Case studies / Pharma Distribution and Healthcare Supply
Case studyFirst-expiry-first-out picking for a pharmaceutical wholesaler
A pharmaceutical wholesaler with five distribution centres enforced first-expiry-first-out picking, monitored the cold chain continuously and cut expiry write-offs, then proved its traceability in a recall.
Overview
A national pharmaceutical wholesaler in South Africa supplying retail pharmacies, private hospitals and public-sector tenders from five regional distribution centres.
Scale. About 14,000 product lines, of which several hundred need refrigeration, more than 3,000 customer deliveries a day and a substantial share of revenue under institutional tender contracts, delivered as a phased, multi-location programme.
The challenge
Older stock expired unsold. Pickers took whatever was easiest to reach, and new deliveries were often put away in front of older ones. By the time anyone noticed, cartons of medicines were weeks from expiry and could not be sold to pharmacies that required minimum remaining shelf life.
Each distribution centre managed stock rotation, cold-chain checks and write-offs in its own way. Some checked refrigerator temperatures twice a day on paper; others had loggers that nobody downloaded. When a fridge failed overnight, staff could not always say which stock had been affected and for how long.
Tender and institutional pricing added complexity. Public hospitals bought at contract prices that differed by tender and region, and errors in applying them led to disputes and delayed payments. Leadership had no consolidated view of write-offs, cold-chain incidents or tender performance across the centres. Write-offs were absorbed into each centre's results and discussed only at year end, by which time the stock had long gone.
The solution
Every batch is recorded with its expiry date on receipt. Put-away places stock by expiry, and the picking system directs pickers to the batch that expires first, checking scanned batches against the instruction. Stock approaching customer shelf-life limits is flagged for transfer, return to supplier or sale to customers who can use it promptly.
Refrigerators, cold rooms and refrigerated vehicles report temperatures continuously. Excursions raise alerts to the duty pharmacist, and affected batches are quarantined automatically until a quality decision is made. Every refrigerated batch carries a complete temperature history from receipt to delivery.
Tender and institutional prices are held centrally against each contract and applied automatically at order entry. Write-offs require a reason and approval. Shared master data for products, batches, customers and contracts underpins all five centres, and group reporting brings write-offs, cold chain and tender performance together.
The engagement
- Eight months
- Six specialists, with warehouse, quality, commercial and IT leads
- Process mapping, expiry-led stock rotation, cold-chain monitoring, write-off control, tender and institutional pricing, shared master data, pilot and phased rollout.
Integrations
- Hospital and pharmacy ordering systems
- Warehouse, laboratory and supply systems
- Tender and institutional customer portals
- Secure identity and audit logging
How we delivered it
- 01
Map the work with the people who do it
Five weeks
We spent shifts in each distribution centre with receivers, pickers, cold-room staff, quality pharmacists and the tender administration team. With the operations director we agreed the scope and measures: write-offs, cold-chain compliance, recall speed and pricing accuracy.
- 02
Design common processes and integrations
Eleven weeks
Warehouse leads designed one put-away and picking process driven by expiry date and batch. Cold rooms and fridges were fitted with connected sensors feeding one monitoring view. Tender prices moved into a single controlled price list linked to each contract.
- 03
Pilot in one centre
Seven weeks
The Gauteng centre piloted the new processes. It exposed missing expiry dates on older stock records and pick faces too small for expiry-led rotation. Both were fixed, and staff were trained during live shifts.
- 04
Roll out in waves and track results
Eleven weeks
The remaining four centres followed. Leadership reviewed write-offs, temperature excursions and tender disputes each month.
Results
- Expiry write-offs reduced
- Recall tracing completed in under an hour
- Continuous temperature records for all cold-chain stock
- Teams worked from the same data across five centres
Write-offs reduced sharply within the first year as older stock left first and near-expiry batches were spotted in time. Pharmacies receive stock with more remaining shelf life, and complaints about short-dated deliveries have fallen.
The cold chain is now evidenced rather than assumed. When a cold room compressor failed one weekend, the alert reached the duty pharmacist within minutes, stock was moved and the quality team could show exactly what had been affected.
The traceability was tested in a manufacturer recall. The wholesaler identified every customer who had received the affected batches in under an hour and notified them the same morning. Tender pricing disputes have fallen, and teams across all five centres work from the same data.
When the recall notice came in, we had the customer list before the manufacturer had finished its call with us.
What made the difference
The distributor traced affected batches quickly during a recall. A small pilot exposed problems, such as missing expiry dates on older records, while they were cheap to fix.
