over 300 pharmacies from Trelleborg in the south to Malmberget in the north and approximately 2500 employees. The pharmacy chain is characterized by a welcoming customer service and an attractive product range.

About Optilon

Optilon creates business value for companies in manufacturing, e-commerce, wholesale, and retail through independent application based solutions for planning and optimization of supply chains. The consultants are specialists in their field and work within three main areas: Supply Chain Design, Service Optimization, and Supply Chain Planning. Optilon is a Nordic company founded in Sweden in 2005, with offices in Seden, Finland and Denmark.

About ToolsGroup and SO99+

ToolsGroup works with demand driven planning processes. Their software SO99+ analyzes demand history to create the best possible forecasts. ToolsGroup’s solutions support areas such as demand planning, sales and operations planning, campaign management, replenishment and inventory optimization. Their “Powerfully Simple” philosophy means that the software supports highly intelligent decision making while still being easy to use.

Do you want to know more about Optilon's retail approach?

Kontakt gerne Daniel Göransson på +46 70 937 92 88 eller daniel.goransson@optilon.se

Daniel Göransson