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"RX FOR HEALTHY DISTRIBUTION"
Any business that involves inter-industry movement of products is squeezing operating costs by enhancing supply chain efficiencies these days, but not every industry faces the safety and regulatory considerations specific to the warehousing and distribution of drugs. The U.S. Food and Drug Administration maintains strict regulation of specialized storage locations for products that require freezing or refrigeration, as well as secure areas for hazardous materials and controlled substances. FDA regulations also govern storage by lot; mixed lots, for example, cannot be stored in the same location. Ideally, multiple lots of the same SKU are picked in FIFO (first in, first out) order. Also, order fulfillment may break down to the level of unit dose, individual products or packs, and all the way up to full cases and bulk pallets. The diversity of storage areas means multiple pick sites, which present logistical complexities of the first order. Because of the industry's need for strict accountability, AIDC-based WMSs that track receiving, putaway, pick, pack, replenishment, shipping, inventory, storage management, and validation are a growing necessity for manufacturers and wholesale pharmaceuticals distributors. WHY ACCURACY IS A LIFE-AND-DEATH ISSUE "Order verification is the most important piece for pharmaceuticals operations because of the critical need for lot control," emphasized John Dalton, president of ScanData Systems. ScanData, a Dublin Ohio-based WMS provider, has automated four distribution centers for Caremark and Amerisource, as well as distribution operations in other sectors. "The FDA also requires extensive documentation linking prescription drugs to orders. Absolutely accurate distribution control of pharmaceuticals is the most critical of any WMS sector: it's a life and death issue unlike retail or other markets where, for example, customers don't die because they got the wrong colored shirt." Lots are traced chiefly through barcoded product, lot, and date numbers; and these identify the product as well as packs, cases, shipping containers, and/or pallets. Barcodes are scanned at every move from manufacturing to receiving and into putaway locations, which include specialized areas for refrigerated or controlled drugs. From putaway, cartons or pallets move on and are broken down for repackaging as prescriptions or for picking and packing smaller orders. Microsoft's Windows NT operating system--working in conjunction with its SQL Server relational database--provides the foundation for ScanData RF-based WMS applications, which are full-featured, flexible, and easily modifiable, said Mr. Dalton. ScanData's products generally reside on an NT server (networked to the corporate host) or, more recently, on Compaq's newest cluster technology, involving multiple servers for larger distribution environments. Multiple servers add redundancy as well as load sharing, because transactions can move from server to server for processing, depending on demand. "We have a standard WMS relational database. Specialized templates for industries like pharmaceuticals provide solutions for specific industry applications," Mr. Dalton noted. "The flexibility of this approach further enables the evolution of additional standard features to respond to changing customer requirements, without changing the basic system." RX FOR MISPICKS One ScanData system user is Amerisource Corp., the fourth largest wholesale pharmaceuticals distributor in the country, with 21 U.S. warehousing and distribution sites. Amerisource's 126,000-square-foot Columbus Ohio facility contracted ScanData to implement a barcode-based order verification system in 1992. "We were having a problem with picking errors caused by increasing business," said Jack Miller, warehousing manager for Amerisource's distribution center in Columbus. "We'd consolidated a site in Virginia, and that, combined with substantial corporate growth, increased order throughput. We'd developed a piecework-like incentive for our pickers, resulting in more mispicks. We were getting accuracy rates in the 91 to 93 percent range. Amerisource was already running warehouse management software on its host AS/400. The company integrated the barcode-based ScanData order verification application on a networked NT server. Each pick was scanned as it was put into the shipping box, which ultimately improved the order accuracy rate to 99.6 percent. "Since then, we've upgraded several times, adding case verification and then EDI two years ago," Mr. Miller said. "We're sending ASNs to our larger stores. Order accuracy was the entire issue that drove the technology for us. These technologies are the trend. Some of our customers--hospitals for example--are demanding 100 percent order accuracy." "Mr. Miller added that other planned improvements include putting barcode scanning via RF into receiving and putaway and, at the corporate level, implementation of ERP by mid-to-late fiscal 1999.
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