Federació Farmacèutica (FedeFarma)

Gains 10 to 15 percent lift in sales and reduces hardware expenditures by 30 percent

Published on 31 May 2013

"We’ve really made an important advance in generating loyalty among the pharmacies doing business with us. We’re in an extremely competitive industry. With the Informix and Deister solution, we’re gaining business instead of losing it." - Santi Pla, IT Director, FedeFarma

Customer:
Federació Farmacèutica (FedeFarma)

Industry:
Life Sciences, Wholesale Distribution & Services

Deployment country:
Spain

Solution:
IGF, Database Management, Data Warehouse, Enterprise Resource Planning, Information Infrastructure, Information Integration

IBM Business partner:
Deister S.A.

Overview

Fedefarma maintains seven warehouses, and each warehouse had its own IT systems and its own data. The only way to replicate ERP data with the warehouses was to send flat files, an inefficient method which frequently failed during periods of high volume. When transmission stopped, order fulfillment stopped. The company lost sales and customers. Thanks to a solution from IBM® Informix® and IBM Business Partner Deister, it is now gaining customers and growing to filling 400,000 orders per day.

Business need:
FedeFarma’s outdated enterprise resource planning (ERP) system couldn’t replicate data to company warehouses fast enough to promptly fulfill pharmacy orders. Frequent crashes caused lost sales and customer defections.

Solution:
IBM Business Partner Deister helped FedeFarma deploy a new ERP solution on IBM Informix database that provided the warehouses with real-time information to quickly fulfill orders and more easily track information.

Benefits:
30 percent fewer staff needed to manage the database, saving USD180,000 in salaries; 10-15 percent lift in sales; 20 percent fewer errors, driving a 20 percent increase in productivity

Case Study

Link to Spanish version

Pharmacies cannot possibly stock the tens of thousands of medicines they need, so they depend upon wholesale channels to deliver their products in a timely fashion. In Spain, a number of cooperatives have formed purchasing groups to obtain better terms from manufacturers. Federació Farmacèutica, or FedeFarma, is one such purchasing group. Based in Barcelona, it delivers to—and is owned by—approximately 3,000 pharmacies and has about 400 employees. The company’s annual revenue is approximately EUR800 million.

FedeFarma’s goal is to respond to the hundreds of thousands of queries and orders it receives daily and to deliver the product to the pharmacies within two hours of the order. However, FedeFarma’s antiquated enterprise resource planning (ERP) system struggled to keep up with demand, which had grown to 300,000 orders for individual stock-keeping units (SKUs) per day.

Replication challenges cause lost sales and customer defections
FedeFarma maintains seven warehouses, and each warehouse had its own IT systems and data. With the 20-year-old legacy system, the only way to replicate ERP data with the warehouses was to send flat files, an inefficient method which frequently failed during periods of high volume. When transmission stopped, order fulfillment stopped.

Since there was no web-based ordering system, pharmacies had to phone or use modems to place or inquire about orders. It was a recipe for disaster, with bottlenecks at the back-end and frustrated customers at the front-end. FedeFarma lost business, and some customers went to competitors.

FedeFarma sought a new ERP system and database platform to address these business challenges. Acting on a reference from a colleague, the company contacted IBM Business Partner Deister S.A., a provider of innovative and technologically advanced web-based ERP solutions. Also based in Barcelona, Deister has worked with IBM Informix database for almost two decades and strongly recommends Informix as the database platform for its ERP system.

Easy-to-manage database solution
FedeFarma also evaluated another vendor’s ERP solution with Oracle Database, but chose Deister Axional ERP for Business with Informix database. “Informix seemed much easier to learn and manage compared to Oracle,” says Santi Pla, IT director, FedeFarma. “We did not want to be forced to expand our IT staff.”

The company purchased IBM Informix 10 database with Deister Axional ERP along with the Deister Axional WebStudio, a product for developing applications in a web environment. FedeFarma has since upgraded to Informix 11.5. The company also purchased IBM Informix Enterprise Gateway Manager, which enables Informix databases to interact with non-Informix databases, so that FedeFarma’s pharmacies can perform transactions with the wholesaler over the Internet.

