Neuca uses the Omecon &UP® platform to optimise delivery routes to thousands of pharmacies across Poland

From left: Natalia Pączkowska, Supply Chain Support Co-ordinator; Rafał Szydłowski, Director of Supply Chain Infrastructure; Marta Nadulska, Supply Chain Support Specialist at Neuca.

What was the aim of implementing the Omecon &UP® platform at Neuca? What are the specific characteristics of the market in which your company operates?

Every day, more than 600 vehicles leave our warehouses for pharmacies and other customers in the morning, followed by nearly 500 more in the afternoon. We carry out up to 12,000 deliveries in the morning and over 5,000 in the afternoon and evening. We often deliver medicines to a single location twice a day. We needed a tool that would allow us to manage such a large volume of deliveries and our fleet of vehicles as efficiently as possible, in terms of both time and cost.

At the same time, the new platform helps us meet our customers’ expectations regarding service quality. A key feature of the sector in which we operate is that pharmacies require deliveries at specific times. However, the delivery windows are very short, typically lasting just a few minutes.

We have agreed on relatively fixed delivery schedules with our customers. Some pharmacies expect our van to arrive with the goods before they open. This ensures that the ordered medicines are entered into the pharmacy’s system and on the shelves before the first customer arrives.

As pharmacy customers, we have become accustomed to the fact that if a particular medicine is not in stock, it will be available that same afternoon or the following morning. Such a rapid response by pharmacies to patients’ needs is only possible because pharmaceutical wholesalers – such as Neuca – can provide such a high standard of service.

We are able to provide up to two deliveries every day. Exceptions may include very small pharmacies or those located in towns and villages far from the main roads.

How do you manage to meet the pharmacies’ exacting expectations?

Optimising transport costs, on the one hand, and guaranteeing customers the delivery times they specify, on the other, are matters that are very difficult to reconcile. In an ideal world, we’d need almost as many vehicles as we have customers, or customers would have to agree to delivery time slots of any length. These are contradictions.

So we have to make the impossible possible. And that is what the Omecon &UP® platform is for. Thanks to it, we can plan routes sensibly and carry out deliveries in line with expectations. This is particularly important because the pharmaceutical wholesaling market is highly competitive. There are several large players operating in it.

We face competition on a daily basis, and any deviation from the delivery parameters agreed with the customer is quickly criticised by them. Should another problem arise, the customer might stop placing orders with our wholesaler.

You mentioned that you have been using a tool to support the planning and optimisation of delivery routes for a long time. What led you to migrate to the Omecon &UP® platform two years ago?

As recently as seven years ago, we were planning our routes manually. It was a tedious and time-consuming process. What’s more, it required the involvement of a large number of people. After switching to an IT tool to support this process, we saw a dramatic optimisation of costs and an improvement in the quality of our services. I cannot imagine us doing this manually again.

The decision to choose the Omecon &UP® platform two years ago was driven primarily by the improvement in workplace ergonomics. The previous tool required a significant amount of work on our part to prepare the input data. Furthermore, even minor inaccuracies in the tables used in that solution could affect the quality of the generated results — sometimes the results produced did not fully support the driver route planning process. The interface itself was not entirely intuitive, and using the tool required additional knowledge and experience. There was also a lack of mechanisms that would clearly support the user in their day-to-day work. As a result, carrying out the individual stages was more time-consuming and required additional verification, which prolonged the entire planning process and hindered its smooth execution.

What benefits did you gain from implementing the Omecon platform?

The most important benefit was that the new solution made our work much easier. It didn’t require as much attention, precision or time spent on data preparation from us. The process was reduced from half a day to just over ten minutes. The system simply doesn’t allow incorrect information to be entered.

The Omecon platform is also much more intuitive. It’s simply a pleasure to work with. Of course, it also meets all our other expectations. Firstly, it guarantees delivery at a specified time. Secondly, it allows us to optimise transport costs.

It is important to bear in mind that Neuca operates in a market where profit margins are regulated by law. So, on the one hand, we must ensure a high level of customer satisfaction, whilst on the other, we must keep costs under control.

Besides, the migration process itself was straightforward. After implementing Omecon &UP®, we were trained in its functionality and started using it straight away. Initially, with support from our new partner.

What does data preparation and working with the Omecon &UP® system look like now?

Every day, minor changes are made in the new system, relating to the addition or removal of a recipient from a given route. Occasionally, the delivery ‘time slot’ changes. From time to time, we make more significant changes when these minor adjustments have accumulated to such an extent that a larger correction is required, sometimes affecting several routes in a given region.

Major changes are also introduced when a new transhipment centre is established within our network, or when the address of an existing one changes. These transhipment centres allow us to optimise deliveries to pharmacies. For example, goods ordered from the warehouse in Katowice are transported by lorry to the transhipment centre in Nowy Sącz. From there, several smaller vehicles distribute the goods to end customers in that area. This results in significant savings – as much as around 1,000 km per month on this single route alone.

We also make a major change to the Omecon &UP® system when a new chain comprising many pharmacies becomes our client. We then have to ‘recalculate’ all the routes in the region from scratch. We are presented with several options. Ultimately, however, it is our staff member who selects the best one.

How many people were involved in route planning before the dedicated IT tool was implemented?

There was no dedicated team at the time. Each regional transport manager would sit down with the drivers and sales representatives to plan their routes. It would be difficult to quantify the amount of work this entailed.

When we implemented our first route optimisation system, the team responsible for this area consisted of five people. In the first phase, we began planning routes across the whole of Poland. We then moved down to the level of provinces and regions served by our 16 warehouses and 26 transhipment centres. This process took around half a year.

Following the migration to the Omecon &UP® platform, this team was reduced further. This is because the new tool is much simpler and less time-consuming to use.

What criteria do you use when selecting one of the several routes proposed by the platform?

We check to what extent they meet the constraints we have set – the time slots imposed by the pharmacies – and assess the transport costs. For example, in one option we meet customers’ expectations to within 30 minutes, whilst in another it is 15 minutes. In the next step, we compare how this difference affects the transport cost.

If it’s cheaper and better, the choice is obvious. Otherwise, we have to analyse each case individually. Meanwhile, there may be over 30 customers on a single route.

Another important criterion is, of course, the restriction on drivers’ working hours. This – just like fuel costs – must also be taken into account by the Omecon &UP® platform.

Do drivers receive data directly from the Omecon &UP® system?

No. We only send the so-called ‘route’ – the itinerary for the day – to their mobile devices. It shows the order in which they are to arrive at each pharmacy, and at what time. The same device allows them to scan documents and parcels collected from the warehouse, and then again when they arrive at the pharmacy.

Apart from the aforementioned ‘delivery windows’, are there any other specific aspects of operating in the pharmaceutical market that need to be taken into account when planning routes?

As well as regular customers, we also have clients who buy from us only occasionally – their unpredictable appearance on any given day can be a challenge.

We certainly have to take into account the fact that the entrance to the pharmacy through which deliveries are made is not always at the address shown on the map. Often, we have to approach from a different street or take a different route, depending on the time of delivery. The addresses of collection points also differ from the registered addresses of specific companies. Shopping centres are a typical example. We must take all this information into account in the &UP® route planning and optimisation system.