CVS Implements Descartes Software for Purchase Order Management
CVS is America’s #1 pharmacy, dispensing more retail prescriptions in more stores than any other chain. With annual revenues of more than $22 billion, CVS has created innovative approaches to serve the healthcare needs of its customers.
Challenge: Software to Better Manage Purchase Orders
To better manage hundreds of thousands of deliveries from approximately 22,000 origin points annually, CVS/ pharmacy has a goal to improve inbound supply chain visibility by automating connections with hundreds of suppliers and carriers. CVS needs up-to-the-minute answers to critical questions such as:
- Has the purchase order been confirmed?
- What is the shipment status?
- What is the carrier’s estimated time of arrival?
Solution: Descartes Visibility and Event Management Software
CVS selected Descartes as a technology partner after a third-party ROI study projected an estimated potential reduction in inventory of up to 17% over a 12-month period following enterprise-wide implementation of Descartes Visibility and Event Management solution. However, CVS only required a one-day inventory reduction to build a business case for the software.
CVS realized that a global visibility solution could not be achieved using its existing enterprise resource planning (ERP), warehouse or transportation management systems (TMS).
CVS plans to integrate all of its top 50 suppliers and applicable carriers, then expand the implementation to include 80-90% of all inbound volume. According to Ron Link, Senior Vice President of Supply Chain and Logistics for CVS/pharmacy,
“We anticipate significant payback through network cost savings and business process improvements. These enhancements and savings will only grow as we continue to optimize our new inbound process.”
Results: Proactively Manage Supply Chain Events
By monitoring inventory movement and receiving automatic alerts, CVS will be able to proactively manage supply chain events and prevent order failures. The resulting reduction in safety stock and order cycle times, along with improvements in logistics execution, will ultimately lead to improved logistics execution and overall profitability.