Increased accuracy in the Pharmaceutical industry

Parlogis handles approximately 14.000 active articles from 500 suppliers of medicine, healthcare products, research material, chemicals, vitamin, cosmetics, and consumer goods in a 4000 m2 warehouse.

Founded
2005

The Challenge

  • Too high inventory levels
  • Many resources involved in manual work related to replenishment
  • Replenish the stock according to sales fluctuations

The result

  • Simulation created to demonstrate potential advantages
  • Reduced Inventory levels without reducing sales
  • Workflows disciplined and coordinated
  • Best fit forecasting to catch seasonal trends in sales history

“We were surprised by the results from the simulation. As Parlogis is a logistics service company, we considered ourselves to be experts in stock control. However the simulation proved that there was room for improvements, both with regards to inventory level and reduction in stock-outs.”

Geir Gunnlaugsson, Manger Logistics Services, Parlogis

Parlogis is a leading logistic service provider for the Icelandic healthcare- and research sector. The company offers a wide range of logistic services such as stock management, procurement, import, custom clearance, storage, labelling, order taking, picking, distribution, invoicing, and collections. Parlogis offers daily distribution to pharmacies, hospitals, healthcare centres, supermarkets, laboratories, specialists and other buyers. Total number of buyers is around 2.000 a year and the number of orders a day is around 450. Parlogis has an experienced and specialised work force of 57 employees that can manage a high portion of the supply-chain and the extensive flow of information, goods, and money.

Parlogis is handling approximately 14.000 active articles from 500 suppliers of medicine, healthcare products, research material, chemicals, vitamin, cosmetics, and consumer goods in a 4000 m2 well equipped warehouse in Reykjavik. Managing such a large number of articles was becoming challenging and stock levels were constantly growing in order to service commitments.

Parlogis uses Dynamics AX as their ERP system. Although rich in functionality the requirement from Parlogis was to implement a tried and tested, best practice solution in the field of demand planning and replenishment. “After reviewing several options, we decided to do a simulation exercise with AGR allowing us to explore two major advantages; how the system would perform in real life situation and to calculate the potential ROI from implementing the solution.” Says Geir Gunnlaugsson, Logistics Services Manager.

“We were quite surprised by the results from the simulation. As Parlogis is a logistic service company, we considered ourselves to be experts in stock control. However, the simulation proved that there was room for improvements both with regards to inventory level and reduction in stock–outs. After viewing the simulation results, we were certain that we needed to buy this solution.” Geir continues. “We have now been working with AGR for over two years and since the beginning we have even exceeded initial estimates by further tuning the AGR solution to our specific business needs.