Natali Pharm Success Story: Receive On the Same Day of the Order

Successfully implemented in 2010, the project for upgrading a pharmaceutics warehouse located in Yerevan, Armenia, was based on Solvo.WMS, a complex automation solution provided by SOLVO, the Russian leading provider of high-end systems for real-time logistics management and automation at warehouses and container terminals. The Solvo.WMS warehouse management system has been widely used in the pharmaceutical industry to automate technology processes, significantly improve performance and efficiently control safety stocks of medical drugs and supplies. Of prime importance is the ability of Solvo.WMS to optimize warehouse operations so as to strictly meet expiration dates and storage requirements for drugs, and to quickly assemble and deliver orders made by pharmacies and hospitals. Combined with the Schaefer A-Frame high-performance order-assembly automation conveyor, the solution ideally meets the needs of a modern pharmaceutical company.

Warehouse Specifications

• Storage Area: 2000 sq. m
• Storage Types: Pallet, Box, and Piece
• Number of Storage Units: 6 thousand SKUs
• Orders per Day: 500 (up to 15000 lines)
• Usage of Equipment and Machinery:
o Schaefer Conveyor Line, and A-Frame Automated System
o Gravitation and Shelf Racks
• Solvo.WMS Document Management System
• Radio Equipment:
o Datalogic Skorpio Devices
o Motorola Equipment for Radio Infrastructure Network

Project Goals

• Achieve maximum personnel performance and warehouse operation efficiency
• Speed up the assembly of drug supply orders
• Minimize errors in the order assembly process

Headquartered in Yerevan, Armenia, Natali Pharm is the largest Armenian supplier of pharmaceutical products, medical goods, baby food, medical equipment and other products for clinics and hospitals. Natali Pharm is an authorized distributor of more than 40 world-renowned manufacturers of high-quality drugs, including Unipharm. Inc., Servier, Novartis Pharma, Fresh Up, Nycomed, Roche, Krewel Meuselbach, Hipp, Nike, NizhPharm, KievMedPreparat, etc. Natali Pharm's own distribution network includes over 30 drugstores. Having a large customer base, Natali Pharm is the supplier for most of the medical institutions in Armenia.

Natali Pharm's warehouse complex, located in Yerevan, is a standalone two-story building that is used for storage, assembly, and the shipping of orders. Natali Pharm decided to upgrade and automate this warehouse in order to improve its performance, optimize technology processes, ensure efficient management of medical drug stocks, and reduce the load placed on order servicing and drug shipment. An evaluation study revealed that the warehouse was operating in a fairly inefficient way. For example, it utilized only a part of the building—the first floor of the two-storied building—while the storage room was rather limited, resulting in an acute shortage of space. No piece-picking zone was available. Insufficient lighting hindered handling operations and resulted in errors. The warehouse's topology made it impossible to seamlessly utilize machinery equipment in loading/unloading operations. Therefore, to automate logistic processes at the warehouse, the outdated warehouse needed to be comprehensively modernized. For example, it was necessary to expand the storage space, to separate the piece-picking zone from the box and pallet zones, to speed up the rate of goods handling, and to optimize the order assembly process in order to free up more space.

In terms of the new warehouse's efficiency, Natali Pharm's main requirement was to achieve maximum accuracy and performance in receiving, storing, picking, assembling and delivering a large number of retail and wholesale orders for the entire range of offered products. It should be noted that Natali Pharm's customer base is quite large, which includes not only its own drugstore network, but also many other third-party health care institutions and enterprises (both commercial and patient caring). So the main objective of this improvement project was to develop the level of customer service that could hold true to the motto "receive on the same day of the order."

A few different contractors took part in the project. Lubandy Logistic Services provided consulting services and developed the design of the entire project for the required logistics scheme and equipment. In result, Lubandy awarded the tender to SSI Schaefer PEEM to supply the required warehouse equipment. To renovate the warehouse, the following upgrades were suggested: to repair the building, to carry out floor pouring, to prepare the second floor of the building for exploitation, as well as to equip the warehouse with the following technology: a conveyor line, the Schaefer A-Frame automation unit, and different types of cargo loading devices, such as gravity-flow, pallet, and shelf racks, tote boxes, etc.

