Leading supply chain solutions provider, Manhattan Associates , has released that Alliance Boots plc, a leading international pharmacy-led health and beauty group formed following the recent merger between Alliance UniChem Plc and Boots Group Plc, has implemented the Demand Forecasting and Replenishment components of Manhattan Associates’ Integrated Planning Solutions and achieved a remarkable return on investment (ROI) from the project. The near-complete rollout of the solutions forms the technological cornerstone of a pan-European project to streamline the supply chain processes of Alliance Boots’ wholesale division.
Two years ago, Alliance Boots’ wholesale division decided to re-design its European logistics function, with the replacement of the division’s proprietary replenishment system representing a central aspect of the project. The choice of solution was crucial as it had to be deployed in most of the European countries encompassed by Alliance Boots and integrate rapidly to all the company’s suppliers. The Alliance Boots wholesale network, including associates, operates in 14 countries with more than 380 warehouses serving over 125,000 pharmacies, hospitals and health centres.
Following Alliance Boots’ decision to choose Manhattan Associates in September 2004, the European deployment of the solutions was planned meticulously by a core team of local project managers from across Europe operating under the leadership of Derek Terrell, wholesale project manager at Alliance Boots.
The UK deployment, the first phase of the European wholesale project, started in January 2005. The solutions went live within six months across an initial group of 20 suppliers. The full integration of Alliance Boots’ supplier base, close to 1,000 suppliers, took a further three months. All the forecasting and replenishment requirements of Alliance Boots UK’s wholesale division were ready to be served by Manhattan Associates’ Integrated Planning Solutions in time for the busy Christmas period.
The deployments in France, Italy, Spain, Turkey, the Netherlands and Norway are also well underway and are expected to be fully completed and integrated with the supplier bases in those countries in the next few months. A further project, in the Czech Republic, is also being planned.
Manhattan Associates’ Demand Forecasting and Replenishment solutions have been live in the UK for over a year and are enabling Alliance Boots’ 15-strong UK planning team to make highly accurate forecasts for each of the company’s 384,000 SKUs and 70,000 product lines.
Manhattan Associates’ Demand Forecasting and Replenishment solutions combine to find the right balance of inventory that will be required to meet a desired service level, so users can understand what, how much, when and how to order. They reduce inventory and maximise customer service levels by optimising distribution of safety stock, reducing unnecessary out-of-stock situations and helping maximise profits by allowing users to take advantage of deal buying opportunities. Finally, their advanced reporting functionality allows users to filter large amounts of data and generate reports, whether on forecast accuracy, out-of-stocks, overstocks, service levels or supplier performance.
In the post go-live period in the UK, Alliance Boots saw immediate, marked improvements in service levels, which exceeded anything the company had been able to achieve previously. Quicker and more accurate forecasts had a positive impact on the replenishment process with stock-outs being reduced considerably. With much clearer visibility into available purchasing deals, Alliance Boots has significantly improved its investment buying approach. Alliance Boots also reported it had reduced the number of days’ inventory it holds in the UK from 14 to 13, a statistic, which represents a substantial fall in its UK stockholding requirements. This represented a saving of around £20 million, compared to a pre-implementation projected savings level of approximately £10 million for the first full year of system operation in the UK.
According to Alliance Boots, the impressive results it have seen in the UK have made it extremely confident about the current phase of the European deployment of Manhattan Associates’ Integrated Planning Solutions. Manhattan Associates’ Demand Forecasting and Replenishment solutions have not only allowed Alliance Boots to take around £20 million worth of inventory out of its supply chain, they are enabling it to much better understand the value of its stock-holding position at any given moment in time. Furthermore, the replenishment process improvements Alliance Boots has seen is allowing it to significantly improve productivity. Alliance Boots has no doubt that Manhattan Associates will help Alliance Boots strongly improve its replenishment processes and inventory positions across its entire European wholesale operation.
According to Manhattan Associates, successfully steering complex IT projects on this scale and tackling the challenges that they inherently present is no mean feat. Alliance Boots’ project team’s high energy levels and unwavering commitment to the objectives of their supply chain re-engineering exercise have resulted in the establishment of an advanced supply chain solution infrastructure to support their transformation strategy as well as immediate and impressive bottom line benefits. Manhattan Associates look forward to working alongside Alliance Boots to help further their ROI from its advanced Integrated Planning Solutions.