e-Pharm-Up improves supply chain between pharmaceutical distributors and pharmacies

Milan 26 April 2004A Customer Relationship Management (CRM) platform, recently tested in Eastern Europe, heralds a brighter future for distributors that risk being cut out of the manufacturer-customer equation unless they become more efficient and add value for customers.


Central and Eastern European Countries (CEECs) are expected to see significant growth in the pharmaceutical sector. This trend is driven by an ageing population, increasing economic growth and per capita income, greater state investment in health, and increasing sales of international products. In 2002 the CEECs were one of the world's most dynamic areas for pharmaceuticals, enjoying sales total sales of some 12 billion euro and growth of 8 percent, according to figures from the IMS Health Institute.

The co-ordinator of e-PHARM-UP, Matteo Colombo, from the Italian consultancy firm Sineura, explained the focus of the IST programme-funded project he led: "Our CRM solution improved the supply chain between pharmaceutical distributors and pharmacies. Though we concentrated on Romania, we demonstrated our results - more efficient sales and happier customers - could also be applied to other CEECs."

In Western Europe, distributors are often closely tied to large pharmaceutical producers. In the CEECs, pharmaceutical distributors tend to be small and medium-sized independent companies. Without a helping hand for their commercial and logistic operations, many risk being taken over by their more powerful Western counterparts. If they are to succeed, they must shift from their core competence of managing inventory to managing information, providing a range of value-added services to the pharmacists.

The software package created under the project could be the answer for independent distributors. Based on an existing e-commerce solution, it offers several channels based on Web and wireless technologies. Each can directly connect the supplier and the customer. The portal module links all the other modules. It provides the content manager and display functions, allowing users to read articles and news on pharmaceutical products.

Other modules enable sales force automation, self-provisioning, data exchange, business consulting, and training. The sales force automation feature, for instance, allows a sales representative to give or obtain information while moving from pharmacy to pharmacy. By entering data into a personal digital assistant (PDA), the representative can check the credit line of a business and quickly provide invoices for products ordered.

"Distributors benefit from the CRM services by making better use of their call centres", stated Matteo Colombo. "Thanks to time savings of around 55 percent on phone calls, they can now also propose value-added products rather than just receive orders. They can also develop their business and increase sales, since the new multi-channel interaction with customers will create more loyalty and retention." The pharmacy customers, he added, receive information in real-time and ordered products up to a third faster than before.

The biggest challenge, according to Matteo Colombo, was adapting the package to handle Enterprise Resource Planning (ERP). The partners solved this by creating a gateway based on XML and the Java programming language. Currently available in the English and Romanian languages, the project's pharmaceutical CRM package could be used in other sectors. Partners in the project included two IT service providers, a research centre, two pharmaceutical distributors based in Romania and a network of 75 pharmacies in the same country.

More information on the project is available at the e-Pharm-Up Web site. This article was reprinted from the IST results Web site of the European Communion.

Leslie Versweyveld

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