To choose the best warehouse management system, Natali Pharm announced a tender for the implementation of an integrated automation solution for the warehouse. SOLVO took part in this competition and was awarded the contract. The key advantage that enabled SOLVO to win the tender consisted of the extensive experience in implementing labor-intensive, large-scale projects for introducing management systems and integrating different types of equipment at warehouses. For example, SOLVO had previous experience integrating Schaefer equipment in several projects in Russia and Ukraine. In addition, SOLVO had gained vast experience in working with pharmaceutical industry companies, such as Donbass Pharmacy Company, Rossib Pharmacy, ROSTA Pharmaceutic Group, Biotek Group, Falbi, etc.

In 2010, Natali Pharm and SOLVO signed a contract for the deployment of the Solvo.WMS automation system. Solvo.WMS is a comprehensive real-time solution designed to automate warehouses of any complexity. Solvo.WMS is installed quickly and is an easily customizable system that is primarily aimed at improving the efficiency of warehouse operations and enhancing the performance of warehouse staff and equipment.

In a span of six months, a design project was developed, the solution was fully customized to the customer's demands (including integration with conveyor equipment) and Solvo.WMS was deployed. The final phase—deployment—was most critical and took two and a half months, including the launch of the system into operation in tandem with the entire line-up of warehouse equipment. Prior to starting work, two deployment concepts were considered: incremental and complex. The client decided to carry out comprehensive modernization of their warehouse using just the complex approach, despite the fact that this choice entailed additional costs due to a mandatory two-day warehouse shut down in order to perform a large amount of preparatory works. Before deploying the system, ABC analysis was carried out to categorize goods and cargo circulating in the warehouse. Additionally, to achieve highest level of efficiency, stock inventory tallying was performed at the same time as goods were physically moved from the box and pallet pickup zone located on the first floor to the piece pickup zone located on the second floor. To ensure intersystem integration, SOLVO implemented and introduced software gateways to the Schaefer conveyor system and Schaefer A-Frame order compilation system, as well as to the 1С ERP. In addition, a coordinated plan for remote intersystem testing was agreed upon between all vendors, including different types of tests, such as load, bandwidth, order simulation, technology processes, etc. This preparatory phase continued for two weeks. 

Schaefer A-Frame is a fully automatic picking system, which fits ideally with the pharmaceutical industry's needs. This technology can commission multiple personalized orders based on a wide range of medical supply categories. The most important advantage of the A-Frame is its high level of performance, which is sure to guarantee that drug orders can be delivered to buyers and patients within the shortest possible time i.e., in the same day or even within a few hours. As a result, the technology benefits the clients by removing the need for a hospital or drugstore to locally stock medical supplies, which frequently have limited expiration dates and require specific temperatures and other storage conditions that not every retail and medical institution can accommodate. The performance of Schaefer A-Frame can reach a processing speed of more than 7,000 items per hour and 23 orders per minute. 

After the initial installation process of Solvo.WMS was completed, the next phase was to carry out the deployment of warehouse equipment, as well as the testing of Solvo.WMS installation and the intersystem gateways. This phase required three months, lasting from July to September 2010, and finally led to the launch of the entire system for commercial operation. 

In addition, SOLVO specialists provided consulting services and performed testing of the integration between all hardware systems. They also conducted an analysis of the Motorola-based radio network, covering a number of Datalogic Skorpio radio devices, and prepared recommendations for optimizing its configuration. 

At the final phase of the project, SOLVO held a training seminar, which enabled warehouse workers, operators and managers to quickly learn how to use the system with maximum efficiency and with minimum costs and effort. In this way, the project for comprehensive automation of Natali Pharm's pharmaceutical warehouse was completed quickly and on time. As a result, the warehouse can rightfully be called the most technologically advanced warehouse in Armenia today.

About SOLVO

Founded in 1995, SOLVO Ltd. is the leading Russian provider of high-end real-time logistics automation and control systems for business and technology processes at warehouses and container terminals. SOLVO provides its customers with services required to keep business and technology processes efficient and cost effective.

About SSI Schaefer PEEM

SSI Schaefer Peem is one of the world's leading specialists for economic, total solutions for warehousing, materials handling, and order-picking technology. The company's main focus lies in the production of conveying systems and automatic picking systems including applicable software. In September 2001, the company was integrated into the international SSI Schaefer group.

About Lubandy Logistic Services

Lubandy Logistic Services is a consulting company founded in 2008 in Austria. It provides services to establish optimal conditions for the logistics planning process. For example, they help customers select the optimal size of buildings and infrastructure solutions with a balance of cost and effectiveness, to choose suppliers of equipment and automation systems, implement system integration and launch projects, etc.