Distribution managers want neither too much nor too little when it comes to managing the inventory of pharmaceuticals. Margins on drug products can be razor thin. Plus, distributors must comply with numerous state and federal regulations to ensure the safety and security of the supply chain.
Med-Health Pharmaceutical Products, a mid-sized drug wholesaler based in Las Vegas, has been able to ensure the accuracy and efficiency of its warehouse operations by using an automated, barcode-based system in conjunction with SAP’s enterprise resource planning (ERP) software.
The company has strategic alliances with a medical supply distribution company and a pharmaceutical repackaging business. In 2006, it decided to upgrade the existing enterprise software it had been using to run its medical supply business to comply with the FDA regulations its new pharmaceutical business would be required to meet.
Idhasoft, Irvine, Calif., is a systems integration company specializing in SAP implementations. Idhasoft deployed its SAP-qualified Business All-in-One solution for wholesale distribution. This industry-specific, preconfigured solution leverages the power of the SAP ERP application across all of Med-Health’s businesses.
Because Med-Health needed an accurate way to label and track products throughout its warehouse facility, Idhasoft recommended its partner, BCC Distribution Inc. (BCCD, Plymouth, Mich.), install a
barcode tracking system. BCCD deployed TranSAP, a barcode-based inventory scanning system that integrates with the SAP system.
“It’s really a turnkey solution,” says Mark Hames, director of operations for Med-Health. “Nevada is very strict when it comes to regulating the drug wholesale industry, and we wanted to go above and beyond their requirements to ensure we could operate as efficiently as possible, while maintaining full compliance with state requirements. We were able to deploy a fully compliant solution in a very short period of time.”
Jon Newman, CEO of BCCD, says, “People think SAP is a complex, expensive system that only large companies can deploy. Idhasoft offers this pre-configured, industry-specific SAP template for smaller companies, and they are typically up and running very quickly.”
How it Works
The pharmaceutical warehouse is a 28,000-square foot facility with a full-scale racking system. There is a separate, enclosed area in the warehouse to secure all controlled substances, as well as a refrigerated storage area and freezer. Med-Health operates three inbound receiving bays and one outbound shipping bay.
As items are received, they go through a quality-assurance inspection to ensure that the drugs in the shipment are correct and that pedigree records for the material are in place. Med-Health is required by the state to keep records detailing where the pharmaceuticals came from, to whom they were sold and in what quantities.
Once material is received into the SAP system, the system prints carton labels for the merchandise using SATO America GT 412e barcode label printers. The labels include the drug item’s barcode, nomenclature and National Drug Code (NDC) and are used to track goods from receiving through storage and shipment.
Product is then put away in the warehouse until an order is received. Med-Health employees use Motorola MC9090 mobile barcode scanners to pick orders from approximately 1,000 pick locations, using a pick list generated by the SAP ERP system.
SATO printers were selected, in part, because of their two-dimensional barcode printing capabilities and the ease-of-integration with SAP. The FDA may eventually require 2D barcoding on its compliance labels, so Med-Health will be prepared in advance for any future changes in the labeling regulations.
According to Hames, the implementation went smoothly. “The only hurdles we faced were in
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determining what we wanted the system to do, and what information we needed from the barcode scanners,” he says. “The deployment was very smooth, and we completed the project under the timeline that we had planned.”
Hames adds, once you know the barcode is correct, you really can’t make any mistakes. “We’re confident that our orders are correct, and we have full traceability within the warehouse.”