Success Case

ALLOGA-LOGIFARMA

Dedicated exclusively to pharmaceutical logistics, Alloga-Logifarma was created in 2019, resulting from the merger of two pre-wholesalers, Alloga and Logifarma, which have been operating in Portugal since 1997.

Since the first objective is to provide its customers with high quality and rigorous storage and distribution, meeting the most demanding standards of the pharmaceutical industry, Alloga-Logifarma acts as the primary distributor of companies linked to the area of medicine and healthcare.

The Company

The company is dedicated to providing logistical services to third parties, having had a marked growth in recent years. With the increase in customers, the company has been expanding the services provided while looking for solutions that would allow it to reduce costs, optimize and make it more effective.

It currently has two warehouses, one in Sintra’s area, where they store product, and three cross-docking platforms in Porto, Algarve and Castelo Branco. After receiving the products that come from the laboratories, they store, prepare and deliver them to stockists, pharmacies and hospitals.

The Challenge

Daily, Alloga-Logifarma receives dozens of supplies from production units around the world, mostly in Europe. Together with the products, packing lists are sent, which contain the details of the same. In 2020, they represented 150 laboratories, which is equivalent to 500 thousand orders prepared and 100 million units shipped in the national market.

The company is positioned between the laboratory and the stockist, which, according to the company, creates pressure from both sides and creates some challenges when trying to streamline or systematize processes, because most of the laboratories’ IT services are not based in Portugal.

In addition, the process of receiving and entering information into systems becomes time-consuming and prone to error, when entered manually. As João Gomes, Operations Director, says, each day we receive about 50 trucks representing 640 pallets, “we are talking about packing lists with dozens of pages and hundreds of lines that have to be validated and introduced manually, which requires available resources and time for analysis ”.

Artificial Intelligence and Process Automation

Thus, there is a need for the development of an Artificial Intelligence (AI) solution, which automatically detects the information coming from the packing lists and registers this information into the system.

“Given the dispersion of customers, we have more than 150 laboratories, which can have several suppliers each, and the geographical dispersion of where these products and information come from, makes it complex to set up a global system that captures all the necessary information. Then we started an AI solution that starts when the products arrive at our warehouse ”, explains João Gomes.

If initially there was some reluctance to the change from the employees, all stakeholders quickly recognized the benefits that the solution brought to the packing list interpretation process, such as better organization of the activity, increased productivity, better customer service and cost reduction.

The main objective is the automatic insertion of information that arrived on paper and was later entered manually. Although the Alloga-Logifarma warehouse has had a warehouse management system for many years, the data was entered manually through a radio frequency gun that was connected to the warehouse management system.

Until then, operators read the product barcode and manually entered the batch, quantity, expiration date and some parameters, such as the number of units per box. Today, if you have the packing list that comes with the goods, this data is automatically entered, after which there is a process for printing labels.

Thus, to this day, data is captured by digitization and directly entered into the warehouse management system, which made it possible to normalize the information and have it easily accessible.

Greater efficiency, more agility and greater competitive advantages

BI4ALL has developed an AI solution that interprets all documentation and communicates directly with the warehouse management system. With the information consolidated on a platform, the process became easier, semi-automatic and less prone to error.

Today there is a better organization of the activity, the employees are allocated to less repetitive work and the company has gained greater competitive advantages in relation to the competition.

More and more, our customers demand a reduction in lead times. As such, to achieve the goal of reducing the time between goods arriving at our warehouse and being available to go to the market, we designed processes that allowed us to reduce this reception lead time ”, says João Gomes.

With more agile and efficient processes, Alloga-Logifarma was able to reduce the time of making the product available to the market and to the customers, which increased their level of satisfaction because they were able to put the products on sale more quickly. The official says that “the main benefits were the reduction in the delivery lead time, the increase in productivity, the reduction of errors and the anticipation of information. There was also a parallel project for scheduling goods, with the objective of knowing what we will receive the next day and being able to identify the products that are missing from the warehouse management system ”, he details.

In addition to the reduction in delivery lead times and the reduction of errors, there are still advantages for the business, and the customers themselves are satisfied when working with a technologically advanced partner.

The Future

Alloga-Logifarma wants to continue to evolve and be at the forefront of technology, foremost because it recognizes that this is a competitive advantage over competitors. As for the future, João Gomes explains that this project was started in the area of goods receipt and, at this moment, an AI solution for the warehouse is already being developed. The objective is “to have an AI solution to do the storage of products inside the warehouse and that solution to organize order preparation. In 2021, we will have this project completed ”.

In the case of a storage solution, the objective is, according to the load that exists, a specific solution to define what to store and in which area, taking into account assumptions, such as product rotation or the weight of the goods. In a warehouse of 18 thousand square meters, having an operator making non-productive movements means many kilometers traveled at the end of the day, which in addition to the time spent represents an added cost.

The organization also has an area of dermo-cosmetics, which has many more references and a wide variety of seasonal products, as well as campaigns and products with different images, which brought a huge variability of processes. “We feel this difficulty more and more because we went from 2 thousand to 15 thousand references to manage in the warehouse. What forces us to have a solution that helps us to handle a lot of data and with a lot of variabilities”, says the Director of Operations. Therefore, the expectation is that it will free the people who make intermediate management of the data analysis, and that it will become the AI solution the one who will organize the work both in the preparation of products and in the ordering.

Logistics is a sector that works with tight margins, so time is a determining factor for improving customer service.

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