There are instances of Informix for each of 13 remote databases, including the seven warehouses. The other six databases are at order processing centers. They process orders in a distributed method and report stock status to customers in less than three seconds. Then, orders are sent to the centralized database. The central database runs on IBM AIX® 6, and the remote databases run on Debian GNU/Linux. All the databases run on IBM Power® servers.

The central Informix database replicates data to the 13 remote databases using the High Availability Data Replication (HDR) features of Informix. Each remote database is an identical copy of the central database, set up through the HDR feature. This greatly improves database service availability; if one database fails, the other in the pair can take its place.High availability of the system is vital as failures during critical hours can result in significant monetary loses. As a result, all local and remote databases use the High Availability Data Replication (HDR) feature of Informix, which allows companies to have an entire online copy of each database system. This greatly improves database service availability; if one database fails, the other in the pair can take its place.

The Enterprise Replication (ER) feature of Informix ties the system together by synchronizing stock with remote systems, picking orders with warehouse databases, and managing master data with all systems.

Generating customer loyalty and lifting sales
Now all the warehouses have real-time information on the orders they need to fulfill, and the company has up-to-the- minute information on transactions that have taken place. Customers also can access and query their order and account information over the web. “We’ve made an important advance in generating loyalty among the pharmacies doing business with us,” says Pla. “We’re in an extremely competitive industry. With the Informix and Deister solution, we’re gaining business instead of losing it.”

The new ERP system was complete before the financial crisis and recession hit Spain in 2008. In the year leading up to the crisis, FedeFarma rolled out its ERP solution and business responded dramatically. “We saw sales go up between 10 and 15 percent with the IBM and Deister solution, which was a clear indication that we had put the right technology in place,” says Pla. Unfortunately, when the crisis hit, business suffered as well.

Thirty percent savings in hardware expenditures
Other benefits, however, are evident. “With the Informix solution, we require 30 percent less hardware than we did previously,” says Pla. “Our data center footprint has shrunk by 30 percent, and we are saving 30 percent in hardware costs, which includes power and administration. We’ve also been able to do without 30 percent of our IT administrative staff for a savings of USD180,000. These operational savings have helped us weather the economic downturn.”

The system supports a growing volume of queries and orders. “We can handle 400,000 orders per day, which represents growth of 100,000 orders per day,” says Pla.

The new system eliminates manual write-overs when crashes occur and reduces the number of faxes, phone calls and emails. Accuracy has improved as a result. “We have 20 percent fewer errors with the wholly automated system from IBM and Deister,” says Pla. “That means we’re getting 20 percent higher productivity.”

FedeFarma financed the project through IBM Global Financing, which provided reasonable terms and helpful reports that put licensing information in one easy-to-review format. This is another benefit that has helped FedeFarma weather financial storms. “IBM Global Financing provided long-term financing for the project, which has made a big difference to us over the past few difficult years,” says Pla.

Solution components
Hardware

  • IBM Power® servers
Software
  • IBM Informix® 11.5
  • IBM Informix Enterprise Gateway Manager
Services
  • IBM Global Financing
IBM Business Partner
  • Deister S.A.

For more information
To learn more about IBM Informix database software, please contact your IBM sales representative or IBM Business Partner, or visit the following website: ibm.com/software/data/informix

Additionally, financing solutions from IBM Global Financing can enable effective cash management, protection from technology obsolescence, improved total cost of ownership and return on investment. Also, our Global Asset Recovery Services help address environmental concerns with new, more energy-efficient solutions. For more information on IBM Global Financing, visit: ibm.com/financing

For more information on Deister, visit: www.deister.es

For more information on FedeFarma, visit: www.FedeFarma.com

Components

IBM products and services that were used in this case study.

Hardware:
Power Systems

Software:
Informix Enterprise Gateway Manager, Informix Dynamic Server

Legal Information

© Copyright IBM Corporation 2011 IBM Corporation Software Group Route 100 Somers, New York 10589 Produced in the United States of America December 2011 IBM, the IBM logo, ibm.com, Informix, and Power are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Linux is a registered trademark of Linus Torvalds in the United States, other countries, or both. Other product, company or service names may be trademarks or service marks of others. References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates.