Fagron reduces inventory value and increases availability

With five brands and one factory in Brazil, Fagron distributes drugs to pharmacies across the country. At the request of the Dutch holding company, the subsidiary deployed Slimstock’s advanced planning software, Slim4. As a result, the business increased its stock availability to 94%; setting a global standard for efficiency.

In a highly competitive market dependent on imported raw materials, planning the demand for the supply of medicines for five sales companies and consolidating orders at the factory was proving a challenge for Fagron Brazil. “Our subsidiaries compete with each other and end up ordering the same products. Given that the average time between analysis, import, production and distribution of the raw materials takes around 120 days, we need to combine all the requests so that they can be delivered on time,” says Rita Mendonça, Systems Coordinator at Fagron Brazil.

Planning Optimization

Before Slim4, the subsidiary relied on spreadsheets to complete the demand planning. “We had many product faults, many products excess stock and others with stock out. Slim4 helped our planning team to organise and optimise the process,” says Rita.

The implantation in Brazil followed the initiative of the Dutch headquarters, which had already implemented the solution. As the first business Unit to implement Slim4 in Brazil, Via Farma increased availability by 3% at its São Paulo branch. This improvement encouraged the other units to use the solution and then it was the turn of the plant.

Reference for other countries

After utilising Slim4 for two years, the results of Fagron Brazil stand out. ¨ Since the implementing Slim4, all our units have attained their annual inventory goal,” emphasizes Daniel Castanho, Purchasing Coordinator of the company. He points out that another key competitive differentiator in the market is improved availability.

“At the beginning of the project, our availability was at 79%. By 2018, we reached 94%, a historic achievement for our business.” The Brazilian subsidiary now sets the global benchmark for the Fagron Group.

Rita explains: “The other branches of the group did not use the tool as much as we did. Now there is a worldwide push for all subsidiaries to take advantage of the software’s function as a result of the result we attained here.”

More accurate information

Slim4 provides greater insight and therefore enables more effective communication gains among the branches in Brazil. “Before Slim4, the companies worked alone, now they act as a team,” states Rita.

To achieve this, a special planning group was created. ¨Every month we review the inventories together to check our inventory position and understand where we need to rebalance our stock. All this started as a result of the process review meetings we completed as part of the Slim4 implementation. We now have access to better information and we can produce forecasts that are more concise and consistent with our reality. As a result, we have reduced inventories and increased availability.”

Attaining greater visibility across the business and detecting trends and variations in irregular items were also benefits of the software implementation. “We are in a very volatile market. The demand planning optimisation provided by Slim4 helped us a lot because now we can see very clearly the exceptions, variations and apply the corrections, so we do not have problems of stock out of products in the future¨.

“Slim4 is now essential for our planning,” concludes Rita Mendonça, Systems Coordinator at Fagron Brazil.