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Pharmacity has embarked on an aggressive expansion plan to grow its presence across Vietnam with an additional 500 stores in five years. The pharmacy chain looks to fuel this growth by improving its workflow and decision-making process. Microsoft Dynamics AX provides the technology required to improve visibility and business intelligence. Managers can now make better data-driven decisions in real time, thereby delivering better value to customers and stakeholders.

Founded in 2011, Pharmacity is a fast-growing pharmacy retail chain in Vietnam with a vision to be the largest modern retail pharmacy and provide the best pharmacy retail experience in the country. With 34 stores across the country at present, Pharmacity has embarked on an aggressive expansion plan that involves launching up to 500 stores within the next five years.

“Our mission is to deliver the best customer experience at every touch point and establish a presence in every neighborhood throughout Vietnam,” says Chris Blank, Founder and CEO of Pharmacity. To support this mission, the company is actively investing in technology that will provide better control and visibility of its business processes.

Addressing industry-specific needs

As with any retail business, Pharmacity needs to track its supply, inventory and sales accurately. The pharmacy industry has additional challenges that impact customer service and product handling. For instance, medicines must be produced and delivered in batches to maintain freshness and efficacy of the medication to the consumer.

In the past, the company used a custom inventory management system to track its accounting, retail and the movement of inventory along the supply chain. However, the system required additional integration of modules to meet the growing demands of the business.  “The technology simply could not be scaled to meet our expansion plans. It required additional modifications every time we opened a new store or started selling a new product,” says Blank. “Unfortunately, as functionality was added, the software never seemed to work as it was meant to.”

These add-ons resulted in workflow difficulties that impacted productivity. “Inventory counts got out of hand, just-in-time ordering stopped working, and the whole supply chain process became very manual,” says Blank. “Poor integration – from front-end data to management reports – resulted in room for human errors and low control on accuracy.”

These workflow challenges required staff to rectify errors in the system to ensure proper accounting and reporting. “The culture of the company was impacted drastically as manual data entry and management led to overtime, stress, and overall, poor work-life balance,” says Blank.

Enhanced business intelligence supports growth trajectory

With ambitions to expand the business to 500 stores in the next five years, Pharmacity needed to examine its supply chain and workflows to ensure that its systems would be able to manage the increase in demand and fuel its expansion. The organisation needed to invest in technology that would be able to fuel its growth strategy and build better value for customers and stakeholders. Pharmacity’s board of directors decided that the company needed an end-to-end solution that could better capture the unique needs of the pharmacy retail business, especially with their growth plans.

Microsoft Dynamics AX for Retail was identified for its ability to manage the demands of the business from end-to-end, and Votiva Vietnam came on board as the implementation partner. After customizing Microsoft Dynamics AX for Retail within a six-month period, Votiva migrated Pharmacity’s system simultaneously across 22 branches (all existing stores at time of launch) and at least 85 devices and POS machines, with virtually no downtime.

Dynamics AX for Retail encompasses a comprehensive end-to-end ERP, with financial management, supply chain management, warehouse management, retail and customer relationship management (CRM) modules. The solution also supports Pharmacity’s loyalty card, which keeps track of customer purchases and provides discounts and promotions. With these improvements, Pharmacity is better equipped to gather data, manage its supply chain and provide better services to customers.

Business intelligence leads to better customer and stakeholder value

With improved business intelligence capabilities, Pharmacity has better access to information that supports its growth strategy. These insights enable the company to interact with customers better, providing the right goods and supply to the right stores. These enhanced capabilities also enable finance and accounting managers to provide the board of directors with the right information in making critical business decisions.

Visibility and business intelligence

The ability to keep track of stock movement across branches enables Pharmacity to better determine demand in real-time. With this information, management can keep track of product performance and adjust deliveries according to where they are needed the most. “Our accounting team has easy access to information because data is centralized and recorded properly,” says Blank. “Our CFO can now prepare accurate on-time monthly reports for our board and stakeholders – a task that would have required several days of overtime for the finance team to accomplish in the past.”

Improved point-of-sale experience

Dynamics AX for Retail amplifies Pharmacity’s point-of-sale experience by enabling the company to track popular products and tailor-fit promotions accordingly. For instance, affinity analysis through Power BI tracks popular product combinations and enables the company to create packages that provide better value to customers, and enhances productivity.

Better stock and inventory management

Dynamics AX is a flexible platform that enables Pharmacity to customize for the business’ special needs, such as enhanced capabilities to track medicine stocks and labels, as well as controlling batches in view of expiry dates. This ensures that deliveries are sent to the right branches, resulting in consistency of product and stock lifecycles.

Improved workflow and employee productivity

The technology allows Pharmacity’s front-line retail team to focus on higher-value tasks rather than focusing their efforts on troubleshooting the system.  In addition, Votiva provided advice on best practices and internal procedures that improved process and workflow efficiency. “This led to a happier workforce dedicated to the growth and prosperity in our company,” says Blank.

According to Blank, with these new capabilities, the company could have reduced headcount by 10 to 30 percent, given the efficiency gains. “However, the company is rapidly expanding and we operate like a close-knit family, so we have chosen to refocus our staff on work that adds more value to the business, instead of making them redundant.”

Enhanced customer value

Pharmacity’s solution also improves on the functionality of its loyalty program through mobile integration. Currently, customers can check their transaction history and loyalty points through a mobile application. The company plans to add e-commerce features in the future, which will enable customers to order medicines straight from their smartphones.

A clearer path to growth

Dynamics AX for Retail provides the tools that Pharmacity needs to accelerate its expansion efforts and meet customers’ needs. Through enhanced business intelligence capabilities, the company is equipped to make data-driven decisions that will support its growth strategy. “Investor confidence improved with our increased focus on growth and professionalism,” says Blank. “We now have better access to investment capital and a better shareholder base, which will be very important in executing our expansion strategy.”

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