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By Andrew K. Reese

It's an axiom as old as supply chain technology: IT projects should begin with requirements definition to ensure that outcomes meet expectations. In an ideal world, a cross-functional team, including business and IT representatives from different silos within the company, comes together to assess current and hoped-for business capabilities, and then to figure out the scope of the technology necessary to enable those future-state capabilities. Only then does the team develop the request for proposals and reach out to the supplier community.

But as the fast-growing fourth-party logistics provider (4PL) Priority Solutions International found out recently, sometimes it's best to bring the technology vendor into the process sooner rather than later to ensure a faster, smoother rollout of a new technology solution — and a quicker return on investment.

Finding a Solution Provider

Headquartered in Swedesboro, N.J., Priority Solutions is a lead logistics provider (LLP) specializing in the healthcare/pharmaceutical industry and operating a non-asset-based logistics network that extends to more than 500 cities worldwide. Among other activities, Priority Solutions works with a number of pharmaceutical organizations to distribute samples to drug reps around the country. The pharma firms would drop off a shipment of inventory, which Priority Solutions would send to its agents, and those agents would actually perform the delivery to the end rep.

Back in 2003, one of Priority Solution's major clients, a leading pharmaceutical company, asked the 4PL to expand its services to include fulfillment. The pharmaceutical company already had a long-term relationship with Priority Solutions and respected the company's service levels, so it was a natural extension of the relationship for the 4PL to take over the warehouse function and become a fulfillment center for the drug samples. Time was of the essence, as the client was looking for a rapid startup for the project, and Priority Solutions was fortunate enough to be able to acquire a 125,000-square-foot warehouse facility in Memphis, Tenn., recently vacated by another pharmaceutical company.

Problem was, Priority Solutions' supply chain systems at the time were not set up for the fulfillment function, according to Gary Brown, vice president of technology with Priority Solutions. "Our systems were focused around delivering product but not warehousing them," Brown explains, "and so we had to go into the marketplace looking for a warehouse management system." Given the time constraints on the project, the company turned to its database and development environment provider, Progress Software, to recommend a warehouse management system (WMS) provider that would be a good fit for Priority Solution's existing technology. The suggestion came back to look at Downers Grove, Ill.-based Integrated Warehouse Solutions (IWS), which offers IRMS, a WMS based on Progress' OpenEdge business application platform.

Meeting Unique Challenges

Pharmaceutical products present a couple of unique challenges for warehouse management systems. First, while any individual drug may itself comprise a number of stock keeping units (SKUs), each SKU is accompanied by a physician or patient instruction (PI) — the paperwork that must be packaged with the drug with instructions, warnings and various other notices. The PI is linked to the individual SKU, but it also has its own lot control number and expiration date. For Priority Solutions' warehouse operation, the pharmaceutical company wanted to be able to order by the drug's SKU and then have the 4PL include the PI sheet associated with that SKU in a controlled fashion, with a record of the lot control number and expiration date linked to the SKU. "We didn't see that capability within the out-of-the-box WMS from IWS, and I'm not sure we would have found it anywhere in the marketplace, to be quite honest with you, had we done an exhaustive search," Brown says. As a result, Priority Solutions was looking at changes to the receiving, ordering and inventory adjustment processes within the warehouse management system.

In addition, the pharmaceutical business naturally entails a significant degree of government regulation, including a certification process called validation that requires facilities handling drugs to be checked top to bottom, including people, processes and equipment, down to the hardware and software running the operation. Software must comply with regulations designed by the U.S. Food and Drug Administration to ensure that pharma and life sciences companies meet chain-of-custody and electronic records requirements that are as stringent as ink- and paper-based processes. For a WMS, that might mean ensuring a granular level of transactional and environmental visibility that provides an audit trail for each unit of a given drug.