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McKesson Develops a Healthier Distribution System With SAP HANA

McKesson is the largest pharmaceutical distributor in North America, delivering 200,000
orders a day—one-third of all medications used in North America. Many of our wholesale
and pharmacy customers employ “just-in-time” ordering, expecting delivery by
the next business day. With most customer agreements containing a “fill or
kill” clause, we need a nearly flawless distribution system to keep customers from
taking their business elsewhere.

As important as serving our direct customers is, the mantra at McKesson Pharmaceutical
Distribution is “It’s not a package, it’s a patient.” So, we do everything
possible to reliably deliver the prescription medications that millions of
people rely on to control illness and improve their lives.

We have distribution centers (DC) across the country with a massive central DC playing
a crucial role in supplying the regional DCs. To process an order from receipt
to shipment at the central DC, the workflow includes multiple zones—or stages—
each with its own systems and reporting tools. Unfortunately, the various
systems did not integrate easily and often showed conflicting information.
Without a consolidated and accurate view of the orders processed each day, we
weren’t able to easily identify and intervene on orders that were in danger of
not shipping on time.

Gaining accurate, real-time insight throughout our distribution processes became a top
priority. SAP HANA had the power and agility we needed, so we deployed SAP HANA
as a “sidecar” datamart. We populated it with 1TB of data from non-SAP systems,
cleansed and replicated through SAP Data Services. Then we worked with Infosys
to build a custom application and dashboard with a BusinessObjects WEBI
front-end, which provided an easy-to-use tool for identifying potential
problems. It took just four months to go live, and the impact was felt immediately.

The new dashboard highlights trouble loads, providing the view we need to immediately identify orders in danger of
missing the same-day shipping window. Actionable information is now just one click
away, versus the seven steps it used to require. And data is replicated into
SAP HANA every five minutes, so we’re always looking at real-time views of our
distribution system.

Since deploying SAP HANA at the central DC, we’re saving three-to-four hours a day researching and reporting hotspots.
And the average ship time has dropped over 35%, from two days down to one and a
quarter. With our new-found insight, we can now be more proactive in managing
our distribution and ensuring that the medications North America needs arrive
on time.

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      Author's profile photo Rukhshaan Omar
      Rukhshaan Omar

      Vote for McKesson's HANA Innovation Award entry on McKesson Develops a Healthier Distribution System With SAP HANA : View Idea