Strategic Supply Chain Management OSC300
University of Phoenix
Technology in Supply Chain Management at CVS
With more than 40 years of dynamic growth in the retail pharmacy industry, CVS (NYSE:CVS), a $22 billion company, is the nations largest pharmacy retailer with over 6,200 stores in 38 states. CVS/pharmacy fills one of every eight retail prescriptions in America. Furthermore, their ExtraCare program boasts over 50 million cardholders, making it the largest and most successful retail loyalty program in the country. Both through acquisitions of other chains, and internal development, CVS has exploded in store count to become the nation's largest drug chain, supported by nine distribution centers in the eastern, north central and southern U.S. regions.
Year-to-date, CVS total sales for the thirty-nine week period ended October 1, 2005, were $27.3 billion, compared to $21.7 billion in 2004. Same store sales for the thirty-nine week period increased 6.5% over the prior year period. Pharmacy same store sales increased 7.3%, while front-end same store sales increased 4.6%. (CVS/pharmacy, 2005)
With a company expanding as fast as CVS, keeping track of shipments when the company is paying the freight and directly controlling their carriers. But CVS/pharmacy had the additional complication of accepting most of its inbound deliveries on a prepaid basis. Nevertheless, the company needed to get a handle on where its shipments were and where things were most likely to go wrong.
Rapid growth in the retailer's network made it imperative that CVS achieve better supply-chain visibility. Since 1997, the company had nearly tripled in size, mostly through acquisitions. In just a few years, the number of distribution centers ballooned from three to nine. Faced with a variety of disparate information systems, CVS urgently needed a way to unify the reporting procedure in support of its 4,100 stores. "We really had no... [continues]
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